Oracle Application Management Case Study

Upgrade Keeps Hercules Offshore a Well-Oiled Machine (Cont'd)

About Hercules Offshore

Hercules Offshore Facts

Business Needs

Upgrade to Oracle E-Business Suite R12

Networking Solution

Consultation, project management and application development and hosting of ERP solution

Business Value

Enterprise software upgrade improves key applications without burdening IT staff

Industry Focus

Oil and Energy

Size

2,300 employees

Headquartered in Houston, Texas, Hercules Offshore serves the oil and gas industry with the largest fleet of mobile drilling platforms in the U.S. Gulf of Mexico, and the fourth largest in the world. The company’s jackup rigs, liftboats and inland barges are used for oil and gas exploration, drilling and related maintenance tasks. Hercules Offshore operates in key oil producing sites across the globe, including Saudi Arabia, Indonesia, and Nigeria.

Situation

Daily business operations at Hercules Offshore require precision control, global management and careful integration of both on-rig and in-office processes. The company uses the Oracle® E-Business Suite to manage the bulk of its business operations, from payroll to purchase orders. When Oracle released an updated R12 version of the application, Hercules Offshore was faced with a need to upgrade. The company had customized the original Oracle applications to suit its complex and specialized work processes. It needed to transfer those customizations to the new version without disruption to its business – and do so well before its fiscal year ended.

Solution

Hercules Offshore chose AT&T Hosting & Application Services to help with its Oracle upgrade project. A dedicated AT&T team provided consulting, project management and application development to verify the continued functionality of Hercules Offshore’s specially configured Oracle applications. AT&T was also able to maximize some new Oracle features to streamline key financial applications. The upgrade was completed in under six months and is hosted in an AT&T Internet Data Center.

An Agile Giant

Hercules Offshore provides shallow-water drilling and support services to the oil and gas industry. The company serves national oil and gas companies, major integrated energy companies and natural gas operators.

When a rig is not working, it’s not making money so we really have to make sure that we are issuing and receiving purchase orders in a timely manner.”

Susan Richard, Operations Controller, Hercules Offshore

Shallow-water drilling involves costly, massive equipment working in sometimes unpredictable coastal water conditions. Hercules Offshore’s array of equipment includes 39 jackup rigs, two submersible rigs, 63 liftboats and 16 inland barges. Operating in water ranging from ten to 350 feet deep, jackup rigs are huge, mobile, self-elevating platforms supported by four legs that push themselves into the sea floor. The rigs then raise the hull above the waves to serve as a work platform. These complex vessels require strict oversight and routine inspection. Even the smaller inland barges are “like a floating hotel,” said Susan Richard, Operations Controller.

Hercules Offshore operates worldwide under contracts ranging from six months to three years. “The rigs are always moving,” Richard said. The company is currently operating rigs and liftboats in Saudi Arabia and other Middle Eastern nations, West Africa, and Indonesia, and has also conducted operations in Mexico, Malaysia, and India.

Administrative Complexity

From staffing and regulatory compliance to equipment maintenance and fleet management, daily business operations at Hercules Offshore require extensive administrative coordination. The company oversees dozens of assets and multiple contracts. Rig operation and maintenance requires hundreds of purchase orders to be created, communicated, tracked and fulfilled. “When a rig is not working, it’s not making money,” said Richard, “so we really have to make sure that we are issuing and receiving purchase orders in a timely manner.” The company uses Oracle E-Business Suite to manage multiple administrative tasks, including finances, HR, payroll, maintenance, costing and project management.

When Oracle rolled out the latest R12 version of its software, it began phasing out support for the old version and urging customers to upgrade by 2014. For Hercules Offshore, the R12 upgrade would be a big undertaking. “An Oracle ERP upgrade is not an easy task,” said Salman Riaz, Director of Information Technology. “I’ve talked to some companies who actually had to do this twice because their first implementation failed.”

Complicating the usual upgrade concerns, Hercules Offshore had made significant customizations to several of its original Oracle applications – for instance, tailoring screens for on-rig processes such as scheduling maintenance and purchasing parts. The company wanted to stick with those configurations. “We were happy with our modifications, so we were a little nervous that with the upgrade something might break,” Richard said.

Hercules Offshore didn’t have the resources required to perform the upgrade in-house. The company’s internal IT staff, made up of just 14 people, already had its hands full. In addition, Hercules Offshore wanted to complete the upgrade rapidly, to avoid interfering with its annual bookkeeping and to beat the rush of companies upgrading in 2013.

New But Known

After a year of planning, Hercules Offshore conducted a thorough search and chose AT&T to perform the upgrade. As an AT&T hosting client since 2008, Hercules Offshore trusted the company’s ability to expertly and cost-effectively support its enterprise applications. “We were comfortable that AT&T certainly had the people to do the job, and the price was better than everybody else,” said Richard. As an Oracle Platinum Partner, AT&T has extensive product knowledge and experience. “It was a win-win deal for us,” Riaz added.

AT&T Hosting & Application Services provided project management, consulting, application development and configuration. Every one of Hercules Offshore’s Oracle applications needed to be upgraded. The AT&T team had to verify the customizations done in the old version worked in the new version. Some customizations required significant development. AT&T was able to make it work.

AT&T conducted extensive testing throughout the upgrade process, building three different test environments before going to production. For the second test session, Hercules Offshore brought in all of its country controllers, providing an opportunity for direct feedback and to verify nothing was missed. Even with all of this, AT&T was able to complete what normally takes nine to 12 months in under six months. “We got the upgrade done on time, on target and under budget,” Riaz said.

The Upgrade Pays Off

With support from AT&T, the upgrade’s impact surpassed Hercules Offshore’s expectations. “We just wanted what we had to continue to work.” said Richard. From user-friendly screen design to application control, things are working better.

The upgrade streamlines some key processes, including the company’s accounts payable. The new Multi-organization Access Control capability simplifies work and speeds operational activities. Instead of signing in and out of different sub-accounts to pay from different banks, staff can now log in once and work with multiple accounts while maintaining security between them. This eliminates the wasted time and potential for error of unnecessary security processes.“

AT&T hosts the servers in its state-of-the-art AT&T data centers. Managed Applications Services are SSAE 16/ISAE 3402 Type II audited. “A third party comes in and evaluates all their processes to make sure everything is up to par,” Riaz explained. “That really helps us out.” Data back-up to two different locations verifies data recovery in case of a disaster. Outsourced hosting also frees up Hercules Offshore’s internal IT resources who can focus on operational issues instead of the day-to-day details of running a data center.

Global Coordination

AT&T has the right resources and strategies in place to verify a successful upgrade. With a team of 20 to 25 developers and database administrators working on- and off-site under a dedicated point-person, communication between Hercules Offshore and AT&T was streamlined. “It definitely coordinates better that way,” said Richard. “Our AT&T representative was great about keeping things moving and resolving issues.” AT&T provided a project manager and functional staff onsite, while the technical teams worked from India. “They did an awesome job,” Riaz said.

As Hercules Offshore continues to expand its services globally, its AT&T-supported Oracle upgrade enables country-specific modifications, as necessary. The company can better address local concerns while achieving global integration. With support from AT&T, Hercules Offshore was able to add payroll specifically for Saudi Arabia.

The global reach of AT&T was key for creating the Saudi payroll solution. “This is something that nobody has implemented throughout the industry,” explained Riaz. “AT&T had the internal expertise to handle the payroll process for the Middle East.” AT&T even visited Hercules Offshore’s Saudi Arabia office to make sure everything was working properly.

Having upgraded to R12 with expert help, Hercules Offshore stays ahead of the game. When Riaz told industry friends about the upgrade, “they were very, very impressed.” Riaz continued, “I am proud that we made that decision to work with AT&T.” With a successful implementation, the company maintains a steady and efficient flow in its business operations.

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