Laying Foundations in the Oil and Gas Industry for Effective Project Oversight

Oil and gas software blogAs anyone who works in the oil and gas industries knows, major capital projects in the energy sector are exceedingly complex undertakings. Developing a refinery, oil field, or gas plant usually involves dozens of parties across multiple countries.

A survey of 100 projects by Aconex found that most involve more than 500 participants from 29 organizations. On average, these users exchange more than 300,000 documents and 400,000 pieces of correspondence; all told, in excess of 1.2 million decisions must be made before each project is complete.

With numbers like that, it’s not surprising that project managers, engineers, and executives would choose to rely on an EPC’s document management and collaboration system. And while that may seem like an easier solution, as well as the most expedient, it’s a decision that project owners usually come to regret.

What usually happens is a project owner will rely on the EPC’s system to manage communications to and from the EPC. Also, they will then use a variety of technologies such as email, shared drives, FTP sites, and spreadsheets to track the flow of documents internally and for communication with other parties.

The system may work fine at first. However, over time, project owners will find themselves unable to keep pace with the exponential growth and complexity of the data being generated. This puts more pressure on project administrators and document control personnel, as they struggle to keep up with the plethora of documents and manual processes while still adhering to contractually prescribed project milestones. The result: incomplete oversight and lower quality work, as stressed out personnel become more prone to committing errors.

In addition, there will always be scope that is the owner’s responsibility, not the EPC’s. The EPC’s management and collaboration system may not contain the information an owner requires or track every process that needs to be managed. Project owners may be forced to create yet another set of manual registers and processes, adding even more complexity.

This can result in poor project governance, schedule delays, and cost overruns. These, in turn, may drive contractual disputes – a situation not uncommon in the energy industry, where the sums of money involved can be significant.

Project owners may reasonably object that they lack the expertise, time, and budget to implement and manage their own systems. That’s a valid concern; in-house systems can take six months or longer to become operational. Aside from significant investments in software development, owners must also hire IT personnel to configure, customize, and deploy servers; train personnel how to use the system; offer end-user support; and provide adequate disaster recovery methods to ensure continuous availability.

And that is why a cloud-based collaboration platform is really the ideal compromise. By configuring pre-made templates, owners can achieve total control over a project’s data, with far greater speed than a traditional in-house system and at a fraction of the cost. Server deployment and disaster recovery come as part of the package. Training and support are generally included with a cloud-based platform, ensuring high rates of adoption and compliance with business processes. Owners are able to measure and fine-tune processes across the entire project, and the existence of a single neutral source of truth allows disputes to be settled far more easily.

Oil and gas cloud-based collaboration systems are a cost effective means of quickly putting in place the processes owners need to efficiently manage their projects. But it’s important they make the decision to deploy this solution as early as possible in the project lifecycle, to lay the foundation for seamless project oversight and strong governance.

Steve Sullivan

Steve Sullivan

Vice President, Oil & Gas at Aconex
Steve Sullivan is the Vice President, Oil & Gas, for Aconex, the world's leading collaborative construction and engineering management software.
Steve Sullivan