September 2016 Mike Weiss Chief Technology Office Oildex Buyer and Supplier Collaboration: Key to the Success of an Electronic Invoicing Initiative September 2016 Mike Weiss Chief Technology Office Oildex

Paper-Based Processes Add Cost and Complexity Invoice Submission Manual Mailing Of Invoices Invoice Receipt Manual Sorting Of Invoices Accounts Payable Data Entry & Verification Accounts Receivable No Visibility into Transaction Status SUPPLIER BUYER Finance Department Impact on Cashflow forecasting Operations/Approvers Manual Routing & Approval 2

Move to eInvoicing – Positive for Buyers and Suppliers BUYER SIDE SUPPLIER SIDE Increase operational efficiencies Improve visibility into spend real-time Reduce manage non-contract spend Increase early pay discount capture Increase operational efficiencies Improve visibility into invoice and payment status Improve accuracy of cash flow forecasting Reduce Days Sales Outstanding (DSO) THERE CAN BE MORE: Connect operational and financial data Coding and approval all in one system Increase value add of Operations staff Focus on strategic tasks instead of invoice processing Expand beyond basic invoice transactions Purchase orders, field tickets, receipts Increase collaboration with the supplier base Faster resolution of disputes; fewer vendor inquiries THERE CAN BE MORE: Enhanced account reconciliation Solution tracks progress on invoice at every stage Increased on-time or early payments Faster processing of invoices and resolution of disputes Reduction in AR staff time spent on tracking invoices Easy access to invoice status online Improved customer satisfaction Positive impact on relationships with the customer base

Automating Field Tickets Adds another Level of Benefits FIELD OPERATORS ACCOUNTS PAYABLE Ensure work performed matches information provided on the field tickets Validate coding provided on field tickets Reduce time spent on reviewing and approving field tickets Reduce time spent on identifying, reconciling and following up on exceptions/duplicates SENIOR MANAGEMENT SUPPLIERS Increased visibility into real-time spend through the entire process Improved ability to analyze data and make key decisions Reduce number of exceptions and services that don’t match existing contracts Reduce days sales outstanding 4

Best Practices for Invoice Management Electronic submission and receipt of invoices Validation of invoice data elements Validation of coding elements on field tickets Business rules to automatically route invoices Smart coding to reduce manual entry and errors Electronic signature on field tickets Electronic receipt of POs Integration into sales order systems Validation against budgets Electronic transmission of POs

Key Performance Indicators (KPIs) to Measure Buyers and suppliers are tracking the same metrics on the two sides of the equation – collaboration is key to have a positive impact on these KPIs that count Key Metric for Buyers Indicator Percentage of invoices being received electronically  Percentage of suppliers that are sending electronic invoices Percentage of invoices that have an error or exception  Percentage of available discounts that are captured Average time to process an invoice from receipt to payment Average cost to receive and process an invoice Percentage of payments that are late Number of invoices processed per month per AP FTE Key Metric for Suppliers Indicator Percentage of invoices being submitted electronically  Percentage of buyers that are receiving electronic invoices Percentage of invoices that have an error or exception  Average days sales outstanding (DSO) Average time to process an invoice from submission to payment Average cost to submit and process an invoice Percentage of payments that are late Number of invoices processed per month per AR FTE

eInvoicing from a Supplier’s Perspective Benefits and Challenges Terry Thomas, Global eCommerce Manager Schlumberger

The eCommerce Perspective & Promise The Promise of eCommerce to Schlumberger clients, partners, and employees is a set of business practices that promote efficiency, mutual cost reduction, and the highest quality services for all parties - customers, trading partners and Schlumberger. This promise is best realized when based upon mutually accepted industry standards and processes, security, confidentiality, data integrity and ownership.

Benefits from Electronic Commercial Transactions versus Paper 5/10/2018 Benefits from Electronic Commercial Transactions versus Paper Oil Company Buyers Product & Service Company Suppliers Reduce administrative costs and improve efficiencies (Reduced AP Costs, duplicate paperwork, etc.) Capture and analyze spend Manage commitments and contract compliance More “real-time” view and transparency of spend Operations benefits (Engineers drilling wells - not shuffling paper) Reduce administrative costs and improve efficiencies (Reduced duplicate paperwork) Reduced AR (Accounts Receivables) and collection costs Speed of payment With these requirements, eCommerce has been able to meet them, and provide more.

Customers Moving to Electronic Invoicing Trading Partner Agreement Buyer & Third party (Acceptable T&C’s data Ownership, usage, confidentiality, fees ….) Follow Industry Accepted Standards (PIDX XML standards) Mutually acceptable business processes Industry Standards The “e-Envelope” Middle Ware ERP System Buyer Supplier Internet Oilfield Supplier Portal Over 250 Buyer Agreements Over 30 Network and Service Provider Agreements`` Middleware Business Rules Routing Messaging / Acknowledgements Automated, no manual, browser-based?

Reducing Transaction Costs 5/10/2018 Reducing Transaction Costs Buyer Suppliers Cost reduction in Accounts Payable (AP) Resources Example: Large Independent O&G company Role of 35 FTEs performing data entry eliminated, FTEs reassigned Large Global IOC: DSO reduction = 15 Days Large NOC: DSO Reduction = 20 Days For each $1B in invoiced revenue where DSO is decreased by15 Days $41M in increased liquidity $3.2M Annual interest saved on increased liquidity (Assumed Cost of Capital = 8%) With these requirements, eCommerce has been able to meet them, and provide more.

Ongoing and Future Challenges ERP’s and Networks don’t Support Uniqueness of Upstream Oil & Gas procurement process or Industry (PIDX) standard Customer specific routing and coding data 1-7 per customer (20+) unique attributes (PO, WBS, Cost Center, GL, Dept code, Charge to, Approver, Property, Field code, ….) Dispute notifications and resolution Further adoption of PIDX invoice response message vs. email or portal browsing PO, SO, WO value exceeded, closed or invalid Customers role in timely resolution Requirements for backup and field stamps in an increasingly automated and mobile world Systematic rate validation Field Ticket Proforma Invoice business process

Key Factors to the Success of an eInvoicing Initiative

Electronic Invoicing is More than Just Technology Electronic invoicing is a process with multiple steps and two equally vested participants Invoice Received Field Ticket Generated E-INVOICING ECOSYSTEM Goods or Services Delivered Invoice Matching Or Approval Purchase Order Created Order Received

An eInvoicing Initiative is successful when… It is equitable and mutually beneficial to all participants Both parties are looking to collaborate to increase efficiencies There is clear agreement on ownership and use of data The processes are compatible with specific policies and procedures of both parties Requirements and processes are clearly understood and documented There is minimal impact and change for the end users Both parties leverage opportunities to optimize the process There are clearly defined processes governing the initiative

QUESTIONS