Petrobank Heavy Oil gains new insight into finance and IT processes

Building on a cost-effective, highly automated IBM Business Analytics platform with help from Raven Bay

Published on 31-Oct-2011

Validated on 01 Apr 2013

"When it’s complete, we anticipate that the reporting process will be 98 percent automated, so instead of taking many hours, we should be able to generate it in about five minutes. We’ll be able to use the hours we save on analysis, rather than just number-crunching." - Dan Kennedy, Manager of Business Systems, Petrobank

Customer:
Petrobank

Industry:
Chemicals & Petroleum

Deployment country:
Canada

Solution:
BA - Business Analytics, BA - Business Intelligence, Information Infrastructure, Information Integration

IBM Business Partner:
Raven Bay Services

Overview

The Heavy Oil Business Unit (HBU) is one of the three main divisions of Petrobank Energy and Resources Ltd, a Canadian oil and natural gas exploration and production company that has its headquarters in Calgary, Alberta. Petrobank’s HBU is unique in the industry for its use of the patented THAI® (Toe to Heel Air Injection) technology, a new method of extracting heavy oil and bitumen from oil sands. Compared to other in-situ methods, THAI® offers considerable economic improvements, as well as reducing the environmental impact of the extraction process.

Business need:
As an innovator in the oil and gas sector, Petrobank’s Heavy Oil Business Unit (HBU) is set to expand significantly in the next few years. Its existing financial reporting processes were primarily manual, and it wanted to find a more sophisticated business intelligence solution to support current operations and future growth.

Solution:
Petrobank worked with Raven Bay, an IBM Business Partner, to design, iteratively develop and deploy a solution based on IBM® Cognos® Express. The solution not only substantially automates financial reporting, but also provides new insights into the company’s invoicing process and IT helpdesk operations.

Benefits:
It is anticipated that vital monthly financial reports will be generated and distributed in less than five minutes, eliminating many hours of manual work. Allows the IT department to monitor helpdesk performance, showing that reductions in response times for IT service requests have been achieved. Gives the finance department greater visibility of the invoicing process, making it easier to remove bottlenecks and accelerate invoice processing. Provides a comprehensive business analytics solution at less than 50 percent of the estimated cost of other reporting platforms that Petrobank evaluated.

Case Study

The Heavy Oil Business Unit (HBU) is one of the three main divisions of Petrobank Energy and Resources Ltd, a Canadian oil and natural gas exploration and production company that has its headquarters in Calgary, Alberta.

Petrobank’s HBU is unique in the industry for its use of the patented THAI® (Toe to Heel Air Injection) technology, a new method of extracting heavy oil and bitumen from oil sands. Compared to other in-situ methods, THAI® offers considerable economic improvements, as well as reducing the environmental impact of the extraction process.

Corporate growth increases information needs

Petrobank is currently using the THAI® process at a site near Kerrobert, Saskatchewan, and several other projects are due to begin in the near future. As a result, the 80-person company is expected to grow significantly in personnel, organisational complexity and financial power over the next few years. From the perspective of the Business Systems team, this growth forecast presents both a challenge and an opportunity.

“We recognized that as we grow, our need for rapid access to accurate information about finances and operations would become more acute, and we wanted to get ahead of the game and find a reporting solution before we started running into real problems,” explains Dan Kennedy, Manager of Business Systems at Petrobank. “A new platform would also give us the opportunity to eliminate some of the time and effort that we were already spending on reporting.”

Taking the opportunity to re-engineer reporting processes

Like many mid-sized companies in the oil and gas sector, Petrobank’s existing reporting processes involved a combination of direct data extracts from core systems, Microsoft Access databases, and Microsoft Excel spreadsheets.

“There were a lot of manual steps to get the data into an easily comprehensible form, and there were always concerns about data quality,” says Dan Kennedy. “We spent time crunching numbers, double-checking results and reworking everything when we found an error. To take one important example, we have a monthly financial report that we call a ‘flash report’, which used to take many hours to pull together. This report is a crucial tool for our senior managers and therefore we wanted to make it faster and easier to generate.”

A potent combination: IBM Cognos Express and Raven Bay Services

Petrobank decided to find a solution that would provide a more automated approach to reporting, and began reviewing the various offerings available from the main software vendors.

“For a company of our size, most of the full-scale business intelligence solutions on the market just don’t make financial sense,” comments Dan Kennedy. “IBM is one of the few major players with a solution designed for mid-sized businesses, and we liked the fact that IBM Cognos Express gives us practically all the functionality at a price-point that fit our budget.

“Equally important to this project was the services element. We decided to work with Raven Bay, an IBM Business Partner and one of the top specialists in business analytics technologies in our area. We’ve found them an excellent partner for this project because they were prepared to listen to our needs and adapt their methodologies to align with the way we do business. Their agile, iterative approach to analytics development helped us to continually show progress, thereby maintaining a high level of internal engagement and support.”

Dan Kennedy adds: “The combination of the comparatively low licensing costs of IBM Cognos Express and Raven Bay’s cost-efficient development methodology is helping us bring this project in at far less cost than many of the full-scale BI solutions we looked at. All in all, we estimate that this approach is more than 50 percent cheaper than the other options.”

Benefits of an iterative methodology

The project has now been running for six months, and the engagement with Raven Bay is expected to last for one more month. The iterative approach taken by Raven Bay means that although the project is still ongoing, Petrobank has been able to deliver a consistently improving toolset to the organization.

“The good thing about adopting an iterative methodology is that you can quickly show the users what the solution can do, and as soon as they see the potential, they become much better at prioritizing the features and reports that will deliver most value,” explains Don O’Dwyer, President of Raven Bay. “Another advantage is that it allows projects to be funded on a drip-feed basis, instead of allocating all the funding up front: the company can fund a project through the first iteration and then decide whether the outcome is useful enough to deserve further development. As a result, the solution you build is aligned much more closely with what the business actually needs, rather than what they thought they needed at the start of the project.”

Faster, easier financial reporting

Power users can use Express Xcelerator to manipulate data via a simple, spreadsheet-like user interface, or log in to Express Advisor to perform ad-hoc queries. Meanwhile, the Business Systems team is able to use Cognos Report Studio to develop new standardized reports and distribute them automatically to different user-groups on a scheduled basis.

“One of our bigger projects was to build a new version of the flash report in Cognos Express,” says Dan Kennedy. “When it’s complete, we anticipate that the reporting process will be 98 percent automated, so instead of taking many hours, we should be able to generate it in about five minutes. We’ll be able to use the hours we save on analysis, rather than just number-crunching.”

Gaining new insights into business processes

As well as automating and streamlining existing reporting processes, the solution is also giving Petrobank insight into areas of its business that were previously completely opaque.

“One example is invoice processing,” explains Dan Kennedy. “If it’s taking too long to code invoices, get them approved and pay them, we run the risk of incurring late payment fees and potentially damaging our relationship with suppliers. Before we built our invoice analytics solution with Cognos Express, there was no easy way to be sure where the bottlenecks were in the invoicing process, so when delays occurred, it wasn’t easy to understand how to address them. Now, we can track invoices through each stage of the process and see where the hold-ups are. This is helping us focus our efforts in the right places, and should ultimately allow us to accelerate the whole process.”

Benefits of an evidence-based approach

A similar solution has been put in place to monitor the performance of the IT helpdesk by reporting on the time taken to respond to support requests, the time taken to resolve issues, and which departments are making the highest number of requests. These metrics are consolidated into a single standardized report which is emailed to IT management on a monthly basis.

“Over the past year or so, we have been engaged in an initiative to reduce the response time for IT support requests, but we had no easy way to understand whether we were successful,” says Dan Kennedy. “The Cognos Express solution has enabled us to analyse trends across the whole helpdesk and prove that response times have actually fallen month-on-month, so we can demonstrate to senior management that the initiative has been a success.”

He concludes: “As we continue to expand the role Cognos Express plays in delivering insight to our business, we expect to see further benefits.”

About Raven Bay Services

Based in Calgary, Alberta, Raven Bay Services is an IBM Business Partner that focuses on helping businesses simplify and harness their data to drive competitive advantage. The company provides strategic consulting, development and implementation services across the full spectrum of IT, with particular strengths in performance management and business intelligence, business continuity and data management, hardware implementations and collaboration and messaging.

About IBM Business Analytics

IBM Business Analytics software delivers actionable insights decision-makers need to achieve better business performance. IBM offers a comprehensive, unified portfolio of business intelligence, predictive and advanced analytics, financial performance and strategy management, governance, risk and compliance and analytic applications.

With IBM software, companies can spot trends, patterns and anomalies, compare “what if” scenarios, predict potential threats and opportunities, identify and manage key business risks and plan, budget and forecast resources. With these deep analytic capabilities our customers around the world can better understand, anticipate and shape business outcomes.

Products and services used

IBM products and services that were used in this case study.

Software:
Cognos Express Xcelerator, Cognos Express, Cognos Express Advisor

Legal Information

© Copyright IBM Corporation 2011. IBM Corporation, Route 100 Somers, NY 10589, US Government Users Restricted Rights - Use, duplication or disclosure restricted by GSA ADP Schedule Contract with IBM Corp. Produced in Canada, October 2011. All Rights Reserved. IBM, the IBM logo, ibm.com, and Cognos are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries, or both. If these and other IBM trademarked terms are marked on their first occurrence in this information with a trademark symbol (® or ™), these symbols indicate U.S. registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law trademarks in other countries. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at: ibm.com/legal/copytrade.shtml. THAI® is a registered trademark of Archon Technologies Ltd., a wholly-owned subsidiary of Petrobank Energy and Resources Ltd. Microsoft, Windows, Windows NT, and the Windows logo are trademarks of Microsoft Corporation in the United States, other countries, or both. Other product, company or service names may be trademarks or service marks of others. References in this publication to IBM products or services do not imply that IBM intends to make them available in all countries in which IBM operates.