Procure-to-pay (PTP) remains highly manual in most oil and gas businesses. Think of how inbound documents are managed, mismatches identified, payments processed, taxes calculated, and vendor statements and bank balances are reconciled.
Robotic process automation (RPA) can reduce the risks, processing time and cost of tedious activities while freeing people to focus on challenging work.
Three activities—document management and scanning, matching, and payment processing—show the advantages of using “bots” to deliver quick and impressive wins.
Document management and scanning
Combining familiar technologies—optical character recognition (OCR) and intelligent character recognition (ICR)—with RPA software can greatly accelerate the volume of invoices handled. Both OCR and ICR ease looking for data in documents, reading text and categorizing files. In conjunction with RPA software, both can scan and direct documents to the appropriate department with low error margins.
For example, Accenture worked with a global oil and gas company to deploy Phantom optical character recognition and Fusion automation to make more than 100 processes less time-consuming and costly. Intelligent automation enabled the company to achieve improvements in accuracy and efficiency. Additional benefits included a 67 percent reduction in manual average handling time and annual savings of $2.5 million.
As bots learn from past mistakes, they can be assigned to handle more advanced processes, such as matching and payments.
Matching earlier in the end-to-end process flow can shift issue resolution from back-end to front-end. For example, bots can match acknowledgements received from vendors with purchase orders to detect differences between purchase orders, goods, receipt and invoices. When a department receives an acknowledgement from a vendor at the entry point, it can use ICR and confidence intervals to identify discrepancies automatically in the ordering process, such as a mismatch between quantity and price.
When discrepancies are discovered early, the three-way match resolution can be expedited, rather than waiting until after goods are received or invoices prepared. Human intervention is required only after discrepancies are found.
Verifying that tax amounts match with expected values—a laborious and time-consuming activity—offers another case for RPA. Due to sales- and use-tax impositions being rules-based, bots can be programmed with OCR and ICR to review transactional information a tax analyst otherwise would review manually. The bot could perform the appropriate resulting action based on a taxability decision matrix that has been programmed into the software.
Pay cycles, remittances and reconciliations also hold potential for automation. Working with an oil and gas super major, we have seen the company realize up to $23 million in reductions in preventing duplicate payments. On top of cost savings, RPA can free up labor for value-added work, and create a more reliable and accurate data system.
Bots can be configured to perform tasks at the frequency clients are required to run their pay cycles, while considering the dates of previous cycles and types of payment runs. Bots can further be configured to send payment-remittance details to vendors when payment files are sent to banks. RPA also can be used to automate the simple parts of reconciling vendor statements, and further streamline payment processing through automated reconciliation of bank balances.
Further advances on the horizon
Think of RPA as an initial step in a longer automation journey. By investing in RPA, oil and gas companies position themselves to implement more advanced technologies, such as artificial intelligence and virtual assistants, which are likely to further improve financial performance.