How to Improve Back-Office Efficiency to Increase Profitability: Part Two
This is article two in the blog series, How to Improve Back-Office Efficiency to Increase Profitability.
You can view article one here.
[Susie} Dave, since data analysis can reveal opportunities for cost savings or improvements in efficiency, let’s talk about the importance of reporting and metrics. Can you talk about the insights available to operations and accounting teams when they move from paper invoices and field tickets to a fully digitalized AP process?
[Dave] One interesting thing about the digitalization of these workflow processes is that now you get access to a lot more information than you had before. When we first built OpenTicket, we assumed there were specific templated reports that would work for all operators.
But as we introduced this to our customer base, they said they wanted more flexibility and capabilities because we don’t necessarily want the reports in the format you provided. So, we created very flexible reporting capabilities – that’s what you see with OpenInvoice and OpenTicket today. If you’re not getting the right resolution of information through Excel, which is one of the one of the formats that we support, you can use Spotfire or another more rigorous analysis tool and undertake whatever type of analysis that you need.
Another thing that we’ve seen is that as we’ve gone from digital invoicing to digital field ticketing, the quality and the nature of the data has changed because field tickets typically have far more detail than an invoice. Digital field tickets allow you to mine that data. You can look at maintenance jobs right down to the O-ring in your field ticket if you want. Depending on the nature of the organization, they’re leveraging this reporting capability to do different things.
For example, Concho Resources relies on its digital field ticketing data for overbilling and fraud detection. This was the impetus for Audit Intelligence, an application that we developed with Concho to analyze field spend and find obvious overbilling.
Another case was Anadarko. They were having challenges with accruals in West Texas. So, they leverage the reporting capability of OpenTicket to analyze operations cost much earlier in the overall cycle. These timely analytics led to a reduction of their accrual errors by 80%.
So, there’s different ways of using reports to analyze different things. It’s really up to an organization to define what level that you want to undertake and what the opportunities are for you. Our Professional Service team really understands this data. They understand what the challenges are. And they can help organizations find opportunities to maximize the value of that data.
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[Susie] Michael, since you help customers understand workflows in OpenInvoice solutions, can you provide examples of reports that help companies understand efficiency in their workflows so they can improve?
[Michael] First, it’s important not to create reports or generate metrics without a goal in mind. You want to develop them according to your strategic goals and use the metrics to show how you’re performing against those goals. There are a few different ways that you can approach that and it really depends on what you want to accomplish each year. So, your metrics might change year over year.
You can use industry benchmarks to measure progress. For example, our best-in-class OpenInvoice PriceBook customers have close to 90% price book rate validation. Because accuracy and coverage of price books enable automation, you could set up a goal around the price book rollout, like metrics around coverage of how many suppliers have price books and the accuracy of the price books.
Best In Class Operator Spend Coverage Averages in PriceBook
Best In Class Operator Spend Compliance Averages in PriceBook
You can also set up goals around capturing more early pay discounts. How long does it take you to complete the invoice process? What’s your cycle time? Where are the bottlenecks? Then drive the changes necessary to get the cycle times down so you can capture those early pay discounts.
We talked a bit about earlier a person who is reviewing the field ticket and then the invoice comes in and they’re reviewing that invoice. This is where you can set goals for automation efforts or reducing the number of touches required during the invoice process. If you’ve got a complex approval chain, it’s really important to focus on one or two things at a time. Set your goals, set the metrics, and once you reach those goals, then look to see what other opportunities those unlock and then build metrics for the next round of goals.
Are you interested in finding new ways to leverage your OpenInvoice solutions, data and processes, but aren’t sure where to start? The Enverus Professional Services team can help. Schedule a complimentary business review with Enverus experts.
Jeff White, VP of Operations
Jeff joined Enverus in 2006 as a senior project manager, earning roles with increasing responsibility, culminating in his appointment to VP of Operations in 2019. He is responsible for the leadership and direction of several departments including Project Implementations, Technical Integrations, Supplier Onboarding, Client Advisory Services and Professional Services. With more than 20 years of oil and gas accounting and procurement experience, Jeff has worked in Joint Interest Billing, as a financial analyst in global supply chain management, and as a senior accountant and international liaison.
Michael Ross, Senior Manager, Training and Consultation
Michael has been in the software and technology industry for 23 years. He joined the OpenInvoice team in 2010 as a senior product manager initially focused on workflow automation. Leveraging his prior experience as an ERP implementation consultant at IBM, Michael is now the Training and Consulting team leader responsible for helping clients maximize the value of their OpenInvoice investments.
Dave Savelle, General Manager, Field Ticket Operations
Dave is a 33-year veteran of the oil and gas technology industry. He has held a number of roles in technology development and operations, including support, sales management, marketing, and development. In 2000, Dave left Halliburton and co-founded Digital Oilfield, running U.S. operations from its inception, and was on hand for the first deployments of OpenInvoice.