Looking back at 2018, many companies are comparing projects or jobs, trying to understand what defined the winners and the losers. Cost, profit and margins are undoubtedly pillars when it comes to KPIs, but once you have those numbers, what’s the next step? Where does a profitable job devolve into a money pit? Where can pennies be pinched on a job that’s careening over deadline and budget? Below we’ve highlighted common areas where companies with field operations can find ways to cut costs and gain profit margin. Take a look at the list — there may be a couple areas or all six that jump out at you — ask the tough questions and see which themes start to take shape.
What percentage of your projects were over-time and over-budget? Was there a common cause for delays/cost overages? What internal or external factors appear to have the biggest impact on your budgets and deadlines? Which processes are resistant to setbacks?
The battle to stay on-time and under-budget is never ending. Many factors are unforeseen and beyond your control. However, for companies with field operations, communicating with remote crews is one factor that can be controlled. In this blog we breakdown why information lags eat up profits and how technology is eliminating them, helping you to reach your goals in 2019.
Did you have a way to track your fleet electronically? Were your mobs and de-mobs as efficient as possible? Was the scheduled maintenance performed? Can you easily look at repairs by unit and unit hours to forecast replacement costs in 2019?
Fleet management is one area of operations where efficiencies can often be found without sacrificing production or agility. Click here to explore three ways to capitalize on your most valuable capital assets.
Were you working with documented workflows in 2018? If so, did you see an improvement in training and productivity? Were there processes in place to collect and integrate feedback?
If not, 2019 is definitely your year to at least formally document your workflows. Even better - automate them. Examining your workflows is a great way to find efficiencies and trim wastage. If you need a quick Workflows 101 refresher check this piece out.
What was your average Days to Invoice? Average Days Sales Outstanding? What were your financing costs? Were you able to make the capital investments you planned for with cash or credit?
Billing delays are common with service companies that rely on field operations. While not much can be done with 90-day payment terms, there are ways to get complete bills with backup to your client faster. Check out this article on increasing profits by reducing Days to Invoice.
Were you able to generate the year-end reports you wanted? Do you have a breakdown of labour, equipment and material (LEM) for site or project? Are your 2019 forecasts and budgets based on this data?
So, by this point, you may be thinking, “This sounds good, but I have no way of accessing that information right now”. If your company is paper-based, reports generated from your 2018 operational data will be a long time coming...if they are coming at all. And that’s a shame because your LEM data is absolutely invaluable for identifying strengths, weaknesses and opportunities in 2019. The good news is, it’s never too late to start keeping track. For best practices when it comes to capturing operational data, click here.
Were there any tools, technology or innovations introduced in 2018 that could help your business? What was your competition investing in? Where does your industry seem to be heading?
When it comes to competitive growth, keeping an eye on other players in your field is necessary and strategic. If you noticed that investments in tools or tech has helped the competition pull ahead, it means the time to hesitate is over. Set aside budget for upgrades and new tech now so that you don’t fall even more behind.
Also, finding podcasts and blogs that offer industry insights can help you keep pace with industry changes. You might like this blog we wrote on how tech is shaping the future of E&P in the oil and gas industry. We are also very interested in the potential for A.I. to make an impact for our clients. Check out this short article by Aimsio’s own CEO to get up-to-speed with where to start with artificial intelligence.
If you have questions about the strategies we talked about here or how to compile the data you need to get answers to these questions, shoot us an email. We’d love to help. Or, click the link below to see how our software can help you keep track of your projects and budgets in real-time.