The essential KPIs that your Energy & Natural Resources (E&NR) business needs to measure as they adapt to the pandemic

June 02, 2020

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If you manage a team, there’s a good chance you’ve heard of Key Performance Indicators (KPIs). These measurable values are the means by which your business can demonstrate how effectively they are achieving key objectives and ultimately, success. However, as of March 2020, virtually every line of business has had to establish a brand new set of KPIs to reflect the objectives and goals that were forced to pivot because of the pandemic. It is not uncommon for organizations to adopt a War Room (WR) approach in the time of crisis—a designated group of leaders appointed to manage a massive or urgent project and usually located in a central headquarters—who will establish this new set of KPIs. With COVID-19 continuing to impact business, crucial decisions that will have an impact for years on the business are being discussed in the WR.

Like most industries, Energy & Natural Resources (E&NR) companies are deep into their COVID-19 response mode, and it is more important than ever that they make informed, data driven decisions. Real time access to KPIs is imperative for E&NR organizations which has been further amplified by COVID-19. These include:

  • Cost control vs. budget
  • Cash flow management
  • Asset performance and availability
  • Employee attendance management
  • Revenue forecast with predictive trend analysis
  • Incident management
  • Customer collections
  • Emergency work order resolution

To help ensure performance is on track to achieve goals, the WR established by your E&NR business should be measuring KPIs consistently—every 24-48 hours to be precise. But there are also some essential KPIs that should be part of this measurement:

Executive Chief Officer (EXCO) WR KPIs

At the corporate level, E&NR companies need to know how they are performing in areas such as revenue, Lease Operating Expense (LOE), free cash flow, human capital management (HCM), maintenance, and production. This WR analytics dashboard provides a visual of this information at the corporate level for those joint meetings where everyone needs an all up-vantage point. Knowing how the company is performing day-by-day in contrast to other periods can give a clear indication of how any changes implemented are going to effect results over the next 30-90 day period.

Capital spend WR KPIs (capital projects)

The process of managing Authorization for Expenditure (AFE/AKA Requisition) is essential to your E&NR company, a process that continues after the AFE is approved and the project has begun. The project must constantly be monitored to ensure it is within budget and on track for completion. The capital spend WR analytics provide a quick view into the YTD capital expenditures. Along with the high-level information provided in this WR dashboard, it also allows the user to trigger other analyses to further drill into the information necessary to manage these large capital projects.

Cash flow WR KPIs

The operating cash flow WR analytics helps monitor the financial health of your E&NR company. It provides total revenue, total expenses, and cash flow by region, mine site, country, or project. It also provides a quick view of cash flow performance over the last 12 rolling months in a bar graph. The user can see the top 10 or bottom 10 cash flow performers at a click of the mouse. Since many companies have established steering committees during the pandemic—charged with assessing the numbers associated with revenue loss—this view of top and bottom 10 is especially valuable. Access to this more detailed analysis can show if a specific region, project, or site of operation is underperforming.

Human capital and Health, Safety & Environment (HSE) WR KPIs

Safety is notoriously difficult to track, and it is ever more challenging during this pandemic where we often see skeleton crews working to backfill when other workers are deemed unfit due to quarantine or illness. Workplace safety continues to rise in importance for global CEOs across industries—and rightfully so. After all, an organization’s strategy and implementation of workplace safety programs directly affects its reputation, profitability, and ability to attract and retain talent. Ineffective safety programs can also lead to severe repercussions for those responsible for protecting workers. For example, Canada’s Bill C-45 establishes new legal duties related to workplace health and safety. It imposes serious penalties for violations that result in injuries or death, and assesses criminal liability to corporations, their representatives, and those who direct the work of others, including contractors.

Customer Care & Billing (CC&B) WR KPIs

As we slowly start out on the road to economic recovery, how will utilities companies understand which customers are likely to adopt solar, join micro grids, demand pay-as-you-go plans, or expect their utility to provide in-home energy management? How will they address billing issues given relief measures put in place by government bodies? Questions the EXCO may be asking include:

  • Are we gaining or losing customers?
  • Is revenue going up or down?
  • Are customer complaints on the rise?
  • Are payments coming in on time and what our delinquency rate?
  • Are we responding appropriately to customer contacts and unpaid bills?

Fortunately, technology and analytics have become so advanced and affordable that gaining a full understanding of all customers’ interactions—that can help to protect your revenue and increase customer satisfaction—is no longer out of reach.

Contact our leaders in E&NR for more information.

Stephen Payne, Partner, Consulting, Energy & Natural Resources Leader

Sean Bredin, Business Development Consultant, Advisory, National Mining Leader

Ryan Berkholtz, Business Development Executive, Advisory

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