Countdown to NAPE - Part 4
Countdown to NAPE Summit
Are your Asset Tracking Methods Obsolete?
Delivering More for Less: Increased Efficiency = Increased Competitiveness
Note: This series is geared toward land brokerages. It is designed to help them realize how they can differentiate themselves and therefore be more competitive by utilizing technology solutions already available to them. Obviously, if you are engaged in the hiring of brokerages, this information will be helpful to you as well. A more efficient brokerage can deliver more for less, and everybody wins.
Part 1 of 5 – Broker and Client Billing
Part 2 of 5 – Title Management
Part 3 of 5 - Field Acquisition
Part 4 of 5 – Asset Tracking
Part 5 of 5 –The Status Quo is too Expensive
Asset Tracking
There are many reasons why a brokerage would need to track the rights and obligations of a block of assets (OGMLs, rights of way, seismic permits, etc.). Sometimes it is simply a matter of convenience, in the case where the brokerage has performed the acquisition work and therefore already has everything mapped and documented. Other times, it may be that the non-op client simply is not large enough or otherwise uninterested in investing the significant amount of time and capital required to research, purchase, implement and maintain an in-house asset management system.
Regardless of why, brokerages are generally happy to provide that service for their clients. It is great to be asked to provide an expiration map or options-due map; or a report showing where they are vulnerable to shortened continuous drilling requirements; or even knowing how many signatures will be required to extend all of the leases on a tract. The examples are virtually endless, which is why this area is so important in provide full service to your clients.
As with previous articles, we will be looking at the various methods brokerages employ to serve the needs of their clients. I recognize that there will be some overlap in categories, such as having a paper only file system but preparing maps using GIS software, but I think the effect of the discussion will still be to inform.
Before jumping into the various types of systems, it is important to note that, regardless of which you employ or hope to employ, you should always approach your projects with the end game in mind, meaning organize your paper files, electronic files, maps, etc. in such a way as to facilitate easy retrieval. Your client will thank you for it.
With a paper only system, a request might amount to a list of expiration/option due payments. Of course, if the information has not at least been compiled into a spreadsheet ahead of time, the only option is to go through each file and actually do the compiling into a spreadsheet then, capturing the pertinent data in a way that can be sorted and filtered. Pretty simple but also extremely inefficient if more than just a few folders need to be checked. If dozens or hundreds of files are involved, the task can grow enormous very quickly.
Many brokerages still use a drawing program to create maps, and may have already done so for the contracts at hand, so simply referring to a tract number on the map can provide additional information to the client. If the request is for the map to include tracts symbolized by month or quarter, the task becomes even more involved. Everything is doable—just slow, inefficient and costly.
The use of integrated desktop applications, in this case a spreadsheet or desktop database like Excel or Access, respectively and a GIS program like ArcMap is common, and a big step above paper only, but far from being ideal. It is likely that the brokerage already has much if not all of the information in spreadsheets. To consider the mapping angle, an overview of how GIS is used (and mis-used) in the land industry is in order. From the 50,000 foot level (metaphorically), and using the terminology of ESRI’s ArcMap, any GIS system is going to consist of points, lines and polygons that ‘know where they are’ on the planet, generically referred to as ‘features’. These features can have data associated with them, but it will always be tract based and on a one-to-one basis. In other words, a polygon representing a tract will have one ‘row’ of data (although it can have many columns, or ‘fields’). The data associated with features is going to be in a shapefile (a separate, linked dbf file) or a geodatabase (part of a SQL database).
The powerful thing about ArcMap and its related products is that the feature can be linked to external data. That means you can have a point representing a well, have some identifier in the shapefile or geodatabase such as a Tract ID and link it to a spreadsheet, an Access database or even enterprise level databases. Once connected, you can not only present data through your map dynamically (meaning the map will change if/when the underlying data changes), you can ‘symbolize’ your data dynamically.
In practical terms, symbolizing means coloring or hatching the tracts of your map based on whatever you define, such as month or quarter of earliest due date, number of signatures required, what percent of interest expires during that earliest period—any number of things. Symbolizing based on external data is far superior to the alternative, which is going to each feature and manually changing the formatting, which in today’s environment is very old school.
The biggest problem with using the above scenario (particularly a spreadsheet vs. a database), is that the map is tract-based and the data it is trying to report is lease- or contract-based. The upshot of this is that for the map to make sense, the spreadsheet will need to be ‘converted’ to tract-based data. This is not difficult for someone who knows what he/she is doing, but is not necessarily intuitive for everyone.
If the data is stored in a well-designed database (Access, SQL, Oracle, doesn’t matter), the data can be converted in real time and on demand via a database query. Doing so enables much more ‘what if’ consideration, making changes much more easily than if the information is static.
So even within this category, there is a broad range of efficiency levels. Static data within a shapefile or geodatabase vs. external data; and spreadsheet vs. relational database.
A final thing to consider is a demonstration of the difference between static and dynamic data sources for your reports and maps.
Let’s say your client wants every tract that expires or otherwise needs attention within the next 90 days to be symbolized (colored) orange, 91-180 days yellow, 181-270 days blue and everything else green. Well you must first decide what your starting date is. Is it February 9, 2015? If you are updating manually or with static data, that is very important, because everything will be geared from that date. With a dynamic system, you could set the date to whatever you want, or even have your queries use the system date of the server, with your resulting map and report potentially changing day by day. In other words, if your client wants you to provide the same thing every month, with dynamic data you could do so efficiently and therefore competitively.
Any respectable web-based system will include all of the best aspects of the scenarios described above—your choice of static and dynamic data, relational databases that can convert data on demand via sophisticated queries and GIS applications with an unlimited number of layers and variations on symbolization. As with previous articles, the big jump comes in the ability to view the maps and reports in this discussion over the internet via a web interface. There is simply no way to provide your client with a higher level of service.
Finally, web-based systems as a rule do not require software to be installed on the user's computer, and provide hardware redundancy (for maximum uptime) and data redundancy (multiple backups spread across multiple locations). Referring back to the build or buy question, this is simply too costly for almost all individual brokerages to do themselves economically.
We at TotaLand have seen dramatic improvements in the lives of our clients, reducing field acquisition costs through increased efficiency, and allowing them to focus on what the client is paying them to do. How much is that worth to any organization, particularly one trying to remain competitive in a difficult environment? If your organization is not utilizing such technology, come visit us at booth 2552 next week at NAPE Summit, or give us a call at 800-465-5877.
Most importantly, now is the time to implement a quality, web-based field acquisition system. When things get busy again (and they will), the golden opportunity to become more efficient will have passed.
As we approach NAPE this week, we will be posting more articles about how brokerages can become more efficient, and therefore more competitive. See you at NAPE!
Bill Justice – Founder / President, TotaLand Technologies