OTC 2009: SaaS-based apps arrive for oil and gas industry

By slashing costs while increasing accessibility, software as a service (SaaS)-based applications have roiled markets for business applications in many industries. It looks like the energy industry’s time has come.

On May 4, at the Offshore Technology Conference, Enbase Technology Solutions will introduce a web-based Lease Opportunity Management tTool that it says small- to mid-size companies can use for a fraction of the cost these companies more typically pay for similar capabilities via traditional software licenses.

Anyone using Google’s Gmail or similar e-mail services already is familiar with the basic outlines of SaaS-based applications. The information-technology infrastructure for SaaS lies outside the user’s local computing environment, and is accessible via broadband Internet connections. The rules engine and database are stored on remote servers and the user downloads the interface on an as-needed basis. The paradigm is also referred to as “cloud” computing. Rather than buying software licenses, users essentially lease the solution.

By far the most popular SaaS-based business application is Salesforce.com’s customer relationship management (CRM) tool, which is one reason why the energy industry may be relatively unfamiliar with the concept.
“The energy business is selling a commodity product,” said Wade Bennett, a principal with Enbase. “Therefore most E&P companies don’t have a traditional sales force, and they don’t have a need for traditional CRM or other type sales-support applications. That’s why we think this is new to the industry.”

Based on its leadership role, Salesforce.com also has introduced a development platform, called Force.com, which other vendors use to deliver SaaS-based applications. And that’s what Enbase is doing.

“We’re bringing a commodity approach to a commodity market,” said Bennett. “Our lease management tool represents a major advance in faster software delivery and cost reduction. We’re not aware of any business application that small- and mid-size E&P companies can acquire for less than a quarter-million dollars. We’re talking 10 percent of that.”

For most E&P companies, deciding whether they’re going to lease a property is fundamental to their business as they compete with a range of E&P companies for choice acreage. Typically, land departments field information from agents and brokers on leases coming available, and enter the relevant data into spreadsheets. Next the geologists, and then the finance people look at it. Finally it goes to the executive level. At any point along the way the opportunity may be put to the side.

It is a labor-intensive, collaborative process, and a clear benefit if the process can be speeded based on use of rules, alerts, queues, reminders, and automatic elevation. “It’s all workflow driven so that a company can go through its due diligence faster than a competitor,” Bennett said.

Heretofore, Excel spreadsheets have been the most typical way of doing the job. Use of the Enbase tool provides advantages over Excel, including the following:
· Network access isn’t needed — even a Blackberry or cell phone can be used to gain access;
· Task lists, automatic calendaring, or alerts based on actual project parameters;
· Automatic report and metrics generation; and
· Version control and audit capabilities.

At the same time, the tool is user friendly for those familiar with Excel, allowing full export from and import to Excel.

To use a SaaS-based application such as that from Enbase, no hardware purchases are required; and in-house or contracted IT expertise isn’t needed. A laptop and Internet connection give any authorized user secure access to the solution.

“The business rules engine and data are stored on our servers using multi-tenancy,” Bennett said, “which is basically like living in an apartment building, where many residents share the same building but each has its own apartment with its own entrance. That’s where the economies of scale come in.”

At the same time, multi-tenancy allows customization, or configuration, to match a company’s needs.

“Say one company wants the process to start with their geologists rather than the land department. They’re able to easily configure those workflows,” said Bennett.

If a company feels it is of paramount importance it have separate access to its data and intellectual property, “the Force platform has an application programming interface, or API, that allows users, if desired, to extract all the data as often as several times a day to their own database,” Bennett said.

The Force.com platform is said to be used today by more than 55,000 companies worldwide, including many in manufacturing, financial services, and healthcare, where security and performance are of great concern.

Finally, over the course of the next 12 to 18 months, Enbase intends to introduce, based on a release schedule of every three months or so, a complete suite of applications for E&P companies, including lease management, permiting and regulatory work, operations (including drilling operations and site facilities), production management and acquisitions/divestitures.