Speeding Up the Payment Process at BHP Billiton Petroleum

Invoicing technology from Quadrem automates manual processes with direct integration to SAP; automatically invoices and supports contract compliance

Invoicing technology from Quadrem automates manual processes with direct integration to SAP; automatically invoices and supports contract compliance

Houston — March 23, 2006 — BHP Billiton Petroleum said it is improving its procure-to-pay process with Quadrem's new electronic invoicing solution for oil and gas upstream services, which is based on the American Petroleum Institute's (API) PIDX standards.

The solution connects directly to BHP Billiton Petroleum's enterprise resource planning (ERP) system, SAP, and enables the oil and gas operator to pay invoices, analyze line level expenditure data, identify price discrepancies and promote purchasing that complies with corporate contracts.

We're dramatically reducing the time it takes our engineers to reconcile invoices without having to make significant changes in our business processes, said Yusuf Dalal, World Drilling Finance Advisor for BHP Billiton Petroleum. Additionally, Quadrem's automatic download to SAP eliminates five to six business days of work at the front-end of the procure-to-pay process. These and other efficiencies, including the time saved using electronic delivery rather than regular mail, are enabling us to make important process improvements and compress payment cycles. Within the first month after implementation, we began to meet the DPO goals we'd set.

BHP Billiton Petroleum began piloting Quadrem's invoicing solution in October with Schlumberger and Halliburton, which were directly integrated end-to-end, and GlobalSantaFe, which utilized a supplier Web portal. After seeing successful results during the pilot phase, BHP Billiton Petroleum is moving forward by working with Quadrem to onboard 75 top suppliers in the Gulf of Mexico. Additionally, the company is evaluating a roll out of the invoicing solution to its operations in Trinidad, the United Kingdom and Australia.

Using Quadrem's solution, suppliers receive orders for services from BHP Billiton Petroleum's SAP system and send invoices through the Quadrem platform, leveraging a central catalogue of approved service items. The invoice is stored in the Quadrem platform and a proforma invoice is sent to BHP Billiton Petroleum. Once the proforma invoice is approved, the Quadrem platform releases the invoice, which is automatically loaded into BHP Billiton Petroleum's SAP system for final payment.

BHP Billiton Petroleum said the resulting efficiency and reduction of errors accelerates its payment approval cycle — a process that traditionally is very inefficient for oil and gas companies because upstream services involve so many variables and approval touch-points both offshore and at centralized purchasing offices.

Other important functionality includes attachments and discrepancy reporting for both planned and unplanned items (e.g. price discrepancies), and an audit trail for all changes, approvals and discrepancies.

BHP Billiton has been an important customer for years on the mining side, and has experience with our ability to deploy effective supply chain solutions globally, said Charles Jackson, Quadrem CEO. As we've expanded our offering to the oil and gas industry, they and their suppliers have been instrumental in helping us resolve the challenges of complex services procurement that are common in oil and gas. We've developed a solution that works with and builds upon BHP Billiton's SAP infrastructure. We're excited about the value delivery here, and we are already exploring the opportunity to replicate BHP Billiton's successes with several like companies.

Quadrem said it works closely with operating companies, oilfield suppliers and third parties, such as Oilfield Suppliers Portal (OFS Portal), to help develop the API PIDX document standards that support energy supply chain processes. OFS Portal, of which Schlumberger and Halliburton are members, is a group of diverse suppliers working together with a non-profit objective to provide electronic data in standardized format to B2B trading partners to facilitate e-commerce in upstream oil and gas products and services.

Additional Articles of Interest

    — Enabling the end-to-end purchase-to-pay process may seem daunting, but the benefits are hard to ignore. Read the best practices article "The Analyst Corner: Payment" by Christopher Sawchuk and Joseph B. Lancaster III of The Hackett Group, in the February/March 2004 issue of Supply & Demand Chain Executive.

    — For more information on the current state of the payment solutions market, see the article "The Analyst Corner: Payment" in the December 2004/January 2005 issue of Supply & Demand Chain Executive.

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