1. 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

2. 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

3. 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

4. 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

5. 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

6. 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

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

8. 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.

9. 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.

10. 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?

11. 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 = 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.

12. 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. 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

13. Key Factors to the Success of an eInvoicing Initiative

14. 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

15. 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

16. QUESTIONS