Odfjell Drilling

Preparing the company for growth – from an IT perspective

Mr Tor Tjeldnes, CIO Odfjell Drillingttje@odfjelldrilling.com

Contents

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• About Odfjell Drilling

• Key issues for IT in Odfjell Drilling

• Collaboration – Integrated Operations

• Project Global Standard – implementing IFS and standardizing business processes

– Background

– Evaluation process

– Implementation project – strategy and design principles

– Process & Organization

• Way forward

3

Odfjell Drilling

With operations worldwide and over 40 years of international drilling experience, Odfjell Drilling is an established industry leader and trusted partner for many of the world’s most respected energy businesses. We are proud to be chosen for our experience and expertise.

• An integrated drilling, well service and engineering company with strong international focus and growth

• World-wide operations, engineering and new build project management

• 40 years' experience

• Turnover of approx. USD 1.1 billion (2012)

• 5.7 billion USD contract backlog

• Operations in more than 20 countries

• 50 nationalities are represented among our 3,200 employees

This is Odfjell Drilling

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Business areas

MOBILE UNITS

• Deepsea Atlantic

• Deepsea Bergen

• Deepsea Stavanger

• Deepsea Aberdeen

• Deepsea Metro1

• Deepsea Metro 2

• Island Innovator

• Dalian Developer

PLATFORM DRILLING

• Statoil Norway

• Wintershall Norway

• BP UK

• Talisman Energy UK

• Taqa UK

Our four specialist business areas provide segment-leading expertise - giving customers a unique blend of talented and experienced individuals, alongside advanced technology and operational excellence.

DRILLING TECHNOLOGY

•Project Management

•Drilling Upgrades & Modifications

•Engineering

•Marine Operations

•BOP systems

•Maintenance Technology

•SPS and yard stay

•EPCI

•Technology Improvement

•AoC process

WELL SERVICES

• Casing Services

• Rental Services

• Tubulars

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International presence

Norway

UK

Holland

Romania

Turkmenistan

Saudi Arabia

Brazil

South Korea

The Philippines

Thailand

United Arab Emirates

Tanzania

Angola

USA

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Odfjell Drilling – chosen for experience and expertise

Vision & Mission

Odfjell Drilling shall be a preferred international ultra deepwater and harsh environment drilling contractor. And provider of engineering and project management services for the offshore drilling industry and high quality and innovative well services

Demand for drilling services

Continued high drilling activity on NCS Offshore well E&P spending – world wide

No. wells drilled

Source: The Norwegian Petroloeum Directorate, Rystad Energy (as of [ ] June 2013)

0

50

100

150

200

250

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

Development wells Exploration wells

-

10

20

30

40

50

60

70

80

90

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Well Service Drilling Tools and Commodities

USDbn

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Side 9

Key issues for IT

Some key issues for IT in Odfjell Drilling

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Cost effective business support through

–Standardisation of business processes, systems and technology

–Global sourcing (vendors with global capabilities)

–Collaboration (Integrated Operations – collaboration tools, video, unified communication…)

–Shared services centre in Manila(IT support and other shared services)

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Integrated Operations

Onshore Operations Model

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•Secure continuity between shifts – ensure consistency in operations

•Experience transfer between operations/installations

•Administrative tasks to onshore to release time for increased and continuous focus on HSE and operations for offshore management

•Integrated planning activities onshore (operations and technical maintenance)

•Improve resource utilization by cross training

•Increased focus on bottlenecks & continuous improvements

Benefit: Optimized number of personnel on board - without compromising safety or efficiency

- Decision based organisation onshore, execution based organisation offshore;

Integrated Operations – IT support

• Technological platform achieve effective collaboration

• Collaboration rooms & Operation centers

– Video conference

– FieldView / CCTV / UHF

– Realtime data

– Smartboards

• MS Lync fully integrated

– Chat (quick and informal communication)

– Presence

– Share Data

– Point-to-point video

– Lync-Lync + Lync-Jabber

• Cisco Jabber

– High end video PC client

– Jabber-Jabber, Jabber–Cisco endpoints + Jabber-Lync

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PC basert videokonferanse

MS Lync

Portable videocameras

CCTV

UHF

Video conference

Realtime data

Collaboration rooms

Web camerasPortable cameras

Cisco Jabber

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Project Global Standard

Standard processes

IFS implementation

ERP evaluation

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• Why?

– Alternative to further development of in-house-developed system for purchasing, logistics and maintenance

• Scope

– Initially limited to purchasing, logistics and maintenance

– Evaluation extended to covering Finance and HR after IFS was chosen for purchasing, logistics and maintenance

• Business case

– Process improvement and standardization

– Improved business predictability and control

– Industry standard solution

• Best Practices

• Integrated system - ERP

– Support business growth and internationalization

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Why IFS?

August

CW33 CW34 CW35 CW36 CW37 CW38 CW39 CW40 CW41 CW42 CW43 CW44

4.HR3.Logistics

IFS ASSESSMENT (2012)

2.operations

OctoberSeptember

1. Maintenance5.FI/CO + C&T

1. Maintenance

scenarios

• Equipment

Administration

• PM planning

• Work order

execution

2.Operations scenarios

•Project

•Rotation

•Incidents/Audits(HSE)

3.Logistics scenarios

•Procurement

•Inventory

Management

•Shipment

4.HR scenarios

•Human Resource planning

•Employee administration

•Time and Attendance

Reporting

•Pay roll processing

5.FI/CO scenarios

•Supplier Invoicing

•Fixed assets

•Cost controlling

•Project cost controlling

•Contract Management

5.Cross functional

&Technology

•Document Management

•Replication

•Interfaces

•BI (business intelligence)

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PEOPLE

New way of working is implemented and accepted in the organization

PROCESS

Integrated, standard and efficient processes implemented and fit for global roll-out

SYSTEMS

Systems stabile and user friendly, master data's are standardized and governance model implemented

• Involve key personnel from all BU’s in the design phase to ensure high quality, fit-for-purpose solutions

• Provide good and timely information• Monitor and follow up change process• Train and support new users

• Involve key personnel from all BU’s in the design phase to ensure high quality, fit-for-purpose solutions

• Business Process governance structure to be established in design phase

• All changes outside process and solution standard to be approved by BPO

• All processes to be verified globally and cross business process area

• Involve key personnel from all BU’s in the preparations and execution of testing

• Early decision on master data structure and governance model

• Clean up master data prior to implementation of new system

OBJECTIVES INITIATIVES

Project Strategy

The fundamental design principles for establishing the Global Standard in Odfjell Drilling are:

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Global solution and processes

• Applicable for all locations and operations

• Well functioning offshore as well as onshore

• The system shall be intuitive and easy to use

• Universal definition of roles and “lingo”

• Process roles independent of organizational role

Standardization across locations and operations

• Standard process and solution within process areas

• System set-up and user interface is process oriented

• System controlled process steps• Standardized system setup and

user interface• Common master data structure• All exceptions from standard shall

be approved by BPO

Safe and efficient solutions

• Information entered once and as close to the source as possible (avoid duplication and reduced quality of information)

• Avoid manual work steps• Move from handling of transaction

to planning and control• Total efficiency for Odfjell Drilling

superior to efficiency for back-office functions (hopefully not in conflict)

• In compliance with regulatory bodies within our business

• In compliance with requirements related to segregation of duties

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Process & Organization

High level project plan

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GLOBAL STANDARD

High Level mapping

Detailed mapping

Establish solution (system set-up & configuration)

Masterdatadefinition

Masterdata set-up & clean-up

Organization

Procedures & Guidelines

Transition preparations

Go

liv

eG

o l

ive

TrainingTraining

Support & Maintenance of existing solutions Support & Maintenance of existing solutions

Migration StrategyMigration Strategy

Stabilize processesStabilize

processes

InitiateInitiate

t

Q1/13

INITIATE MAPPING SYSTEM SET-UP & PREPARATION IMPLEMENT STABILIZE

Q3/13 Q1/14 Q3/14 Q4/14

Testing & MigrationTesting & Migration

ORGANIZATION & PROCESS

IT SYSTEM

Roll-out Strategy

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Goal

Main goal: Establish a global standard in Odfjell Drilling on how we do

• Maintenance and asset management

• Procurement

• Logistics

• Rental

• Projects

• Finance

This includes:

- Process description of future work processes

- Establish link between IFS process descriptions and Odfjell Drilling process hierarchy

- Universal role definitions

- Changes in organization � governance model + suggested changes future organization of support functions

- Establish and/or update procedures and guidelines to support the new standard

- Establish governance organization

- Train and prepare our organization

- Benefit realization

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Project Maint. Proc. Logist. RentalHR Finance

Procurement - Procure to Pay

From functional orientation to process orientation…

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HR - Hire to Retire

Maintenance - “Acquire to scrap”

Rental – Order to invoicing

Logistics - Order to consumption

Project Control – Prospect to closure/payment

Master Data Life Cycle

Finance – Budget to Reporting

Income flow – Sales order to payment

T1: Odfjell Drilling

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GLOBAL STANDARD

SCMSCM

SUPPORT PROCESSES SCM

CORE PROCESSES SCM

GOVERNING PROCESSES SCM

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PROCESS & SYSTEM GOVERNANCE

LONG TERM PROCUREMENT

PLAN

DEFINE PROCUREMENT

NEEDS (DAY-TO-DAY)

REQUEST & SELECT VENDOR

FOLLOW-UP PROCUREMENT

VERIFY INVOICE

FA & CONTRACT MANAGEMENT

SUPPLIER MANAGEMENT

GLOBAL SCM STRATEGY & PHILOSOFY

PERFORMANCE & RISK MANAGEMENT

SCM

LONG TERM LOGISTICS PLANNING

CUSTOMS CL GOODS RECEIVEDTRANSIT

WAREHOUSINGWAREHOUSING

GOODS & SERVICE TRANSACTIONS

MASTER DATA ADMINISTRATION

SYSTEM SET-UP AND MAINTENANCE

MATERIAL ADMINISTRATION

PROCEDURES & GUIDELINES

PRO

CU

REM

EN

TLO

GIS

TIC

S

TRANSPOR-TATION

GOVERNING PROCESSES SCM

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PROCESS & SYSTEM GOVERNANCE

FA & CONTRACT MANAGEMENT

SUPPLIER & CATEGORY

MANAGEMENT

GLOBAL SCM STRATEGY & PHILOSOFY

PERFORMANCE & RISK MANAGEMENT

SCM

PROCEDURES & GUIDELINES

Process start-point:• Need for changes in

process and/or system• Need for establishment

of process/system

Main Activities:• Evaluate need for

change• Conclude on global

solution• Conclude on local

adjustments• Update Stream

Process Output:• Governing principles

for process and/or system development

• Conclusions on system/process changes

• Regulations of process execution core and support processes SCM

• Updated Stream process description

Process start-point:• Need for changes in

procedures or guidelines

• Need for establishment of procedures or guidelines

Main Activities:• Evaluate need for

change• Establish procedures or

guidelines• Update CMS

Process Output:• Governing principles

for execution of SCM globally

• Updated procedures in CMS

Process start-point:• Need for new contract

or frame agreement

Main Activities:• Long term planning of

contract and FA establishment

• Plan and prepare• Market screening• Negotiations• Benefit realization• Contract follow-up

Process Output:• New contracts and FA’s• Potential savings of

new contracts

Process start-point:• Procurement needs and

existing/new suppliers

Main Activities:• Categorization of

vendors• Market analyzis• Identification and

selection of vendor/category strategy

• Identify strategic vendors and build relations

• Administrate and follow up procurement categories

Process Output:• Enhanced procurement

power• Clarified strategies per

category• etc

Process start-point:• Need for reviewed SCM

strategy

Main Activities:• SWOT analysis• Spend analysis• Supplier and market

analysis

Process Output:• New SCM strategy

Process start-point:• SCM Strategy• Corporate Strategy and

goals• Process and

transaction information

Main Activities:• Assessment of risks

and opportunities• Establish KPIs• Measure and monitor

KPIs• Perform analysis of

spendt, process performance, etc

Process Output:• Risk awareness and

mitigating actions• Performance indicators• Input to action plans

and

CORE PROCESSES SCM - PROCUREMENT

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Process start-point:• New business events

(project, operation, contract) with procurement requirements

• Long term asset plan• Long term operation

plan• Recurring event

Main Activities:• Identify procurement

and investment needs• Plan procurement and

investment• Select sourcing and

procurement strategy• Initiate procurement

activities long lead items according to strategy

Process Output:• Updated long term

procurement plan• Procurement initiatives

ready for start-up

Process start-point:• Long term procurement

plan• Day-to-day

procurement needs

Main Activities:• Define and clarify

procurement scope• Identify procurement

type• Identify and select

procurement strategy •

Process Output:• Procurement scope

(spesification of goods/services, requirements, category, sourcing strategy, etc)

Process start-point:• Clarified procurement

scope and requirements

Main Activities:• Dependent on

procurement type (single source, FA regulated, tailor made, other)

• Establish requesition• Request proposal from

3+ vendors• Prepare and perform

negotiations• Evaluate and select

vendor• Establish and send PO

Process Output:• PO to vendor• Updated procurement

system

Process start-point:• PO to vendor

Main Activities:• Monitor progress of

delivery from vendor• Monitor quality of

deliverables from vendor

• Monitor shipment status

• Evaluate need for VO• Establish and send VO

to vendor• Update status on PO

Process Output:• Updated PO status• VO

Process start-point:• Goods received

Main Activities:• Verification of invoice

according to PO, VO and goods received

Process Output:• Approved invoice ready

for payment• PO/VO closed

LONG TERM PROCUREMENT

PLAN

DEFINE PROCUREMENT

NEEDS (DAY-TO-DAY)

REQUEST & SELECT VENDOR

FOLLOW-UP PROCUREMENT

VERIFY INVOICE

CORE PROCESSES SCM - LOGISTICS

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Process start-point:• New business events

(project, operation, contract) with need for logistics set-ups

• Long term asset plan• Long term operation

plan (contract status)• Recurring event

Main Activities:• Identify logistics needs• Plan changes and

events in logistics structure and organization

Process Output:• Updated long term

logistics plan• Logistics initiatives

ready for start-up

Process start-point:• Need for transportation

of goods

Main Activities:• Define and clarify

transportation scope• Identify transportation

type• Identify need for

customs clearance • Book and perform

transportation• Perform customs

clearance• Follow up

transportation and report progress

Process Output:• Transportation scope

defined• Goods delivered to

agreed point of delivery

Process start-point:• Goods arrived at

agreed delivery point (where

Main Activities:• Check goods received

according to PO• Inspection of delivered

goods• Register goods

received in IFS

Process Output:• Goods received and

registered

Process start-point:• Goods received

registered

Main Activities:• Update warehouse

location• Perform customs

clearance• Store goods in

warehouse• Pick goods from

warehouse according to

• Update system• Clarify goods for

transportation to warehouse

Process Output:• Goods in location• Goods ready for

delivery to warehouse

Process start-point:• Need for usage of

goods or services• Return of goods to

warehouse

Main Activities:• Print pick-list• Pick up goods from

location• Update system with

transactions• Scrapping• Return to vendor• Return to basestore

Process Output:• Goods consumed• Updated status

inventory

TRANSPOR-TATION &

CUSTOMS CLGOODS RECEIVED

TRANSIT WAREHOUSING

WAREHOUSINGGOODS & SERVICE

TRANSACTIONS

LONG TERM LOGISTICS PLANNING

Process start-point:• Goods received

registere

Main Activities:• Update warehouse

location• Perform customs

clearance• Store goods in

warehouse• Update system

Process Output:• Goods in location• Warehouse information

updated in IFS

CORE PROCESSES SCM - LOGISTICS

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Process start-point:• New items• Updated datas• Changes in item

description• etc

Main Activities:• Register new items• Verification of

consistency in master datas

• Analyse quality and validity in data

Process Output:• Updated master data• QA of master data

Process start-point:• New users• New functionality• Agreed changes

(governance)

Main Activities:• Evaluate urgency• Evaluate need for

external assistance• Evaluate need for

traning of new users• Evaluate need for

establishing a project• Assign tasks• Perform tasks• Inform users about

changes• Update user manuals

Process Output:• Updated system

MASTER DATA ADMINISTRATION

SYSTEM SET-UP AND MAINTENANCE

MATERIAL ADMINISTRATION

Process start-point:• New items• Updated datas• Changes in item

description• etc

Main Activities:• Register new items• Verification of

consistency in master datas

• Analyse quality and validity in data

Process Output:• Updated master data• QA of master data

Methodology alignment

Bridging methodology

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TIER1 – Business Units

TIER2 – Value Chain

TIER3 – Process Landscape

TIER4 – BPMN/Process

=IFS: Application Solution

IFS: Main Process

IFS: Key Solution

IFS: Business Solution

GLOBAL STANDARD

Critical path – alignment between IFS and Odfjell Drilling

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Develop customizations, integrations

Establish platform and application

Establish basic dataConfigure application

Train in application solution

Verify solutionEstablish work instr.

Perform AST

Organize, plan and prepare trainingDefine support process and organization

Define and plan cut-overPerform test migrationDefine and plan change management

Critical path – alignment between IFS and Odfjell Drilling

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Develop customizations, integrations

Establish platform and application

Establish basic dataConfigure application

Train in application solution

Verify solutionEstablish work instr.

Perform AST

Organize, plan and prepare trainingDefine support process and organization

Define and plan cut-overPerform test migrationDefine and plan change management

Design future processesDefine rolesConclude on changes (process/org)

Master data cleaningMaster data structure definition

Master data structure definition

Define roll-out strategy

Def. targetsEst. baseline

Way forward

The way forward

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• Further business process improvements and standardization,

• cooperation with IFS and other companies, e.g. Rotation Planning

• Industry Best Practices

• Mobile solutions hand-held devices, usability improvements for travellers

• Tuning of IT service processes (ITIL based)

• Focus on business and IT architecture

• Further development of our shared services centre in Manila

• And always: Continous cost awareness!

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Thank you for yourattention