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BPM Real Life Solutions: How to improve AFE approval turnaround time and increase AFE accuracy and reliability

I have a number of colleagues that have gained significant experience in the Oil and Gas Sector, helping their clients to realise real value from the deployment of the XMPro Business Process Management solution.   Phil Taphouse based in our [Professional Advantage] office in Perth, Australia, is one such individual. 

I wanted to draw your attention to a recent blog post from Phil on the topic of AFE's.

It is easy to reduce AFE turnaround time. Just make ball park estimates, use some data from a previous project, some quick calls to equipment providers, some high level assumptions and bang out an AFE. Right?

Whilst the above scenario is exaggerated, there is pressure on upstream O&G Exploration and Production operators to fast-track work programs, and get approvals quickly to speed up project execution.

The implications are that the operator will give a less than favourable impression to investors and AFE participants alike if costly overruns are the consequence.

The converse of this is that the O&G operator implements compliance measures on the operations. Although the standardization creates greater accuracy and certainty, it builds pressure within the organisation. AFE approvals are slowed down, decision bottlenecks are created. The consequences are that projects can be cancelled or project costs could increase.

To understand the AFE creation process, we need to consider that the AFE is the final step of many during the estimation process.

The final, most detailed estimate is the AFE estimate. But there are other estimates made first that will inform this. At the top end, we have an Order of Magnitude estimate (50-100%) which is used for project screening. Then Equipment Factored (25-50%), used for feasibility studies, where each of the major equipment components are given numbers and factors such as $/metre drilled . An Economic estimate at around 25%, provides a level of confidence. Contractors are contacted to provide their input and greater equipment detail costing is sought. The final stage is the AFE Estimate which should be the cost control estimate used in reporting internally and to participants. An AFE estimate should be reliable, within 10%.

To get the required AFE estimate accuracy of within 10%, the operator will need a robust policy, compelling workers to follow extensive and complex processes for AFE approvals.

It is easy to see the effect this can have as many AFEs work their way through the layers of the organisation creating decision bottlenecks. Along the way, a variety of word documents, forms, quotations from suppliers and commentary are attached to the AFE before it reaches the CEO’s desk for final approval.

The conundrum then is how does an organisation get reliability and certainty in the process, following policies and procedures, yet at the same time speed up the turnaround time?

Ultimately, it is about being able to manage the process. We have to make the process effective in achieving the goals of time and accuracy and at the same time, easy and user-friendly for operations staff.

This all points to having a workflow solution. Workflow, though, is not just about providing a structured, pre-defined workflow. In a multi-disciplined team, we may need more flexibility to allow more ad hoc, unstructured processes to occur yet still maintain control. This allows for decision making within the process itself, for instance, routing to another department or supplier as project details clearer.

In the next blog, I will write about the final stage of the AFE process. This is the Review stage. How can we perform better? How can the process be more effective? How do I measure effectiveness?

What has BPM got to do with Human Physiology?

I came off the phone yesterday after having an in depth discussion with a colleague regarding BPM and our solution XMPro.  My wife asked "What is this BPM you are always on about?".  Straight to the point my wife! 

I then set about explaining... but before I got involved in trotting out jargon and industry speak it occurred to me that I had to find a way to explain this concept in terms my wife would appreciate.  My wife is a practice nurse at GP’s surgery and spends her life explaining complex medical conditions and treatments, to lay people who are not medically trained, and so without in any way being condescending want the explanations delivered in terms they can understand. 

So I set about explaining BPM in terms of human physiology...

If we assume that the human skeleton represents the core structure of the organisation, divisions, departments, teams and individuals there are four key elements which sit inside and around this skeleton. 

Individuals Organs  such as the brain, heart, lungs, liver etc represent the key business/transactional systems within a business, all of which are required to do a specific and highly focused series of tasks upon which the body relies.

The nervous system acts as a connector to the rest of the human body and allows the brain to issue a ‘thought’ which the nervous system converts into an action.  In terms of the business the nervous system equates to the Process Management Structure, which ensures that the enterprise strategy and planning [from the brain] is converted into operational reality across the ‘body’. 

The circulatory system critically delivers oxygen and ‘food’ to the body and is representative of the IT Systems which deliver infrastructure, e-mail, desk top access and access to the business systems [organs] around the body. 

The lymphatic system crucially provides the body with its ability to fight ‘foreign bodies’ and infections, and hence represents the control and compliance framework designed to manage risk and deliver control. 

Just as in the human body, all elements need to work together and so in an organisation we need to see these elements; organs, nervous system [process], circulatory system [IT] and lymphatic system [Compliance and Control] all to work together, if the body/organisation is to be healthy and achieve its strategic goals and objectives...

...now my wife she gets it, because I provided her a relevant context for my explanation.  I appreciate that this is an extreme example but when speaking to prospects and client’s alike making BPM relevant to them bears fruit for myself and my colleagues at Professional Advantage.

I would like to acknowledge Sourcing Shangri-La for providing me with the inspiration for the explanantion and this blog post.

Mobile BPM...so what's the BIG deal?

We have only just got used to the latest TLA [three letter acronym] BPM, when someone comes along a puts an M in front of it – Mobile BPM.

I heard it said only recently that the best thing you could possible say about this, is at least it is no longer a TLA! But is that really the best thing to be said about MBPM?

In a seminar series I ran in the autumn of 2010 a number of attendees expressed disbelief in the notion that there was any need for or indeed any value in, delivering business process management solutions on mobile devices.

Six to nine months down the line the growth in mobile devices is showing no signs of slowing and in fact, recent surveys suggest they are infact growing rapidly.

The IBM 2011 Global CIO study canvassed more than 3,000 chief information officers globally.  This survey revealed that mobile devices such as tablets, smartphones and notebooks come second on the survey’s must have technology shopping list 74 per cent of CIOs saying mobility solutions were the next best way to boosting competitiveness.  

We are now entering detailed discussions with these same organisations about potential BPM projects, where there is a high mobile requirement, and in one case the requirement is entirely conceived as a mobile solution for remote staff.

Whichever way you look at it, so many of us spend so much more time ‘on the road’ travelling, working outside normal offices hours, not being tied to our desks, and in the possession of mobile devices and technology, that up until now, we have been unable to fully exploit.

The case for Mobile BPM is made in a white paper we [Professional Advantage] have recently published. I suggest you take a read...and discover how we can you and your organisation can fully utilise the mobile devices, that until now have been executive ‘toys’ rather than effective business tools.

Download Whitepaper at http://www.profad.co.uk/invite/bpm-whitepaper.htm

THE FIVE COSTLY MISTAKES OF BPM: Observations in the field...from Jonathan Marcer the head of the PA XMPro BPM Team

My colleagues and I have been witness to a large number of discussions around why BPM projects fail, mistakes of BPM etc.  As with a large number of discussions in and around the BPM space they are just a little too theoretical.

My colleague Jonathan Marcer, the head of XMPro BPM Team in Sydney, Australia, has published a blog post where he has put together his thoughts on the '5 Mistakes of BPM' based upon real life experience 'in the field'.

I recommend you read the post at http://linkd.in/maLKUD

When delivering mobile BPM solutions; what are your experiences of the preferred and or most prevalent mobile devices in use?

Based upon a number of current live Mobile BPM deployments and feedback from a series of MBPM webinars we have run this year, the picture seems to be that the mobile device market place still remains somewhat fragmented.

Our experience is that no one player has become or is becoming dominant.

The most prevalent devices are not surprisingly: the Blackberry, the iPhone/iPad, Windows Mobile Devices and Android devices, but most organisations either have not set or even started to consider setting, a corporate preference or standard for which devices their users will have.

I would be interested in hearing your point oif view on this?  Thank you.

Don't children ask the best questions...? AND Push you for a real answer!

In my last post I recalled a conversation with my wife about what I do for a living, and specifically what does all the jargon we use, actually mean.

Now it has come down to me being interrogated by my ever inquisitive children; "What do you actually do dad?"

This got me thinking about summing up what I do, comprehensively but succinctly, and I turned first to the summary I have on my LinkedIn page which of course will give my children the answer they seek...won't it?

"I work with organisations to help them define business requirements, simplify the complexities and deliver end-to-end process solutions with measurable business returns and critically build long-lasting relationships based upon tangible benefits derived by all parties in the relationship." 

...I guess not, after reading this I am not sure I understand what I actually do.

One of the distinct advantages of working for an Australian company is that my antependium colleagues often have a very useful knack of cutting through all the ‘BS’ and get to the point very quickly.

Upon speaking to my colleagues we came up with the following summary:

I [we] deliver innovation solutions to very painful [process] problems.

Is it that simple? I guess so…

I am off to re-write my LinkedIn page and update our website.