Welcome to the Spring edition of 4C Associates’ quarterly Oil & Gas sector update. With oil majors publishing their first set of quarterly results of 2019 (reporting Q4 2018), it has demonstrated that after years of fighting to gain control of costs, the industry’s ‘big-guns’ can finally get back to generating significant cash flows.
Still, the question surrounding the long-term demand for hydrocarbons (and crude oil, in particular) remains uncertain. It’s clear that global growth for hydrocarbons is slowing, with total growth anticipated to be less than 1% between now and 2040 (Exxon’s 2018 investor presentation), with growth in the same period just turning negative in OECD countries. So how should the sector deal with this? In the short to medium term, there is an expectation for companies to seek and maintain the financial discipline they have worked tirelessly to implement and focusing on their Upstream portfolios to reach set growth targets. Longer term, it seems that there is already a small shift towards alternative sources of energy and businesses (e.g Shell acquiring Sonnen and BP acquiring Chargemaster for EV charging), but this looks unlikely to fill the gap.
4C have been working on the Centrica account since 2016, building a standardised Source-to-Pay process across all of Centrica’s business units (BU). Based on these processes, a rigourous RFP was conducted to select the IT-enabling technology. 4C provided an independent view of the solution providers, whilst simultaneously building the business case and carrying out the implementation of the change plan.
A 6-wave implementation programme was successfully executed, deploying the full suite of Ariba Source-to-Pay solutions globally; a critical aspect being the data cleanse and migration programme. 4C led the rationalisation and enrichment of 12,000 supplier records, whilst identifying and loading over 6,500 contracts.
“4C have been fantastic partners as we embarked on an ambitious IT transformation programme that is leading to fundamental changes in the way Procurement works at Centrica.” (Paul Booker, Head of Procurement Enablement at Centrica)