What is a Smart Contract?
Smart Contracts are digital, self-executing agreements based on contractual 'paper' agreement. Built on private permissioned blockchains, they are connected to field data sources and business processes.
The Smart Contract autonomously validates and executes contract conditions ensuring efficiency, accuracy, and fostering trust with a transparent transaction record - all visible within a tailored visualization.
Incentivize Operational Excellence
​
Smart Contracts automate advanced contract objectives without added complexity. This enables 'win-win' agreements that better align contract parties and drive performance.
​
​
Payments Processing Efficiency
​
Smart Contracts automate ticket & invoice creation, streamlining payments and reducing errors & disputes. This results in reduced processing cost and the option for faster payment cycles.
​
​
Transparency & Trust
​
Shared platform allows all contract parties to have visibility on the agreed source of truth. This ensures accountability and fosters trust in the data - minimizing disputes and simplifying the contract revision process.
How can a Smart Contract help me?
Anatomy of a Smart Contract
A permissioned blockchain environment ingests external data sources and hosts the Smart Contract workflow.
​
Contract specific dashboards present contract execution status in real time to all stakeholders. Historical audit records are available to each stakeholder independently.
​
Contract results and associated data integrate with existing business processes via automated APIs or custom exports e.g. automated emails, .pdf files, etc.
Typically a Smart Contract deployment involves a primary client and one or more contract participants. SCS will work closely with all parties throughout every step listed below.
​
SCS's objective is to deliver near term value with minimal impact to business operations. This means focusing 'small' and moving fast. Additional value is captured incrementally through additional Smart Contracts and integrations.
Building a Smart Contract
Identify Opportunity
What objectives need to be better incentivized?
-
Does the existing arrangement undermines performance or create excessive burden?
​
Example pain points by contract model:
Day Rate
-
Completing a task ahead of schedule creates savings for the operator but results in less money for the contractor
Crew & Contractor Bonus / Malus
-
Complex workflows often lead to delays, this separates the bonus from the behavior being rewarded
-
Manual calculation and tracking creates additional cost and can lead to mistakes and disputes
-
Overly simplistic metrics or obsolete targets can often 'normalize' bonuses or incentivize the wrong behaviors
Inventory Consumption & Cost+:
-
Contractor is not directly incentivized to provide efficiency or savings to the operator
Develop Solution
The key to achieving low-cost, near term value is identifying the right opportunity and defining a 'balanced' solution based on the four elements below:
Existing Contract Terms
-
Lower impact on existing operations
-
Minimize operational 'hurdles'
-
Terminology must be defined
-
May be difficult or impossible to digitize
Deployment Strategy
-
Aim small deliver fast
-
Involve data suppliers early
-
Engage contract participants regularly
-
Deploy changes incrementally
New Contract Terms
-
More targeted incentivization
-
Generally easier to build
-
Stronger consensus required
-
Restrictions on changing existing contract
Data Accessibility
-
Automated feeds are preferable
-
Manual inputs & files are possible
-
Deemed trustworthy by all parties
-
'Perfect' data is not critical
Define Contract Workflow
Contract metrics can be broken down by objective category and measurement method, see examples listed below:
QHSE &
Personnel
Operations
Emissions
Digital Deliverables
Discrete
Normalized
Comparative
Procedural Adherence
-
# HSE incidents
-
# Personnel-on-Board
-
Total NPT hours
-
Average ROP
-
Total footage
-
Average connection time
-
Casing run time
-
Average fuel consumption
-
# of deliveries
-
Total emissions
-
# of files delivered
-
Delivered on time
-
Personnel-on-board vs IADC operation
-
NPT per foot
-
ROP per formation / region
-
Total footage vs days on well
-
Run hours vs footage
-
Cement time vs volume
-
Fuel consumption per IADC activity code
-
Energy cosumed per foot
-
Data Quality score (gaps, completeness, etc.)
-
POB vs fleet average
-
NPT hours vs rolling average
-
Rate of NPT improvement
-
Trip speed vs rolling average
-
Performance consistency vs rolling average
-
Performance vs plan
-
Fuel usage vs fleet average
-
# Deliveries vs rolling average
-
Energy per activity over time
-
Data quality score vs collective rolling average
-
Certification compliance
-
Safety reporting
-
POB compliance
-
Go-to-bottom procedure adherence
-
Sliding / Downlinking
-
Shock & vibration limits
-
Fuel consumed vs plan
-
Shipments vs plan
-
Emissions certifications
-
Delivery procedure compliance
Contract-specific workflows are created to define how incoming data will be processed and terms calculated within the Smart Contract.
Diagrams are included as part of the service documentation.
Access Data
Our philosophy is simple: if the data can be digitized, standardized, and agreed upon - it can power a smart contract.
Operations Reporting Systems
Vital for well construction operations, these systems offer insights into daily activities on the rig and are integral to automating contracts related to on-site services.
Control Systems / Edge Data
Leverage data from field sensors and SCADA systems. This includes accessing on-site tank volumes and Electronic Data Recorder (EDR) service providers.
Workforce Management Systems
By integrating data from HR systems, we manage and streamline contracts related to personnel, including labor hours, roles, and related costs, which are critical for HSE & operations objectives.
Field Ticketing Solutions
Digital ticketing captures essential data for payments and services, such as line items, locations, and time logs, facilitating accurate invoicing.
Enterprise Resource Planning (ERP) Systems
These systems provide crucial billing information, encompassing everything from project IDs to cost center details. SCA can work with a variety of ERP systems like SAP, Oracle, Great Plains, Epicor, and QuickBooks.
Spreadsheet, .PDF & Email Integration
Recognizing the ubiquity of general business tools in contractual processes, SCS can ingest standardized spreadsheets for diverse data needs, from pricing to equipment availability.
Deploy Smart Contract
SCS uses off the shelf Blockchain and Cloud Infrastructure combined with proprietary SCS Distributed Applications (DAPPs) to deliver the Smart Contract Solution.
The Smart Contract Dashboard displays the contract execution status in near real time
-
Authorized users can view, amend and approve defined contract elements
-
UI is assembled with stakeholder input to ensure maximum utility
Integrate with Business Processes
Smart Contracts integrate seamlessly with the existing business processes. Integration method is determined on a case by case basis.
APIs - preferred integration method due their robustness and automation. Most large business systems will offer API connectivity (or similar).
Automated documentation - build custom reports or pro-forma invoices that integrate into existing business process without impacting in-house IT or system applications.
Automated communication - easy to build and deploy. These are typically used to inform or drive action from defined team members.