Staying Competitive in the Offshore Industry – The Bid Process

Lee Clarke at Dynama explains how to weather challenges in the offshore industry by using effective workforce optimization to support a successful bid management process.

Since the middle of 2014 the price of a barrel of crude oil dropped from about $115 to less than $30, and thousands of jobs have been lost from the North Sea oil and gas industry alone.[i] These statistics are just a small indication of the devastating impact the global downturn has had on the wider offshore industry. Falling oil and gas prices have created a climate of risk aversion and unprecedented competition that has affected every single link in the supply chain.

International petroleum giants like BP, ExxonMobil, Shell and Total are fighting to control exploration costs and develop new fields while having to forecast output and profitability in a highly volatile market. In turn, this puts increasing pressure on the offshore companies who serve them by contracting out their valuable staff and expensive vessels to execute complex projects on time and on budget. Delivering quality at the right price is the ultimate goal and the race is on to present prospective customers with project bids that promise both in equal measure.

Good visibility, full steam ahead
In a tough business environment how do offshore organizations stay ahead of the game and gain real competitive advantage? The answer lies in their ability to predict accurately the total costs of a project while fully utilizing their own assets profitably. This comes down to having good visibility of what people and resources are available, which is no mean feat when projects are global and the staff executing them are geographically dispersed and operate in different time zones.

Fortunately, the latest Workforce Optimization (WFO) solutions are designed to handle big data. They bring together information into one place including staff and equipment deployment, staff qualifications and competencies, travel plans and documentation, regulatory compliance and timeline management. What is more, they are highly scalable and future-proof. Sophisticated enough to analyze current resource competencies, they can also model for future requirements quickly and efficiently. This makes predicting the specific costs associated with new business bids more accurate.

Make WFO a competitive enabler with the three “C’s”
Let’s take a closer look at the other ways WFO can support staying competitive by managing the process for success at both the tender and execution stages of a project. A modern WFO solution facilitates the three big ‘C’s of capability, compliance and cost control:

• Capability – you might know what people you have available but do they have the right skills to meet the exact requirements of your prospective client? WFO is a centralised platform that interfaces with HR systems and can be used to develop an effective skills matrix.  This captures the knowledge, qualifications and certifications of individual staff members and then matches them against specific job roles to ensure the customer ends up with the right people for their project
• Compliance – it’s not enough to know your staff are available and technically competent, you have to demonstrate that enough of those people with the right skills meet important safety requirements of certification bodies and international regulators. The other benefit of a skills matrix is that it can hold up-to-date training records and certification information as well as identify lapses in training or missing certifications. This enables organizations to build the necessary staff training or re-certification time into their costs and be confident that the project will get off to a smooth start. Discovering your crew don’t have the right certificates or travel documents as they are about to board a vessel could incur costly delays that can run into hundreds of thousands of dollars a day!
• Cost control – historically, project contingencies have grown and project budgets have typically overrun in response to unforeseen expenses to cover skills gaps and sickness, emergency maintenance and repairs or the need to hire more vessels and other equipment. By having clear visibility of all assets, WFO reduces the need for a major contingency cushion meaning contractors can offer far leaner, more commercially attractive pricing to their customers while controlling their own costs more effectively.

Costs present, past and future
To remain competitive offshore organizations need to know and understand exactly what people and resources they have across the world at any given time. Dynamic, real-time information provides clarity and insight into the current availability of all assets while historical data adds to the benefit of hindsight to factor in important calculations relating to unforeseen periods of staff absence or a vessel being out of service. A birds-eye view of both the present and the past is invaluable when costing out future customer projects.

Finally, WFO minimizes many elements of risk associated with large, complex projects:

• Risk management – organizations need to show that the vessels and equipment they are providing are safe to use and that their people are certified and protected to minimize the risk of industrial accidents, significant financial penalties and long-term damage to corporate reputations. The ability of a WFO solution to provide a joined-up approach to availability, competency and compliance management gives offshore organizations a framework they can trust to develop successful bids that minimize risk to themselves and to their customers in a rapidly changing and challenging environment.

Successful bids are built on agility and certainty along with the confidence to grow flexibly while containing costs. Effective workforce optimization has the power to help win the bid process by ensuring you always have the right people and resources at the right price, to stay competitive in the offshore industry.

The Author
Lee Clarke is General Manager US and EMEA at Dynama.