The virtual command center’s view of the market is going to demand that most oil and gas companies shore up cash coffers. However, given multiple rounds of operational efficiency, workforce rightsizing, competitive sourcing and wider transformation efforts over the past five years, energy companies are short on cash optimization ideas that would hit the bottom line fast. Resorting to across-the-board cuts is not the answer. Organizations will need to shift from asking, "how much should we cut" to "what do we need—starting from a clean slate—to run our operations optimally". This line of thinking should have a specific focus on three areas likely to deliver 15% in CapEx and OpEx savings—Third-party spend, working capital forensics and streamlining the organization.
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The need to strategize spend at pace is going to force companies to embrace new tools and methods:
- AI-driven mapping technology to understand cost variances
- New scripting tools to process data
- Visualization tools that enable focusing on the opportunity
- Collaboration tools to drive actions
Fortunately, companies likely have the right budget tools already. If they link them to industry-leading practices, they can create a new kind of "spend visibility." In-house or external experts make it all the easier to create and develop real, practical solutions to budget woes quickly. To implement these tools and methods, companies can take a top-down or bottom-up approach:
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Projections based on Accenture analysis and experience working with oil and gas companies.
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