SWN Program Management Case Study
Company Overview
Headquartered in Houston, Texas, Southwestern Energy Company (“Southwestern Energy”) is the second largest producer of natural gas and natural gas liquids in the United States. A growing, publicly traded, energy company, their operations span across Appalachia and Louisiana. To support expanding operations and institute a robust foundation for future growth, Southwestern Energy leveraged the expertise and methodologies of EAG to select and implement a new Enterprise Resource Planning (ERP) tool. The change objective was to improve data quality, data access, information malleability and processes enterprise-wide (land administration, division order, AFE management, supply chain, cost accounting, production accounting, revenue distribution, regulatory reporting, financial accounting, reserves, drilling, completion and operational data analytics).
Between 2022 and 2024, what began as an initial in-depth software selection process, grew into a comprehensive initiative involving 11 sub-projects impacting corporate, operational and IT functions. This marked a significant program management effort led by EAG, coordinating activities across over 100 client, software vendor and EAG team members.
Background & Challenges
Prior to 2022, Southwestern Energy relied on multiple heavily customized software applications requiring costly in-house support and development resources. While this solution, originally installed in 2012, initially served the company well, it presented considerable challenges during upgrades, as new business requirements emerged, and during acquisitions.
In 2017, Southwestern Energy worked to upgrade their core application to a new version of the software. Unfortunately, due to extensive customizations, the project was ultimately shelved given the number of risks, complexities involved, and cost of the project. Subsequent software rationalization processes in 2018 and 2020, each led by different consulting firms, resulted in recommendations to implement a new solution, but Southwestern Energy was constrained by conflicting priorities.
However, these recommendations drove home the need for change. More importantly, these assessments highlighted issues beyond the ERP solution such as the fragility of workflows across departments, data issues between systems, reporting inefficiencies, complex workarounds, and reliance by team members on institutional knowledge which could be easily lost. Management also noticed that integrating acquisitions into the legacy solution required significant manual efforts across teams.
EAG’s Approach & Solution
In 2022, EAG was engaged to conduct a comprehensive software evaluation project. Over four months, EAG facilitated the evaluation of three mid-tier, upstream energy focused applications. Through detailed walkthroughs, EAG augmented their proprietary ERP business requirements with Southwestern Energy’s unique requirements, creating a client-specific list of 6,000 business requirements to guide the evaluation process.
A unique request was Southwestern Energy’s overarching desire to implement a fully integrated platform with a consistent data model to support Accounting, Land Administration and Production Accounting.
Each ERP candidate system was evaluated on its capacity to meet the defined business requirements by client subject matter experts. EAG’s unique and proven evaluation methodology culminated in a well-informed recommendation which referenced the qualitative and quantitative information gained throughout the process. Based on the findings and the company’s preference for a single, consistent platform, Southwestern Energy ultimately selected Enertia Software (“Enertia”) as their new ERP solution.
However, there were some gaps with Enertia’s “out of the box” revenue allocation solution and land module which caused management concern. EAG facilitated detailed design sessions with Enertia and Southwestern Energy leveraging EAG, Enertia, and Southwestern Energy subject matter experts to develop detailed functional designs to address the critical system gaps. Together the teams designed an enhanced allocation solution to specifically and fully address the complexities of Southwestern Energy’s liquids allocations and to support their land broker needs. Once these designs were incorporated into the licensing agreement and delivery dates set, Southwestern Energy was ready to move forward, confident that Enertia could meet their current and future business needs.
“EAG was foundational to delivering on-time and on-budget an ERP that was effective in meeting SWN’s unique needs due to its complex multi-hydrocarbon production business and stringent data quality, access speed and analysis requirements from both finance and operations. Their ability to marry their extensive industry and system expertise with an attuned ear for what SWN needed differentiated EAG from competing, larger, more generic ERP consultants,” observed Carl Giesler, Jr., SWN’s EVP and CFO
Implementation
EAG was selected to lead the Enertia Software implementation and associated sub-projects. Southwestern Energy trusted EAG to successfully complete this complex engagement due to the company’s 20-year experience implementing Enertia, positive working relationship with Enertia, program management and implementation methodologies, practical approach to Change Management, and positive references. Ultimately, EAG led the following parallel workstreams through to completion:
- Enertia Software ERP implementation
- M-Files document and workflow management implementation
- Enverus procurement and electronic invoicing functionality expansion and enhancement
- Self-assess tax software solution implementation
- Expense management platform implementation
- Design, Development and implementation of interfaces and Power BI reporting
In summary, EAG’s experience, dedication and transparency led to a trusted relationship between all stakeholders throughout this engagement.
“EAG delivered SWN the ability to process all business from payroll to invoice payments and from production volumes to revenue distribution while significantly improving the quality of our financial and operational reporting within a single SaaS solution on time and on budget,” said Colin O’Beirne, SWN VP of Accounting and Controller.
Outcome & Benefits
The implementation of an integrated ERP drastically improved processes, reporting and data access and malleability across the organization (both finance and operations) while at the same time lowering the number of required SOX compliance control points by processing more through the system than through manual uploads and other external means. The extensive out-of-the-box configurability of the Enertia system reduced the need for manual processes and additional software solutions, easing the long-term burden on IT for administration, upgrades, and maintenance. Users felt more empowered, and data sourcing issues were resolved as part of this transformation. The company is now equipped for growth and adaptable for future business opportunities. Cross-functional business processes are synchronized and disjointed data issues have been resolved.
Additionally, EAG’s efforts led to the consolidation and replacement of 1,700 reports, eliminating duplications and streamlining information gathering processes. This transformative journey was a monumental team effort involving EAG, Enertia, Southwestern Energy management and end users, setting the stage for Southwestern Energy’s continued success in the energy sector.