Although technology provides access to many more sources of information today than ever before, the basic decision-making process remains the same. Decisions are primarily based on three criteria — experience, the process involved, and the data provided. In today’s fast-paced business environment where decisions must be made quickly and accurately, accessing the right data is critical.

According to a new survey from Pitney Bowes Business Insight, companies have worked for years to improve data quality, yet find it challenging to maintain accurate information and struggle to quantify the true business cost of poor data quality.

Embracing integration creates a shared language across the company.



According to the survey “The State of Data Quality Today,” one-third of survey respondents rate their data quality as poor at best, while only 4% rate it as excellent. Meanwhile, 63% of respondents said their organizations have made no attempt to calculate the cost of database errors to their businesses.

Among other findings, only 37% of respondents said their companies have some form of data-quality initiative in place, while 17% of companies have no plans at all to start such a program. Working around poor data quality can be “devastating” to productivity, operational expenses, and customer relationships, Pitney Bowes said.

In the oil and gas industry, accuracy and quality of information are difficult to ensure due to the high volumes of complex data, legacy systems, and silos of information. Much of the data received in oil and gas companies are unstructured — coming from multiple places, sometimes in multiple languages. Decision-makers need data to be structured into formats that can be easily understood and are relevant to the situation. Otherwise, valuable time is consumed filtering through unstructured data to structure information into a usable format.

Most companies use technology to help run their businesses. The problem isn’t lack of technology, but rather that the technology used doesn’t connect. What this means to a company is that although it has systems to manage discrete functions, information from each system isn’t readily and automatically shared with other systems.

For example, a company may use SAP to manage its financials, PeopleSoft to manage HR functions, and Maximo to manage hard assets. Using disparate systems makes it difficult for IT departments, isolates the user community, and is more costly to the business. To exacerbate the situation, because users are trying to access multiple systems, gaining access to important and pertinent information is often difficult or sometimes impossible.

From the perspective of senior executives, it is critically important for them to have the right information — at the right time — to enable good
decision-making.

Finally, a key challenge for many companies in the current market environment is managing costs. Most oil and gas company executives agree that they need technology to help them manage their business, but the costs — both upfront and ongoing — of many of the existing solutions today are too high.

Technology to the rescue

The oil and gas industry as a whole has typically been a late adopter of new technology, specifically when it comes to back-office systems. In the past, energy companies were content pulling data from siloed systems, combining the data in spreadsheets, and publishing reports. This process was very time consuming and led to inaccuracies and decisions based on inadequate information.

Today, people expect accurate information on their BlackBerries. They want business decisions to be made as quickly and accurately as going to the GPS function on a BlackBerry and getting driving instructions to an office across town. But how can that be achieved?

Some of the ways that technology helps accomplish this include:
• Standardized formats. The more
standard the data, the more
structured it is.
• Accessibility. When data is
accessible and easy to use, it
is easier to validate.
• Integration. Siloed information needs to be shared for better
communication.
• Cost. Keep the cost down so that it is embraced. If something is too costly, adoption will be limited. Take the iPhone. Apple is on version three of this technology, and the cost continues to drop as the phone increases in functionality. Adoption of the iPhone has skyrocketed to 21.4 million users to date. Sales in Q4 2008 temporarily surpassed those of RIM’s BlackBerry’s sales of 5.2 million units.

While most executives might say that of all of these cost is most important, the fact is that integration is most important and will ultimately be a cost-saver. Although everyone will agree that data is a valuable commodity, if data cannot communicate in a way that makes it valuable for decision-making, the data does not add any value to an organization.

Implementing integration

With merger and acquisition being the name of the game today, data integration is more important than ever. When the ink dries on the contract, the challenge begins.

One customer of WellPoint Systems, over a several-year period, had made multiple acquisitions. The accounting for each acquisition was being performed on the legacy system that had come with each acquisition. At the end of the month, consolidations were performed, taking data from the multiple systems and combining that data into a spreadsheet. While this was time-consuming and led to risks of data entry errors, the process was acceptable to the company. Yet the operations department had no view into the company’s entire operations. In time, ownership in particular wells came from different acquisitions. Since the data were kept in multiple systems, a view into the total operational cost was difficult to find.

By converting the data from disparate systems into one corporate database, the company is now able to better understand its operational challenges and opportunities.

Once integrated, the company was able to not only view all of its data (wells, AFEs, and leases) but to make decisions based on fact. This decreased time and increased both productivity and profitability.

Integration is key

When databases are integrated so that ownership information can be viewed from the land system, production volumes from the production system, operating costs from the financial system, and geological information, companies have a clear picture and are able to make good decisions based on factual information.

Additionally, the money saved because of operational efficiencies allows operators to invest more capital in developing reserves.

Consider integration to be comparable to a shared language. If people are speaking the same language, little should be lost in communication. But if one is speaking English and another is speaking French through an interpreter, there’s always the chance that something small but vital could be lost in translation. Embracing integration allows companies to focus on a common shared language across the organization, improving decision-making results and improving the
bottom line.