our mission e⁴

Business Process Reengineering and Systems Implementation

Client Situation: Faced with undefined business processes impacting the operational efficiency of inter-related business units, the client retained Endeavor Management to evaluate and re-engineer one of their more critical business processes. As a result of this effort, significant understanding and improvement was achieved in this business area with approximately 80 percent of the identified issues resolved.

With annual revenues in excess of $30 billion, this E&P company had grown from a small local business into an international enterprise consisting of various related, but independent business units. Depending on location, the oil & gas properties were owned by one of the individual companies, but development and operating agreements would typically exist across several of the business units. In addition, joint operating agreements would routinely exist with other third parties.

The existing AFE process -- for new and operating wells, operated and non-operated -- merely evolved over the years; was not documented; and was totally dependent on the knowledge of those involved. The information flow across business units was fragmented and key financial information was often late in reaching the involved/impacted organizations. In addition, the needs for information to and from the outside partners were often missed or late.

As the business continued to expand, there was also the potential of either going public or of an acquisition situation. In either case, the financial group recognized that mandatory Sarbanes-Oxley audit requirements could not currently be met.

As an initial effort to start documenting processes and addressing specific issues, management selected the AFE process for focused improvement. Management wanted to first document their existing process and then modify the process to address the specific issues.

Endeavor Management Solution: The initial starting point was to identify the range of issues that the various internal organizational units faced, as well as those challenging the independent business units. Joint work sessions were conducted over a four day period with the issues documented in context diagram to permit grouping and root cause analysis. After all meetings had been conducted and the issues grouped, a combined review session was performed with the various parties to validate the issues and ensure that all major issues had been identified.

With the issues identified, the current as-is process was documented to understand the various workflows. These workflows were then structured into block-flow diagrams by case study major function and an IDEF0 analysis conducted with each responsible group. Non-value added activities as well as gaps and trigger points were identified, along with IT system requirements and interfaces. The issue context diagram was then correlated to the work process flow and the workflow correlated to the issues.

Based on the above activities, a "could-be" business process was developed and the issue diagram updated to illustrate what issues would be resolved and how. A series of review meetings were held with the impacted parties and a final "to-be" process derived. This process was then documented into a workflow structure, color coding operational and system changes that would take place in order to assist in the organizational change management activities.

Results and Benefits: While benefits were not quantified in dollar terms, it was recognized that substantial financial gains had been achieved by the reduction of chasing information, acquiring better financial planning information, and the reduction of issue firefighting.

Over 80 percent of the identified issues had been resolved.

Other benefits that were realized included a more expedient flow of information across the internal business units and with outside parties permitting pro-active evaluation of alternatives.

In addition, the project resulted in the avoidance of costs that occurred because "things just happened" which had previously not been identified until after the fact. It was also noted that for the first time multiple people within the organization understood what needed to be done end-to-end. System changes were also planned in an integrated manner, requiring less rework than implementing a non-integrated change which typically creates unforeseen problems.