C O M PA N Y P R O F I L E B E N E F I T H I G H L I G H T S
H E A D Q UA RT E RS : Houston, TX
F OU N D E D : 1988
I N D U ST RY: Oil & Gas
R E V E N U E : More than $1.9B (FY08)
E M P L OY E E S : Approx. 10,000
Key Energy Services Streamlines
Operations with Integrated
Field Service and Billing Solution
Executive Summary
Emerging from a holding company with interests in environmental services, Key Energy Services has grown to become one of the largest rig-based well service companies in the world, employing approximately 10,000 people worldwide.1 Known as a technology innovator, the Houston-based company offers a full range of oil- and gas-fi eld services, including equipment workovers, fl uid and logistics services, fi shing and rental services, pressure pumping, wireline, and drilling. It operates in all major onshore oil and gas producing regions of the continental United States and internationally in Argentina and Mexico.2 The company trades on the NYSE under the symbol KEG.
As part of a major initiative to more closely integrate fi eld-service operations and gain detailed visibility into business performance, Key invested in an enterprise-wide fi eld service and billing platform running Oracle’s Siebel Field Service application. The solution established a single, effi cient platform for tracking and pricing the services delivered by fi eld crews, and accelerated billing cycles by enabling staff to quickly convert work tickets into invoices. To boost effi ciencies further, the company consolidated invoicing at three regional billing hubs.
Since moving to the Siebel service platform, Key’s executives said they’ve gained valuable insights into operations that are driving a range of benefi ts and business-process improvements. Today, managers are keeping a closer track on equipment utilization rates, revenue and expenses across every region and redeploying assets and people to optimize revenue. Meanwhile, the system’s single nationwide price book is simplifying the way supervisors calculate service charges, increasing customer satisfaction. Down the road, executives plan to leverage the Siebel platform, and other Oracle applications, to drive a number of potential process improvements, from online customer portals to paper-less work tracking.
• Gained company-wide visibility into business performance metrics • Accelerated billing cycles
• Established high-productivity billing hubs • Reduced invoice processing costs
• Simplifi ed pricing and improved customer satisfaction with standardized price book • Laid foundation for continuous process improvements
Key Energy Services, Inc.
Key Energy Services, Inc. is one of the largest rig-based well service companies in the United States. The company provides oilfi eld services including well servicing, pressure pumping, fi shing and rental tools, electric wireline and other oilfi eld services.
1. As of December 31, 2008
2. In addition, the company owns a technology development group based in Canada and has ownership interests in a Canadian drilling and production services company and a Russian drilling and workover services and sub-surface engineering modeling company
Mainstay Partners LLC www.mainstaypartners.net
901 Mariners Island Blvd, Ste. 105 San Mateo, California 94404 -1592 650.638.0575ph 650.638.0578fx
2
B U S I N E S S B E N E F I T S E R I E S
Oracle Products and Services
• Oracle Siebel Field Service
• Oracle Database
• Oracle E-Business Suite
• Oracle Business Intelligence Enterprise Edition
“You’ve got to buid the right infrastructure initially, and Siebel is a great
foundational product.”
J O H N H O O D , C H I E F I N F O R M A T I O N O F F I C E R , K E Y E N E R G Y S E R V I C E S
Responding to Challenges
In its journey to top of the well-services industry, Key pursued an aggressive program of acquisitions, joining together a strategic mix of regional oil- and gas-service companies and extending its reach into every major oil and gas region in the United States. In less than 10 years, Key transformed itself from a company with fewer than 50 working rigs into one of the largest land-based well services company in the country.
As it propelled Key to the top of the industry, the acquisition program also left the company with an ineffi cient patchwork of systems for pricing and tracking fi eld-service work and invoicing customers. Critical operational data, such as equipment utilization and billing records, were scattered across hundreds of individual fi eld offi ces and equipment yards, each running separate computer systems. “We didn’t have an enterprise system,” said John Hood, chief information offi cer for Key Energy Services. “We had 150 locations but didn’t have a network, much less an enterprise billing system.”
To pull together a company-wide view of the business, each fi eld offi ce had to send batches of data over dial-up connections—a slow and error-prone procedure. The fragmented data made it hard for executives to see key details about the business as a whole. “There was limited visibility into customer data, including where we were sending our bills, what we were charging for things, and how long it took to get a bill out the door,” said Hood.
Building a Solid Foundation
The situation spurred Key to act in 2002, when Hood’s team launched a major overhaul of the company’s information systems, selecting Oracle’s Siebel Field Service software as the foundation for a new centralized system for managing fi eld service operations. Why Siebel? Among other things, Hood said it was because Siebel was one of the few enterprise applications based on “customer-centric” data model. “I liked the fact that everything revolved around the customer,” he said.
Since late 2003, Key has installed the Siebel-powered fi eld service and billing system at the company’s main lines of business, including its rig services, fl uids management, pressure pumping and wireline services divisions. “We’ve been able to expand the system to use it for other lines of business,” Hood said. Last year, Key upgraded to the latest version of the Siebel application and moved to a newer release of Oracle Database. In the coming months, it will be implementing enterprise resource planning applications from Oracle for managing fi nances, supply chain, close and consolidation processes. Hood said the Siebel solution—known inside the company as the KeyOps system— created a solid technology foundation that is enabling Key to institute a range of “process improvements” that are preparing the company for continued profi table growth. The improvements include everything from better visibility into operations to more consistent
pricing to faster billing. “You’ve got to build the right infrastructure initially, and Seibel is a great foundation product,” he said.
Unifying the Enterprise
As part of the Siebel project, Key consolidated its fi eld offi ces onto a single IT platform, paving the way for the establishment of several regional “billing hubs” where employees focus on turning work tickets into customer invoices. The company’s fi eld service operations generate approximately 100,000 work tickets a month, representing the delivery of a portfolio of services such as well workovers, horizontal drilling, hauling fl uids to and from well sites, and performing specialized operations like pressure pumping to optimize well production and wire-line services to gather data deep below the surface. A ticket gets started when a customer requests a service—usually over the phone, but increasingly through an electronic data interface. Dispatchers at the company’s trucking, or liquids management operation, match up employees with available trucks and deploy crews to the customer’s site. They also key in basic service details into the Siebel system, which is later used to issue invoices to customers. Returning from the job, workers send a scanned image of the work ticket to a regional billing hub for fi nal processing.
Calculating the charge for each service call is easier and more consistent now that supervisors have access to the Siebel-powered KeyOps system, which draws on a central database of standard nationwide prices and service codes. “Supervisors no longer have to price out the ticket,” Hood says. “The system does it for him based on a national price book and agreed-to discounts.” Moreover, the Siebel application connects seamlessly to the company’s payroll system so that the crew labor associated with each job is accurately accounted for.
According to Tommy Pipes, senior vice president of Key Energy’s rig services business, the simplifi ed pricing model has been a hit with customers. “We used to have 10 ways of describing one piece of equipment,” he said. “It drove some our big customers crazy.” Today, Pipes said the company maintains a list of about 160 equipment descriptions, down from 2,300, and a much smaller list of standard service codes. When Key rolled out the new system, “our customers were ecstatic,” he said.
Faster, More Accurate Billing
After implementing the Siebel system, Key moved forward with a plan to consolidate billing operations at three hubs in Bakersfi eld, Calif., Midland, Tex., and Shreveport, La. Staffed with billing specialists who create invoices from scanned copies of work tickets, the hubs removed the data-entry burden from workers at local work sites, and introduced
“Just having a unifi ed view of
the information has made a
huge impact on the business.
You couldn’t do anything unless
you did that.”
J O H N H O O D
C H I E F I N F O R M A T I O N O F F I C E R K E Y E N E R G Y S E R V I C E S
Mainstay Partners LLC www.mainstaypartners.net
901 Mariners Island Blvd, Ste. 105 San Mateo, California 94404 -1592 650.638.0575ph 650.638.0578fx
4
greater consistency, transparency and effi ciency into the billing function. “We drove a lot of the inconsistencies out of our data capture and billing practices” said Marshall Dodson, vice president and chief accounting offi cer at Key, adding that the centralized hubs also help the company fl exibly scale its administrative workforce to match transaction volumes.
Since implementing the integrated fi eld service platform, Dodson says Key pushes invoices out the door faster and at a lower average cost than before. Billing accuracy also has gone up. Moreover, executives said that it’s easier to pull together fi nancial data using the unifi ed system because its fully integrated with Key’s fi nancial software. The improvement is helping the company comply with increasingly complex fi nancial regulations. “Our sales tax capture and remittance process is light years better,” Dodson said.
Enterprise Visibility
Perhaps the most important gain, executives said, has been better visibility into
operations. “Just having a unifi ed view of the information has made a huge impact on the business,” said Hood. “You couldn’t do anything unless you did that.” To build a complete picture of its business, Key Energy loads information from its fi eld-service operations into an Oracle-based data warehouse, then runs a daily operations report—known as the DOR—that monitors key performance metrics such as revenue, expenses, and asset utilization. Pipes, the rig services senior vice president, said the report has become an indispensible management tool. “We live and die by the DOR,” he said.
Among other insights, the daily reports tell managers which rigs are generating revenue, and which ones aren’t, and helps the company take advantage of emerging business opportunities. For instance, to generate more revenue and speed service, the company could decide to move underutilized pieces of equipment closer to areas where demand is higher. Better visibility could also help the company adjust prices and discounts to match shifting demand across different markets.
More Opportunities
A recent upgrade of the Siebel application will offer Key more chances for streamlining operations. Currently the company plans to launch an online portal where customers can go to approve work tickets when their representative isn’t on site to sign off on a job. The move is expected to raise effi ciencies on the fl uids management side of the business, where tracking down a company rep and getting sign-off can sometimes delay billing cycles by more than a week.
“Our sales tax capture and
remittance process is light years
better.”
M A R S H A L L D O D S O N
V P A N D C H I E F A C C O U N T I N G O F F I C E R K E Y E N E R G Y S E R V I C E S
This year, Key plans to phase out its aging enterprise resource planning and business intelligence applications in favor of Oracle E-Business Suite and Oracle Business Intelligence Enterprise Edition. The new applications, which integrate seamlessly with the Siebel system, are expected to bring even more business-process effi ciencies to the company and add sophisticated new analytics capabilities.
Down the road, Key is looking at a range of potential projects that would leverage the Siebel platform. One idea would be to phase out paper work tickets and have dispatchers enter service delivery details directly into the system, enabling invoices to go out as soon as the job is fi nished.
