Mergers such as Bolo/WellPoint can benefit oil and gas marketplace

Richard Slack WellPoint Systems Houston

Bolo Systems, a back-office upstream software company, emerged onto the accounting software scene in 1995 with a solution that allowed companies to more effectively access and manage their accounting, land, and production data in an integrated, flexible environment. After being purchased by WellPoint Systems for an undisclosed amount, these traditions continue.

As part of WellPoint Systems, Bolo remains committed to helping customers manage their business through the application of fit for purpose technologies and services.

Why acquisition is good for the market

WellPoint Systems has invested in building a technology portfolio to solve the unique challenges faced by companies in the oil and gas, and mining industries. In addition to building solutions internally, WellPoint Systems has acquired companies to round out its portfolio, adding iSoft Technologies in March 2007 and IDEAS International in March 2006. iSoft Technologies offered its Enterprise Asset Management (EAM) solution, while IDEAS International provided financial and administration solutions for international oil and gas operations, bringing on board 200 customers and 39,000 users.

The addition of Colorado-based Bolo into WellPoint Systems in August 2007 provided functionally rich US capabilities that were missing from the WellPoint portfolio and augments WellPoint’s strategy of creating a leading software solution provider in the global oil and gas back-office market.

“With the completion of this acquisition we have further strengthened our position as a truly global energy software company by improving our access to the sizeable US market through the addition of expanded country-specific strategies, products, expertise, and infrastructure,” said Frank Stanford, CEO of WellPoint Systems. “We are now well positioned to further penetrate the US market by accessing cross-selling opportunities as we leverage our complementary operations, customer bases, and service offerings.”

The acquisition of Bolo brought more than 120 US customers into the WellPoint Systems family, extending the WellPoint footprint into the US market. With many midstream and international customers such as ExxonMobil, BP, and Plains All American Pipeline already running WellPoint solutions, the acquisition of Bolo allowed WellPoint to add mid-tier US companies like Forest Oil, EnerVest Management, and Petrohawk Energy to its portfolio.

An additional market segment that Bolo attracts is that of US start-up companies. Many start-ups fail to make strategic software decisions, neglecting to choose software that scales with the company’s growth. Companies such as NFR Energy, Cobalt International Energy, and Eagle Rock Energy are attracted to Bolo, which provides the functionality needed when the company is small, yet is scalable and will not be outgrown. This was an appealing aspect to WellPoint because the industry has many entrepreneurs and this segment is growing and continually regenerating.

Post-acquisition, Bolo will continue to operate independently, focusing on meeting ambitious revenue and profitability goals. Its organizational structure will largely remain in place, with no staff members losing their jobs. At the same time, integration of business function such as finance, information technology, and human resources will help the combined company work more seamlessly.

One strategic move that focused on the long-term vision of WellPoint Systems was to name Michael Weiss, Bolo’s former head of research and development as the vice president of research and development for the entire WellPoint Systems organization. In his expanded role, Weiss will ensure the seamless integration and design of both heritage and next-generation solutions.

“Think of a non-integrated software solution as two or three silos speaking different languages,” said Weiss. “While there can be an effective translator, one or two words inevitably will be misunderstood, lost or even modified, possibly transforming the entire meaning of the exchange. If you are trying to make critical business decisions based on this translation, it could be disastrous.”

Throughout 2008, Weiss said his focus will be on integrating the expanded WellPoint Systems product line to add additional value to the suite of offerings.

One of the values that WellPoint Systems brings to Bolo from a technology perspective is its partnership with Microsoft. WellPoint continues to be Microsoft’s only independent software vendor (ISV) and Microsoft Dynamics partner focused on the oil and gas industry. WellPoint became Gold Certified in 2005. WellPoint has broken new ground with the creation of an integrated software suite powered by Microsoft Dynamics AX.

Before completing the acquisition of Bolo, WellPoint evaluated a number of US-based software providers in the oil and gas space and decided on Bolo for the following reasons:

1. Software Coverage – Bolo offers a broad back-office solution in US accounting, land and production, which complements WellPoint’s international offerings.
2. Industry Leadership – Bolo has become the thought-leader in our market space for back-office accounting solutions.
3. Management and Performance – Bolo has a strong management team that is capable of building and sustaining growth in market share and financial performance.
4. Company Resources – Bolo has a strong domain expertise in oil and gas accounting, land and production, along with strong development expertise.