Schlumberger Accelerates Requisition and Approval Cycles with Commerce One

With operations in over 100 countries, Schlumberger is a global tech-

nology services company of 59,000 employees that had annual revenue

totaling more than $11 billion in 1998. To maintain its position as

an industry leader in technical innovation, the company has long been committed

to the integration of intelligent, new technology services to maximize work

efforts, lower overall spending, and leverage a competitive edge for future

global growth.

As procurement process leader for Schlumberger Oilfield Services—the largest

business division of Schlumberger and the leading supplier of services and tech-

nology to the international petroleum industry—Alain-Michel Diamant-Berger

asserts that the Commerce One® Commerce Chain™ Solution—comprised of

Commerce One BuySite® Desktop Commerce Application and Commerce One

MarketSite™ Open Marketplace Platform—has helped to optimize procurement

management by automating and speeding the shipment of specialized supplies

to remote oilfields around the world. With BuySite, Schlumberger now hosts a

convenient, Web-based purchasing environment that guarantees on-time delivery

of vital technical equipment.

Commerce One Commerce Chain Solution AutomatesPurchasing for Leading Global Technology Company

Executive SummaryChallenges● Uniting disparate systems in order to save time, money, and manpower● Implementing a cost-effective electronic supply catalog● Enabling an automated procurement application that could integrate with

existing SAP ERP systems

Solution● Commerce One Commerce Chain Solution, comprised of Commerce

One BuySite Desktop Commerce Application and Commerce OneMarketSite Open Marketplace Platform

Benefits● Reduction of manual workload and elimination of procurement paper trails● Facilitation of real-time requisition and approval processes● Ability to smoothly integrate with SAP interface for enterprise-wide use

CUSTOMER PROFILE

Schlumberger Digs for anAutomated Procurement AnswerWith oilfield operations scattered around

the globe and frequently in extremely

remote regions, Oilfield Services crews

often experienced problems obtaining

specialized supplies. Highly technical

equipment and spare parts were not

available locally, and only a very tedious,

manual, and paper-driven ordering

process existed. “Even if a site had some

sort of electronic application, the overall

system was not automated,” adds

Diamant-Berger. “Across the enterprise,

systems were disjointed and point-to-

point electronic communication was

poor and limited. Whether paper or elec-

tronic, purchase orders would end up

passing through multiple hands before

even reaching the department that could

actually supply and ship the required

equipment. The entire process required

far too much manual labor and was cost-

ing the company both time and money.”

Schlumberger Strikes a Deal WithCommerce OneIn 1997, a Schlumberger team launched

an investigation to find an enterprise-

strength automated procurement system.

“Our vision,” explains Diamant-Berger,

“was to implement an up-to-date

application that would first give us an

electronic catalog—from which we

could easily create and submit requi-

sitions—and then, in time, enable the

entire corporation with an automated

procurement program.”

One of the team’s primary concerns

was finding a solution that could satisfy

the needs for all product lines in all

divisions of the company. The managers

not only wanted to solve the Oilfield

Services division’s requisition dilemma,

but also, in looking for a big picture

solution, they needed to ensure that the

chosen system could integrate with the

company’s existing SAP ERP system—

which would mark a second implemen-

tation phase. “Many of the systems we

reviewed simply could not fulfill all of

our functionality requirements,” con-

tinues Diamant-Berger. “For example,

after reviewing several different procure-

ment solutions, we selected a preliminary

partner and began a six-month imple-

mentation study. However, in that time,

our team concluded that although this

particular system was a possible fit, it

still failed to meet all qualifying factors.”

In the fourth quarter of 1998, after

reassessing total needs, the company

reopened discussions with several other

possible solution partners. “We presented

a complete company requirements list,”

says Diamant-Berger. “Commerce One,

who happened to be a newcomer on

our list, was the first to show us a fully

adequate and adaptable system. It would

not only provide us with a Web-based,

electronic supply catalog, but it would

also provide an approved SAP interface.

BuySite catered perfectly to all of our

needs. Commerce One made us a good

proposition that was approved by our

management after careful review.”

Fast and Easy ImplementationDraws Enterprise-Wide InterestThe project began in January 1999.

In April, as per plan, Commerce One

installed the first version of BuySite 5.0 on

a test server. At that time, Schlumberger

had selected Aberdeen, Scotland as the

first pilot site because all Oilfield Services

product lines were active there, it had a

significant volume of local purchases,

and it was not yet connected to the

enterprise SAP system. Within less than

five months from the program start date,

in May 1999, the Aberdeen site went live.

“The initial implementation phase

went extremely well and was right on

schedule with what we had expected.

With the customized BuySite application,

we easily accomplished our number

one objective of replacing the existing

electronic system for two product lines,”

states Diamant-Berger. “Now, with even

more pilot sites active on the system—

representative of 16 user groups and

located in the United Arab Emirates,

Thailand, China, and Mexico—we are

working toward commencing the second

“Commerce One...was the first to show us a fully adequate and adaptable system. It

would not only provide us with a Web-based, electronic supply catalog, but it would also

provide an approved SAP interface. BuySite catered perfectly to all of our needs.”

—Alain-Michel Diamant-Berger, Procurement Process Leader, Schlumberger Oilfield Services

phase of the project. This will entail

bringing more product lines and suppliers

online as well as integrating with the

enterprise SAP system. By the end of the

summer, we will use MarketSite.net—

Commerce One’s open business-to-

business marketplace—in order to connect

us to outside suppliers. We estimate having

30 suppliers hooked up by summer’s

end with future projections for an overall

system of 100 to 200 suppliers.”

MarketSite, the extranet portion

of the Commerce One solution, auto-

mates user interactions with external

suppliers and provides for the seamless

exchange of supply information through

MarketSite.net—its interoperable mar-

ketplace portal. By leveraging MarketSite’s

open XML architecture, employees can

directly access suppliers’ inventory

management systems and receive real-

time responses on products, pricing,

and availability.

“With the BuySite project well under-

way in the Oilfield Services division,

other groups are beginning to look at it

with interest,” says Diamant-Berger. “We

have already been contacted by several

other division managers wanting to join

the project.”

Electronic Catalog SpeedsProcurement TransactionsWith BuySite’s Internet-based product

catalog, Schlumberger end users can

now browse product lines, choose best-

value items, create requisitions, and

obtain manager approval—all easily and

electronically. Duplications in manpower

efforts and order-to-fulfillment cycle

times have decreased significantly as

requisitions are turned automatically

into purchase orders for the internal

Schlumberger supplier base.

BuySite helps divisions better assess

inventory and predetermine supply needs

in order to avoid shipment and delivery

delays caused by last-minute orders. The

end-to-end internal procurement process

brings a tighter focus to inventory stra-

tegy and supply chain management.

“Commerce One has enabled us to

do everything we wanted and expected,”

says Diamant-Berger. “BuySite has proven

to unite disparate procurement systems,

eliminate paper trails, and speed the

delivery of supply shipments to remote

oilfield sites. We have truly succeeded

with BuySite to automate our internal

procurement process.”

Buysite’s Intuitive InterfaceEncourages UseTo drive maximum participation in a

large enterprise’s procurement process,

BuySite enables users with a compre-

hensive set of purchasing services at

their desktops. Users have easy access to

a robust electronic catalog for fulfilling

their purchasing needs. The intuitive

system encourages users with its elimi-

nation of tedious paperwork and its

ability to get products to employees in

record time. BuySite takes the hassle

out of the requisition approval process.

Users no longer have to physically seek

out managers for approval signatures,

moving the overall organization of the

procurement process closer to real-

time response.

“What we have seen is that our em-

ployees appreciate the user-friendliness

of the BuySite application—especially

compared to their previous experiences.

Because it is quick and fully electronic,

“Commerce One has enabled us to do everything we wanted and expected. BuySite has

proven to unite disparate procurement systems, eliminate paper trails, and speed the

delivery of supply shipments to remote oilfield sites.We have truly succeeded with BuySite

to automate our internal procurement process.”

—Alain-Michel Diamant-Berger, Procurement Process Leader, Schlumberger Oilfield Services

©1999 Commerce One, Inc. Commerce One,Commerce Chain, BuySite, MarketSite,MarketSite.net, Marketplace Portal, andDesktop Commerce are either trademarksor registered trademarks of Commerce One.Other product or company names mentionedherein may be the trademarks of theirrespective owners.

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more people are willing to use it. They

realize it is not only more convenient

for them, but it is better business for

everyone,” says Diamant-Berger.

Schlumberger Expects SmoothSAP IntegrationIn particular, Commerce One’s ability

to integrate and upgrade with an exist-

ing SAP system was one of the key

Schlumberger requirements. According

to Diamant-Berger, “If Commerce One

had not been an approved SAP interface

provider, we would not have even con-

sidered the BuySite solution. And, as

BuySite has met all other expectations,

we anticipate a smooth integration

with our existing SAP system.”

Buysite Offers Only Good Surprises“No other company could deliver all of

our functionality requirements. We see

everything that we expected to see and

more. There were no bad surprises—only

good ones. For example, Commerce One

was able to accommodate changes to our

initial plan by customizing its standard

product to meet our international needs.

This was extremely gratifying,” expresses

Diamant-Berger. “With the success of the

initial implementation phase, we are

now looking to expand the original scope

of the project, and we anticipate other

divisions eventually signing on to the

Commerce One system.”

“The return-on-investment equation

is simple, and as we expand the use of

BuySite throughout the organization,

we expect to see continued cost savings,”

adds Diamant-Berger. “Because BuySite

decreases manual labor overlaps and

increases procurement efficiency, valu-

able time is made available for concen-

trating on bigger issues. Schlumberger

work crews can focus less on supply

chain dilemmas and more on the core

business functions of getting oil and gas

to customers. To say the least, BuySite

serves the bottom line of helping us to

better serve our customers.”

Commerce One (NASDAQ: CMRC) is aleading provider of electronic commercesolutions that dynamically link buying andsupplying organizations into real-time tradingcommunities.The Commerce Chain Solutionby Commerce One, comprised of CommerceOne BuySite and Commerce One MarketSite,enables companies to significantly reduceoperational costs and increase efficiencyby automating the entire indirect goods andservices supply chain.As a result, enterpriseorganizations are able to realize a strategiccompetitive advantage as well as a rapidreturn on investment.