How a Unified Cloud Platform Transforms Oil & Gas Operations
The article discusses how legacy midstream accounting software in the oil and gas industry, often housed on office servers and fragmented across multiple outdated systems, hampers data integration, accessibility, and efficiency, and advocates for replacing these with a unified cloud-based platform to enhance transparency, streamline workflows, and eliminate costly, error-prone spreadsheet workarounds.
Series Part 2: 7 Reasons to Replace Your Legacy Midstream Accounting Software
In the age of working from home, streaming services, and social media, we run our digital lives in the cloud. Not long ago, cloud computing was new and companies debated whether to embrace it. Today, leveraging the benefits of the cloud is commonplace, so it’s surprising to see oil and gas applications still housed on office servers, with administrators maintaining databases and old software that can’t be accessed remotely. Unfortunately, legacy plant accounting software users experience these same pains. This gap affects not just plant accounting software, but solutions throughout the oil and gas industry. Being unable to leverage cloud software creates dozens of point solutions that don’t work well together, leading to enormous costs and making energy professionals work harder.
The "7 Reasons to Replace Your Legacy Plant Accounting Software" series aims to help energy professionals understand the limitations and risks of legacy solutions. Part 1 covered why midstream is ready for change, enhancing data transparency and accessibility, and improving user experience. This post explores the benefits of a unified software platform built on the cloud, and how you can skip spreadsheet workarounds.
The Problem with Multiple Software Solutions
Energy companies often rely on different software systems to run their business, many of which are built on technology that predates cloud computing. A midstream company may have separate software for plant accounting, division orders and disbursement, contract management, gathering, and financial accounting. These systems are often built with different technologies by different teams, even if from the same vendor. Each difference leads to poor or nonexistent integration, restricted data flow, and difficulty answering questions through reporting solutions. Many midstream workflows require multiple types of software, forcing users to shuffle data between systems, work with different interfaces, and use manual workarounds.
Legacy solution providers often extend products with outdated code or bolt on new functionality. Many vendors acquire other software companies, resulting in loosely coupled tools and data silos. This business model prioritizes acquisition over innovation, causing users to suffer from technical issues, increased time spent on monthly processes, and poor user experience. Without a modernization roadmap, these solutions only add features incrementally, creating gaps and slowing performance.
W Energy started with a roadmap for building a unified platform on the cloud for the energy industry. By bringing core workflows together, applications share a consistent dataset, eliminating data silos. Applications are inherently integrated, sharing a common user interface and master data list. For plant accounting and related modules, everything needed is accessible in one system, without logging into different applications or shuffling data. Gathering customers can securely manage nominations and track inventory from any computer. The approach is seamless and fully integrated, reducing software, administration, and hardware costs while accelerating business performance.
Eliminating the Need for Excel Workarounds
Midstream companies are realizing how critical software solutions are for supporting employees and customers. Whether accountants need to handle new ASC 606 revenue recognition standards, answer how results were calculated, or ensure accurate NGL shrink calculations, the last thing you want is to perform those calculations in Excel. Companies invest in accounting software, but users are often forced to rely on Excel due to system limitations, lack of transparency, or lack of trust in their software.
Why Users Are Forced to Use Excel
Experience with clients has shown that many provide spreadsheets for tasks their software couldn’t do accurately. For example, one oil and gas company in Denver wanted to convert from a legacy plant accounting solution, but was settling their plants in Excel because they didn’t trust their software.
It can be tempting to use Excel when uncertain about software calculations or facing limitations. However, manual validation and spreadsheet workarounds are costly and problematic for auditors. Manual verification of high-volume transactions increases the risk of human error, and working with financial data outside the ERP puts compliance at risk. Maintaining hundreds of spreadsheets also adds overhead costs.
Some reasons why legacy plant accounting software forces customers to use Excel include:
- Calculating inflation rates
- Verifying escalation schedules
- Calculating fixed recoveries and changing from ethane recovery to rejection
- Tracking minimum volume commitments
- Creating deficiency invoices
- Handling cumulative imbalances
- Handling prior period adjustments
- Calculating tier-based fees/POP percentages
- Tracking contract management terms, provisions, and dedications
- Applying revenue recognition requirements for ASC 606 journaling
Ditch the Spreadsheet, Drop More Revenue to Your Bottom Line
There is a real and high cost to relying on Excel due to lack of trust in legacy plant accounting software. One recent client, a large Permian midstream company, previously relied on nearly 100 spreadsheets for various workflows because their legacy solution didn’t meet expectations. This client now saves thousands of dollars in time, audit costs, knowledge transfer, and total cost of ownership. It’s not your fault if legacy software requires you to rely on Excel for daily or monthly tasks.
W Energy believes midstream companies deserve better than the status quo. Their product is designed from the ground up, listening to client pains and creating effective solutions to replace spreadsheets. They continue to invest in their product to exceed expectations. While you may still use spreadsheets occasionally, you shouldn’t pay for software that can’t handle your business or work with companies that don’t listen to your needs.
If you’re frustrated with using dozens of spreadsheet workarounds to close out your month, consider reaching out to W Energy to learn how you can close your assets faster and with confidence.
Related
7 Reasons To Replace Your Legacy Plant Accounting Software
Part 6 of the blog series highlights that legacy plant accounting software often fails to ensure compliance with complex regulations like GAAP and SOX, leading to risks such as lack of data transparency, reliance on error-prone spreadsheets, and audit difficulties, whereas modern solutions like W Energy Software provide features like Calc Trace and Show Association Graph to enhance audit readiness, data trust, and regulatory compliance for midstream companies.
Top Lessons for Improving Plant Accounting and Energy Back-Office Operations
The article highlights how outdated legacy plant accounting systems hinder energy controllers by forcing manual processes and costly workarounds amid increasingly complex upstream and midstream operations, and presents W Energy’s integrated platform as a solution that streamlines data entry, enhances connectivity, and enables faster, more accurate financial decision-making.
Revolutionize Your Oil & Gas Accounting
W Energy’s Stream+ software revolutionizes oil and gas accounting by addressing industry-specific challenges such as manual errors, legacy software inefficiencies, reporting difficulties, and lack of system transparency, thereby enabling accounting teams to improve data accuracy, speed processing, enhance regulatory compliance, and support strategic financial decision-making.
How Midstream Accounting Software Transforms Financial Operations
Midstream accounting software revolutionizes financial operations by automating complex volume allocations, reducing reliance on error-prone spreadsheets, centralizing vast operational data for improved accuracy and transparency, and streamlining intricate contract-specific pricing and reconciliation processes, thereby minimizing manual effort and enhancing strategic decision-making in midstream energy companies.
How to Optimize Operations with Midstream Oil and Gas Software
Midstream oil and gas software like W Energy’s Stream+ platform optimizes operations by automating complex production allocations, centralizing contract management, accelerating revenue distribution, consolidating reporting, and replacing fragmented legacy systems with a cloud-native solution that enhances processing speed, transparency, and scalability for gathering, processing, and transportation companies.
Transform Midstream Data with HighWire & Stream+
W Energy and Agile Midstream Products have partnered to integrate HighWire, a cloud-native, real-time measurement solution, with W Energy’s Stream+ platform, providing midstream oil and gas operators with an end-to-end, scalable, and automated system that enhances data accuracy, operational efficiency, financial clarity, regulatory compliance, and accelerates month-end close by seamlessly combining measurement, accounting, and reporting without client installs or Citrix.