Future Challenges Facing BP How technology can help. Vijay P Rao 15 June, 2007
Agenda <ul><li>Business environment </li></ul><ul><li>Challenges along the Value Chain </li></ul><ul><li>Challenges at the...
BP’s Business Characteristics Capital Intensive  Business Cyclical  Business Maturing Reserves Drive to maximize Asset Eff...
BP’s Growth Trajectory Source : Trajectories of Industry Change, Anita M. McGahan, Harvard Business Review, 2004 BP would ...
Agenda <ul><li>Business environment </li></ul><ul><li>Challenges along the Value Chain </li></ul><ul><li>Challenges at the...
Challenges Upstream  <ul><li>Re-packaging assets </li></ul><ul><ul><li>Oil Rigs    Digital Oil Platforms </li></ul></ul><...
Challenges Midstream & Downstream <ul><li>Managing Data Assets </li></ul><ul><ul><li>Data Explosion </li></ul></ul><ul><ul...
Agenda <ul><li>Business environment </li></ul><ul><li>Challenges along the Value Chain </li></ul><ul><li>Challenges at the...
 
 
End to End Integration Sewing up islands of automation across the value-chain Supplier Systems Ex : SAP, Proprietory Softw...
End to End Integration Sewing up islands of automation across the value-chain Global Integration Factory EAI Tools Enabled...
Agenda <ul><li>Business environment </li></ul><ul><li>Challenges along the Value Chain </li></ul><ul><li>Challenges at the...
E-Collaboration – Ingraining Web 2.0 Ideas <ul><li>BP - 5 different brands operating as individual firms </li></ul><ul><li...
Crowdsourcing Tapping onto the collective intelligence of the Net <ul><li>Procter & Gamble casting its R&D problems onto t...
Semantic Web and RDF/XML Data <ul><li>Next Generation Web Search </li></ul><ul><li>Vision of Web that computers can read <...
Agenda <ul><li>Business environment </li></ul><ul><li>Challenges along the Value Chain </li></ul><ul><li>Challenges at the...
How technology stacks up for BP Differentiating Technologies <ul><li>UPSTREAM & FIRMWIDE </li></ul><ul><li>Crowdsourcing <...
Questions ?
Appendix
BP Today… <ul><li>One of the world’s largest integrated oil groups </li></ul><ul><li>Competitors :  ExxonMobil, Royal Dutc...
 
 
 
Technology Assisted Sectors  in an Energy Firm Operator ERP Production Strategic  Decisions
The IT Infrastructure <ul><li>IT infrastructure must provide </li></ul><ul><ul><li>End-to-end security </li></ul></ul><ul>...
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Challenges BP Faces Today - How Technology can help

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Challenges facing British Petroleum (BP) today and how technology can help address these challenges

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  • THE TRADITIONAL IT MODEL The growth over the past few decades in technologies such as 3D and 4D seismic imaging technology, horizontal drilling, and deepwater production proves that companies in the capital-intensive energy industry will spare no expense investing in tools that will find and extract hydrocarbons more quickly and efficiently. But this willingness to invest in exploration and production technology traditionally has not extended to back-office IT. Oil and gas companies tend to view capital expenditures as a zero-sum game: any money spent on IT is money that isn&apos;t spent on getting resources out of the ground. &amp;quot;Now is the time for energy companies to consider investing in an area that may have been overlooked for some time: their IT environments.&amp;quot; This aversion to investment in non-core technology is compounded by the cyclical nature of the business. During lean times, when cash is scarce, IT expenditures move even further down the list of priorities. Conversely, when commodity prices are high, the thirst for one more drop of oil can become unquenchable. Thus IT is frequently considered a &apos;necessary evil&apos; rather than a powerful tool that can turn information into knowledge, knowledge that can help companies mitigate risk while being more efficient and effective in their operations.
  • Challenges BP Faces Today - How Technology can help

    1. 1. Future Challenges Facing BP How technology can help. Vijay P Rao 15 June, 2007
    2. 2. Agenda <ul><li>Business environment </li></ul><ul><li>Challenges along the Value Chain </li></ul><ul><li>Challenges at the Corporate Level </li></ul><ul><li>Harnessing Innovative Technology for BP </li></ul><ul><li>Concluding Thoughts </li></ul>
    3. 3. BP’s Business Characteristics Capital Intensive Business Cyclical Business Maturing Reserves Drive to maximize Asset Efficiency Volatile Prices Inelastic Demand Streamline Processes Build Scalable Systems
    4. 4. BP’s Growth Trajectory Source : Trajectories of Industry Change, Anita M. McGahan, Harvard Business Review, 2004 BP would fall into this quadrant. Core Assets constantly undergo redefinition
    5. 5. Agenda <ul><li>Business environment </li></ul><ul><li>Challenges along the Value Chain </li></ul><ul><li>Challenges at the Corporate Level </li></ul><ul><li>Harnessing Innovative Technology for BP </li></ul><ul><li>Concluding Thoughts </li></ul>
    6. 6. Challenges Upstream <ul><li>Re-packaging assets </li></ul><ul><ul><li>Oil Rigs  Digital Oil Platforms </li></ul></ul><ul><ul><ul><ul><li>Manage key areas of platforms remotely </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Enhance Employee Safety </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Achieve Cost Reductions </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Avoid total closure during natural calamities </li></ul></ul></ul></ul><ul><ul><li>Oil Recovery  Optimized Oil Recovery & Refining </li></ul></ul><ul><ul><ul><ul><li>3D  4D Seismic exploration </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Horizontal Drilling </li></ul></ul></ul></ul><ul><ul><ul><ul><li>‘X’ Technology </li></ul></ul></ul></ul><ul><ul><ul><ul><li>De-carbonized Fossil Fuels </li></ul></ul></ul></ul>
    7. 7. Challenges Midstream & Downstream <ul><li>Managing Data Assets </li></ul><ul><ul><li>Data Explosion </li></ul></ul><ul><ul><ul><li>New technologies upstream and downstream </li></ul></ul></ul><ul><ul><ul><li>Data explosion in terms of amount and data-type </li></ul></ul></ul><ul><ul><ul><li>Data needs to be catalogued, stored, backed-up and at the same time easily accessible </li></ul></ul></ul><ul><ul><ul><li>Safety, Security and Disaster Recovery </li></ul></ul></ul>Remote Logistics Management & Convenience Retailing Linking Upstream Energy Controlling IT systems with Downstream Data Management Systems Corporate Website & Service Hosting for other sites Oil Refining, Transportation, Safety, Drilling Workflow software Webmethods Content and Portal Management Systems like Plumtree EAI Applications like SeeBeyond ICAN, Tibco ERP systems like SAP Technology Aids
    8. 8. Agenda <ul><li>Business environment </li></ul><ul><li>Challenges along the Value Chain </li></ul><ul><li>Challenges at the Corporate Level </li></ul><ul><li>Harnessing Innovative Technology for BP </li></ul><ul><li>Concluding Thoughts </li></ul>
    9. 11. End to End Integration Sewing up islands of automation across the value-chain Supplier Systems Ex : SAP, Proprietory Software Internal Departmental Systems Ex : Mainframe, Legacy Systems, Oracle, MS Access, CRM, ERP Customer Systems Ex : EDI, Proprietary Software S1 S2 Sn C1 C2 Cn ID1 ID2 IDn
    10. 12. End to End Integration Sewing up islands of automation across the value-chain Global Integration Factory EAI Tools Enabled : SeeBeyond ICAN , Tibco S1 S2 Sn C1 C2 Cn ID1 ID2 IDn Data Adapters Data Adapters Data Adapters Network Security Protocol (SSL 3.0 and TLS 1.0 ) Global Database Top Management Reports Value Chain Optimization Global Data Integrity Global Coordination Disaster Recovery Global Database BPM Admin HR Operation Finance
    11. 13. Agenda <ul><li>Business environment </li></ul><ul><li>Challenges along the Value Chain </li></ul><ul><li>Challenges at the Corporate Level </li></ul><ul><li>Harnessing Innovative Technology for BP </li></ul><ul><li>Concluding Thoughts </li></ul>
    12. 14. E-Collaboration – Ingraining Web 2.0 Ideas <ul><li>BP - 5 different brands operating as individual firms </li></ul><ul><li>More than 115,000 employees – Everyone has ideas </li></ul><ul><li>Deploying Employee driven Intra-company Idea Aggregator WebTool . </li></ul>Internal Market VOTE Most Popular Most Recent Most Relevant … a new technology … an efficiency improvement … a new business area … an alternative energy focus PROPOSE Pattern Recognition Technologies Harness Ideas
    13. 15. Crowdsourcing Tapping onto the collective intelligence of the Net <ul><li>Procter & Gamble casting its R&D problems onto the net for netizens to solve </li></ul><ul><li>Amazon’s Mechanical Turk program </li></ul>Push requirements onto the Net Provide the right incentives Each member of the crowd puts forth an insignificant contribution to the total outcome, but the grand total of these contributions amounts to a considerable difference. <ul><li>Innovative Ideas can be explored at low cost </li></ul><ul><li>Easily Retractable </li></ul><ul><li>Highly flexible workforce </li></ul><ul><li>Heterogeneous ideas to solve problems </li></ul><ul><li>Getting netizens to scout for potential alternative energy sites around their locality </li></ul><ul><li>Getting netizens to identify rural energy requirements in emerging economies and how alternative energy know-how of BP can help </li></ul>
    14. 16. Semantic Web and RDF/XML Data <ul><li>Next Generation Web Search </li></ul><ul><li>Vision of Web that computers can read </li></ul><ul><li>Whole questions can be addressed by computers </li></ul><ul><li>Entire Datasets to be defined in Resource Description Framework and XML </li></ul>Can I place an electronic order for BP products so that I get it from the nearest BP retail shop located within 50 mile radius and that can be delivered within 72 hours to my store between 2pm and 5pm on weekdays ?
    15. 17. Agenda <ul><li>Business environment </li></ul><ul><li>Challenges along the Value Chain </li></ul><ul><li>Challenges at the Corporate Level </li></ul><ul><li>Harnessing Innovative Technology for BP </li></ul><ul><li>Concluding Thoughts </li></ul>
    16. 18. How technology stacks up for BP Differentiating Technologies <ul><li>UPSTREAM & FIRMWIDE </li></ul><ul><li>Crowdsourcing </li></ul><ul><li>Semantic Web </li></ul><ul><li>Digital Oil Field </li></ul><ul><li>Simulation / Modeling </li></ul>Table Stakes Technologies <ul><li>MIDSTREAM & DOWNSTREAM </li></ul><ul><li>Data Management </li></ul><ul><li>E-Procurement </li></ul><ul><li>Global Integration Factory </li></ul>Commodity Technologies <ul><li>MIDSTREAM & FIRMWIDE </li></ul><ul><li>Electronic Collaboration </li></ul><ul><li>Electronic Commerce </li></ul>Foundation Technologies <ul><li>FIRMWIDE </li></ul><ul><li>Basic Desktop Services </li></ul><ul><li>Networks </li></ul><ul><li>Servers </li></ul>Foundation Technologies Differentiating Technologies Table Stakes Technologies Commodity Technologies
    17. 19. Questions ?
    18. 20. Appendix
    19. 21. BP Today… <ul><li>One of the world’s largest integrated oil groups </li></ul><ul><li>Competitors : ExxonMobil, Royal Dutch Shell, Chevron and Total </li></ul><ul><li>Global Energy Group : Finding, producing and marketing natural energy resources </li></ul><ul><li>3 segments : 1 Resource Oriented and 2 Customer Oriented </li></ul><ul><ul><li>Resource Segment : </li></ul></ul><ul><ul><ul><li>Exploration & Production (E&P) </li></ul></ul></ul><ul><ul><li>Customer Segments : </li></ul></ul><ul><ul><ul><li>Refining & Marketing (R&M) </li></ul></ul></ul><ul><ul><ul><li>Gas, Power & Renewables (GP&R) </li></ul></ul></ul><ul><li>More than 100,000 employees in over 100 countries </li></ul><ul><li>Main Brands : BP, Aral, Castro, ARCO and am/pm </li></ul>
    20. 25. Technology Assisted Sectors in an Energy Firm Operator ERP Production Strategic Decisions
    21. 26. The IT Infrastructure <ul><li>IT infrastructure must provide </li></ul><ul><ul><li>End-to-end security </li></ul></ul><ul><ul><li>Interaction with data in the right time </li></ul></ul><ul><ul><li>Integration with other data and systems </li></ul></ul><ul><ul><li>Solutions for presentation and evaluation </li></ul></ul><ul><ul><li>Capability for collaboration </li></ul></ul><ul><li>IT infrastructure implementation must be reliable and repeatable </li></ul>

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