It’s a popular opinion in the current market, the idea that digitizing field ticketing from paper to an app with an invoicing portal is all that is needed to fully ‘automate’ the procure-to-pay process. While a progressive step, it only gets you part way there.
Consider this: As a homeowner, you’d never agree to automatically pay a contractor’s bill simply because you received a digital invoice without first ensuring that the job was completed in a comprehensive and satisfactory manner, right?
In that same vein, digital ticketing alone does not enable companies to automate contract execution since that lack of assurance is still a missing (and often costly) component. Digitizing field ticketing is a necessary but insufficient step to true automation. While this move does enable integration with payment systems, it does nothing to ensure that the data being digitized is accurate. Any time a human is typing in values, locations or products delivered, there is potential for error or, in the worst case, fraud.
Additionally, this tactical ‘digitalization’ does little to mitigate the significant administrative burden that goes along with execution of buyers and sellers’ contracts. When all that you do is digitize existing paper processes, both parties must still touch, review and potentially dispute each ticket in addition to manually creating and approving each invoice for payment. This ‘much-less-than automated’ process yields thousands of hours of wasted back office time and does little to improve the elongated service-to-payment cycle.
With rampant over and underbilling, frustrating payment delays and a multitude of unnecessary manual steps, simply digitizing ticketing systems doesn’t get oil and gas companies where they want to be. Those that embrace digital- and mobile-based field service tickets are moving in the right direction, but for operators and service companies looking to cut costs and streamline lease operating expenses (LOE), automation is the real answer.
It Takes More Than Digitization to Achieve Automation
Blockchain-powered and secured smart contracts supply the exact type of automation needed across commercial relationships. Whether dealing with crude, wastewater, sand, production chemicals, rentals or any other field service, Data Gumbo’s interconnected smart contract network, GumboNet, enables buyers, sellers and third-parties to automatically measure exactly what happens in the field and validate volumes claimed in tickets.
By matching to sensor data, tickets are auto-approved and can move to auto-invoicing with zero human touches. Those that do not match are flagged and can be resolved the very same day in GumboNet resulting in savings on average of 1-10% depending on the commodity or services delivered. Further results include reducing manual touches 96-98% in digital ticketing and invoicing systems. Smart contracts can publish directly to financial systems as well, providing the missing link to fully automated payments. Finally, parties can move from taking 60-90 days to finalize their revenue or spend to a truly automated 24 hour cycle, providing real-time, auditable financial visibility.
Going the step beyond digitization to automation allows buyers and sellers to capture value and execute payments based on real-time, accurate data instead of estimates, assumptions and processes that hinge on human behavior.
