Trahan says that a number of mergers defined Diamond's growth from 1990 to 1996 to make the company the largest offshore driller in the world at the time. But with that growth came several complications—for example, the company's software could not track the increased number of legal entities independent of each other on an ongoing basis. Further motivating Diamond to change solutions was the fact that his company's software at that time was not Y2K-compliant—an issue that was just four years away. "Y2K made the decision to switch solutions easier, but the software from Chris Schaefer, Inc., was being pushed well past its capabilities," says Trahan.
Diamond's team began looking at various vendors, including Oracle and SAP. Trahan said while other vendors displayed "fancy stuff," Oracle's team simply focused on the basics. "As it turns out," says Trahan, "Oracle Financials was just superior to everyone else's offering and the right fit for us."
Only recently have oil companies had the technologies to transition from a reactive to a more-predictive business model. According to Heagney, oil companies want to stop the pattern of waiting idly for their 100-horsepower electric motors, which are pumping oil out of the ground nonstop, to simply fail. "How you get ahead of the drill bit is both a common question and a reality in the drilling organization," says Heagney. "In the case of the motor pump, companies are starting to use Oracle analytics tools in combination with sensors placed on these motors to monitor vibration levels that indicate when the unit will fail. Oracle has the tools that allow for sophisticated production processes to pull these analytics together in real time."
Heagney sees smart analytics tools coupled with a robust database as the cornerstone to solving the data management problem. "The need to know what seismic data is available, for instance, and its spatial components must fit properly into a database, otherwise the data can't be located effectively," he says. "Oracle, which has at least 90 percent market penetration of its database product in the oil and gas industry, has done a great job with these complicated data issues to improve the ease of use of its products to develop meaningful business analytics."
Need for a Global Solution
Trahan believes that the cyclical nature of the drilling business, the challenge of managing import rules, and the fact that Diamond's rigs might only be in one place for a limited time require solutions that are portable and capable of realizing a return on investment. Drilling companies often enter a country, drill a well for an oil and gas company, and exit in just a few months.
The lack of an established IT infrastructure to support rigs, which can only be accessed by boat or helicopter, requires flexible solutions that allow for planning and ingenuity to overcome information challenges. "One of the big challenges of managing remote mobile rigs is that they rarely stay put in any one drilling site for more than 90 days," says Trahan. "The operation group needs more help from support groups, including IS [information systems], to get their job done. Unfortunately, we also have fewer resources at our disposal to help in some remote locations around the world."
Because Diamond is a global organization that routinely moves rigs between countries, Oracle Financial's Multiple Reporting Currencies feature, which handles currency conversion rates and can translate a purchase order from one currency to another and still report everything in U.S. dollars, was invaluable to Diamond's business needs. "When you move a rig between any two countries or purchase items in multiple countries for a rig, Oracle's ability to handle multiple currencies and automatically roll up to U.S. dollars in our books brings great value to us," says Trahan. "The local operation reports in their currency and we report in U.S. dollars, even if the item was purchased in a third currency."