CLIENT STORY

Automation rids fraud and waste

KPMG helped a U.S. state leverage IBM Watson intelligent automation to assure compliance for oil and gas lease payments.

Client
A U.S. state agency
Sector
State and local government
Project
Intelligent automation with IBM Watson
  • Client challenge
  • Benefits to client
  • Approach
  • KPMG insights

Client challenge

Charged with verifying the accuracy of payments for numerous oil and gas leases, a state agency faced the same challenge every year: it could manually examine only a small percentage. With limited staff and legislative caps on the number of employees it could hire, the agency needed to augment its capabilities to meet volume demands. A combination of artificial intelligence, intelligent automation, and enhanced data and analytics was the only scalable approach that would allow the agency to achieve 100 percent reconciliation and compliance. And the stakes were high: the contracts represent significant revenue that helps fund public education in the state.

Benefits to client

To help ensure that oil and gas producers comply with the terms and conditions of each contract, KPMG and our alliance partner, IBM Watson, developed a solution expected to:

  • automate exception reporting so that what took a year to do can now be handled overnight
  • implement IBM Watson as a cloud solution, better enabling the agency to begin implementing digital solutions
  • expand across the agency to other oil- and gas-related business processes to produce further savings
  • accelerate disaster recovery efforts by expediting property damage assessments and eligibility determination for storm victims in the state.

Approach

KPMG was introduced as a strategic advisor to the state agency by our alliance partner, IBM Watson. Given our existing relationship with the state, teaming with IBM Watson came naturally. In fact, the agency’s CIO said the KPMG and IBM Watson teams worked seamlessly to help the agency meet its business needs without expanding its staff. KPMG’s unique breadth brought together a multidisciplinary team to work alongside the agency to facilitate a rapid and comprehensive response. Our team included:

  • KPMG professionals with an in-depth knowledge of the oil and gas industry as well as a thorough understanding of the terms and conditions of the oil leases, many of which are more than 100 years old.
  • data scientists from KPMG’s Lighthouse for Advanced Data and Analytics, who assimilated disparate sources of structured and unstructured data and configured it for IBM Watson
  • IBM Watson, a cognitive computing platform that combines artificial intelligence and sophisticated analytical software. Rather than face the capacity constraints of the employees who can reviews leases to find a certain percent error rate, IBM Watson can look at all the leases and focus only on actionable anomalies that produce cost savings.
  • KPMG’s digital enablement team to offer insights on the impact of implementing IBM Watson as a cloud solution
  • state and local government and federal Advisory professionals to leverage KPMG’s experience in implementing intelligent automation in local, state and federal agencies
  • KPMG’s CIO Advisory professionals to help the CIO successfully navigate IT transformation and innovation.

 

With the breadth and depth of these resources working on their behalf, the agency can more efficiently and effectively review production data and maximize the state revenues that fund education. For the KPMG account team, this objective also aligns with our higher purpose: not only to leverage the technology that enables transformation but to create better lives for our fellow citizens.

KPMG insights

Believe in the art of the possible

Artificial intelligence, intelligent automation, and data and analytics are much more than gee-whiz technologies, so it’s important to understand their capabilities. Intelligent automation, for example, is not likely to eliminate jobs as much as technology will handle low-value tasks so that people can focus on more high-value work. With demands on government agencies only increasing – but without the corresponding headcount – these advanced technologies can give agencies the ability to scale their operation to meet increased demands.

Leverage alliance partners to help keep you up to date

Alliance partners bring a wealth of insights and intelligence that you can access through workshops and one-on-one meetings to help you harness technology to create greater business value.

Challenge yourself

Be willing to examine some of your processes to find the hidden nuggets you had never thought about before where it would make sense to deploy artificial intelligence, intelligent automation, and data and analytics.

This client has measurably reduced error rates and created millions of dollars in annual savings.

 

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