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Knowledgebase » Volume 9 (2010) » Update 6 Oil and Gas Industry Spotlight
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Despite the complexities of the oil and gas industry, SAP BusinessObjects Planning and Consolidation can deliver a simplified environment that handles both planning and consolidation needs. You can base consolidations on period or calendar, and planning via reusing dimensions, reports, processes, and pre-delivered content to simplify your reporting environment. |
Categories: Consolidation, Financials, SAP BusinessObjects Planning and Consolidation
| Key Concept |
| The upstream operations of an oil and gas company, namely production and exploration activities, must be considered in your implementation of SAP BusinessObjects Planning and Consolidation. The implementation challenges not only reside in the development of reports but in balancing the new flexibility available in this environment and the development of a standard design. Using SAP BusinessObjects Planning and Consolidation in an upstream environment not only simplifies having multiple legal reporting formats with the same data, but also allows you to easily manage adjustments in multiple currencies. |
It is not a secret that the oil and gas industry is a challenging environment. Its complexity and volume of financial transactions require a robust and flexible platform to perform financial reporting, consolidation, planning, and budgeting processes. In addition, the complexity of working in different areas of the world requires multiple legal reporting considerations such as US Generally Accepted Accounting Practices (GAAP), International Financial Reporting Standards (IFRS), local GAAPs, joint ventures (JV), mergers and acquisitions (M&A), royalty management, and private equity investments, among others.
For all these reasons, the implementation of a global or corporate platform that can accommodate all the financial needs required to manage commodities makes this effort extremely challenging. I will discuss how the general requirements of an oil and gas company are delivered with the functionality available in SAP BusinessObjects Planning and Consolidation. Initially, I’ll define a general framework of SAP BusinessObjects Planning and Consolidation and why it is important. Then I’ll identify some standard reporting needs of the oil and gas industry for upstream operations, and finally I’ll explore the processes that SAP BusinessObjects Planning and Consolidation can support based on its current reporting and consolidation capabilities.
| Note |
| While I’m focusing on the oil and gas industry, much of the article can be applied to other industries, especially those that are capital- and labor-intensive such as construction, mining, chemicals, and retail. |
Finally, it is important to mention that the successful implementation of SAP BusinessObjects Planning and Consolidation depends not only on technology but also on the business and engineering knowledge of the implementation team. Thus, the implementation team must be able to design, for example, a consolidation environment common to all regions of the world, tax jurisdictions, GAAP, consolidation structure, currencies, and others, without losing the ability of easy reporting and comparison between regions, business units, and companies based on legal and regulatory requirements.
| Note |
| For an overview of SAP BusinessObjects Planning and Consolidation, see the articles “An Introduction to Posting Journal Entries in SAP BusinessObjects Planning and Consolidation,” “Part 1: An Introduction to SAP Business Planning and Consolidation,” and “Part 2: An Introduction to SAP Business Planning and Consolidation,” posted to the Financials Expert knowledgebase in January 2010, October 2008, and January 2009, respectively. |
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