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Knowledge process outsourcing, viable for oil and gas?

Thursday, September 3, 2015

We all understand that it is possible to outsource simple tasks to lower cost countries and save money, but companies usually think that tasks involving more knowledge work are better kept in-house. Simon Bates of DDC Group believes outsourcing knowledge work is also worth considering.

Outsourcing work to a lower cost country is normally only considered for simple, routine tasks. But some companies are outsource more knowledge intensive tasks as well, said Simon Bates, project manager and advisor with outsourcing company DDC Group, speaking at the Finding Petroleum forum on June 5 2015, 'Cost Reduction in This Era'.

The term 'knowledge process outsourcing' (KPO) is used when the outsource workers are developing and using specialist knowledge as part of their work, he said.

Examples of more knowledge intensive work that can be outsourced are research, indexing, compliance checking, data collection, management and cleansing, he said.

Meanwhile you keep all your company's core expertise and creative work at home, he said.

The cost of doing outsourced work is typically 30 to 75 per cent of doing it in-house, he said.

'KPO doesn't directly solve industry problems, but it does have a significant impact on operational cost and ability to do new things,' he said. 'It releases time for in house experts to do more on what drives the business forward.'

As part of the process of outsourcing, you can also re-organise the way the task is done, he said.

And of course you won't need to provide office space, training and employment benefits for your own staff, he said.

Examples of KPO

DDC offers a KPO service for an oil and gas drilling service company.

This company receives reports about drilling bit performance, provided in many different data formats, often including different acronyms in the text.

They are not easy to enter into a computer, but it is vital that the data in them is kept, to keep track of how different bits perform and what has been used in each well. The data is also important for future sales.

Before working with DDC, the company would usually input reports into the database selectively and do it in a rush job. There would be a stack of reports with the data never captured.

Converting a report sent from someone around the world (perhaps also in a rush) into a standard structured format is not good use of an engineer's time or mental energy. It is not particularly difficult work but not very rewarding either.

Now the reports are sent daily to a Knowledge Process Outsourcing (KPO) team in the Philippines, via a secure server. They are transcribed and input into the central knowledge database with a guarantee of accuracy and short turnaround time. 'Nothing gets left aside or rushed,' he said.

If something is missing from the data, or doesn't seem to match, the outsourcing company staff can contact the person who sent the report and request further information.

'They are applying a great deal of understanding to the process, which they receive through training from the customer,' he said.

DDC also works with publishing company Elsevier, to check and index medical research papers before they are added to its 'Embase' database, and check and index geological papers for its 'Geobase' database.

For the work on the Embase medical database, DDC Group employs around 40-50 people with medical expertise (some of which are doctors), to index peer reviewed articles. 'This team's job is to read through concepts within the articles and then index or apply index terms to the articles so when they are made available from the publisher's website they can be retrieved by global industry professionals,' Mr Bates said.

For the work on Geobase, the geological database, DCC has recruited a team of engineers and people with geological background to index articles.

To consider the technical expertise required to check technical papers should answer concerns that 'outsourcing cannot be done with technical complex niche tasks,' he said.

The service is also offered to a US freight company, where the knowledge team provide document compliance checking services.

Other work which could be outsourced include paper document scanning (including well logs) and digitisation, which could be done by a team of geophysicists, who would know (for example) how to get the projection right.

You could also outsource personal assistance. 'An engineer could say, I spend half my time pulling together data from various sources before I can even start to do my job!'" The natural answer is to get a research assistant. But it doesn't have to be someone sitting next to you,' Mr Bates said.

'The assistant can communicate with the engineer, the engineer is able to train them.'

You could outsource data analytics tasks, which can be better performed by someone objective rather than in-house experts who might already have expectations of what results they will see.

Setting it up

The pathway of setting up outsourcing starts by working out which tasks you want to outsource and documenting how the tasks should be done. The outsourcing company can provide assistance with this.

When it comes to the level of guidance given by clients, 'some businesses can come to us with a manual already written, some customers come to us with nothing, and say, 'this is what we do, can you help,'' Mr Bates said.

'I've been involved in teasing out information so I can write instructions to get the process going, which we then refine over time,' he said.

The KPO company finds suitable people, trains them and sets up the software systems to do the work. This is followed by testing and piloting until everybody is happy.

KPO solutions can have anything from one person to thousands, he said.

Companies continue as they have done before, but technical data capture is given to an outsourced team.



Associated Companies
» DDC Group
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