Last week in Calgary, a packed room full of OpenInvoice oil and gas operators and oilfield service providers gathered for a meeting to get an update on OpenInvoice Field Ticket, Oildex’s innovative software that eliminates paper field tickets and automates the field ticket process. Featured speakers included Arthur Trim, Systems, Reporting Analyst at Encana, and Brad Smith, CFO of Rapid Rod Service.
The event began with Oildex’s Shane Knutsvig welcoming the audience and providing an update on Field Ticket adoption and volumes on the Oildex Network. Shane pointed out that 22 OpenInvoice buyers have now committed to Field Ticket, meaning Field Ticket adoption is already nearing 10% of the OpenInvoice installed base less than 18 months after Oildex launched the product in mid-2016.
Arthur and Brad then gave opening remarks about their organizations’ experience with Field Ticket from the operator/buyer and service provider/supplier perspectives. Arthur related that Encana was a user of the first-generation OpenInvoice solution for field tickets, a product called OpenInvoice Receipt (OIR). While they had moderate success with OIR, they began pilot testing with Field Ticket earlier this year and quickly realized OpenInvoice Field Ticket represented a significant improvement. Furthermore, they also realized Field Ticket was a good fit for the problems they were attempting to address.
Brad then described how Rapid Rod’s biggest problem was the process going from field ticket to invoice. Previously, they used a paper system. They relied on their rig crews to obtain final signatures and coding on their tickets. They used these tickets for both charges for their services as well as payroll. On average, it was taking 25-30 days to invoice a field ticket. Then it would take another 30 days to get paid, meaning they had added another 30 days to their A/R cycle. Given oil companies do not pay without invoices, and credit terms have been pushed out by conservative bankers in today’s oil industry, cash flow for service companies is critical.
For Rapid Rod, the Field Ticket rollout was very simple. The company was already using a product called Phoenix DAS, a suite of oilfield services software. Phoenix DAS was an early Oildex partner for Field Ticket and was acquired by Oildex earlier this year. Since rolling out the Phoenix OpenTicket module, which submits field tickets to OpenInvoice, Rapid Rod has been able to reduce the time from ticket to invoice to 3-5 days, cutting 3-4 weeks off their A/R timeline.
Brad also pointed out that in addition to getting paid much faster, another significant advantage of electronic field tickets to suppliers is visibility. Given the entire process is now automated, Rapid Rod employees can now view the status of all field tickets at any point in time. As a result, Rapid Rod can always see the process and verify each ticket got to the right approver so they will get paid.
So why is Encana implementing electronic field tickets? Arthur said the company was looking to improve timeliness in getting field tickets approved. On locations where the field approver was not on site, suppliers were having a particularly difficult time getting their tickets signed. Once they returned to the location, each supplier had a folder in a file cabinet by the door of the field office with their approved tickets. “This is 2017. We can’t be doing that anymore”, said Arthur.
Arthur then described how Encana has been rolling out Field Tickets. They ran a series pilots in Canada and the US that focused on both completions and operations. They offered the pilot broadly and quickly found some parts of the organization were more open to trying a new solution than others. Perhaps not a surprise, some of their early adopters were groups with some of the slowest invoicing. One of those groups had a supplier that went from being six months behind on payables to submitting invoices within a week using Field Ticket and OpenInvoice.
Running the pilots and getting everyone comfortable with the new process took about three months. In their organization, they had particular early success with workovers in the Permian Basin. The first production groups have now been live for about eight months and continue to onboard additional suppliers. As word of the success of the Field Ticket has spread throughout Encana, Field Ticket is now gaining traction throughout the company. Arthur expects a full company-wide rollout will take an operator 18 months to 2 years, depending on how many groups and suppliers they have.
Following Arthur and Brad’s opening remarks, vigorous questioning from the audience ensued. Several questions focused on supplier adoption. Arthur said Encana initially identified suppliers that would be a good fit – those with lots of invoices and tickets that were working with the teams that were involved with the Field Ticket pilot. They would first introduce suppliers to OpenInvoice if they were not already using it, then introduce the Phoenix software.
Overall, Encana has had a very positive response from suppliers about Field Ticket. Suppliers have found the software simple to use. It makes many tasks easier and eliminates task suppliers do not want to do. In particular, those with previous experience with OIR pointed out the new product is much more modern, faster and easier to use. He also said that while up till now Encana has been driving their own supplier onboarding, they are considering taking more advantage of Oildex’s supplier onboarding capabilities to gain additional scale.
Brad said the best way to motivate a supplier is to tell them, “if you adopt electronic field tickets, you will get paid faster.” He also pointed out one of the keys to success is the Phoenix DAS software, which Oildex is in the process of renaming Oildex Oilfield Services Suite (OSS). The software was written initially by oilfield services people, for oilfield services people. He said it was easy to use, as Phoenix designed it for a grade 9 education level, and even older employees still wanting to use their flip phones quickly became comfortable using the software. Even better, the base OSS Web Portal module for submitting electronic field tickets is available to all suppliers for free, just like the ability for them to submit invoices using OpenInvoice.
OSS Web Portal is highly configurable, meaning suppliers can set it up to support their existing business processes. Arthur pointed out some of their suppliers still create a paper ticket in the field, then create electronic tickets back at the office. OSS Web Portal supports tickets processes that are split across field and headquarters locations.
Brad commented on the capability for suppliers to group all their tickets into different categories based on status. The supplier can set up their buckets how they want, based on their business processes. Tickets do not automatically go to Oildex. They do not get submitted until the status reaches a certain level, which means the software is well-suited for complex operations like fracking where tickets much undergo multiple levels of review before being submitted. As Brad said, “It is much harder to adjust a field ticket after you have submitted it to an oil company.” OSS Web Portal makes the submission process easy to control”.
Both Arthur and Brad commented on their positive experiences as early customers working with the Oildex and Phoenix DAS teams on their electronic field ticket rollouts. “Oildex has been extremely responsive,” said Arthur. “80% of the product issues we identified have already been addressed in only six months”.
One other area of questions for Arthur revolved around the use of Field Ticket APIs. Arthur said one of the most significant advantages of Field Ticket is Encana now has data they can now integrate and analyze, not just paper tickets. They are using the Field Ticket APIs to pilot integration with their well lifecycle software. They can easily see costs broken down by AFE or cost center. Long term, they want to build an integration that automates what is currently manual cost tracking. “Our field teams are happy with electronic approval process now,” said Arthur. “Integration with our daily operations cost reporting system will be the icing on the cake.”