Future Challenges Facing BPHow technology can help.

Vijay P Rao15 June, 2007

Agenda

• Business environment

• Challenges along the Value Chain

• Challenges at the Corporate Level

• Harnessing Innovative Technology for BP

• Concluding Thoughts

BP’s Business Characteristics

Capital Intensive Business

Cyclical Business

Maturing Reserves

Drive to maximizeAsset Efficiency

Volatile Prices

Inelastic Demand

Streamline Processes

Build Scalable Systems

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

Agenda

• Business environment

• Challenges along the Value Chain

• Challenges at the Corporate Level

• Harnessing Innovative Technology for BP

• Concluding Thoughts

Challenges Upstream

• Re-packaging assets– Oil Rigs Digital Oil Platforms

– Manage key areas of platforms remotely– Enhance Employee Safety– Achieve Cost Reductions– Avoid total closure during natural calamities

– Oil Recovery Optimized Oil Recovery & Refining

– 3D4D Seismic exploration– Horizontal Drilling– ‘X’ Technology– De-carbonized Fossil Fuels

Challenges Midstream & Downstream• Managing Data Assets

– Data Explosion• New technologies upstream and downstream

• Data explosion in terms of amount and data-type

• Data needs to be catalogued, stored, backed-up and at the same time easily accessible

• Safety, Security and Disaster Recovery

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 softwareWebmethods

Content and Portal Management Systems like

Plumtree

EAI Applications like SeeBeyond ICAN, TibcoERP systems like SAP

Technology Aids

Agenda

• Business environment

• Challenges along the Value Chain

• Challenges at the Corporate Level

• Harnessing Innovative Technology for BP

• Concluding Thoughts

Supplier SystemsEx : SAP, Proprietory

Software

Internal Departmental SystemsEx : Mainframe, Legacy Systems, Oracle,

MS Access, CRM, ERP

Customer SystemsEx : EDI, Proprietary

Software

End to End IntegrationSewing up islands of automation across the value-chain

S1

S2

SnC1

C2Cn

ID1

ID2

IDn

Global Integration Factory

EAI Tools Enabled : SeeBeyond ICAN, Tibco

S1 S2 Sn C1 C2 CnID1 ID2 IDn

DataAdapters

Data

AdaptersDataAdapters

Network Security Protocol (SSL 3.0 and TLS 1.0)

GlobalDatabase

Top Management Reports

Value Chain Optimization

Global Data Integrity

Global Coordination

Disaster Recovery

GlobalDatabase

End to End IntegrationSewing up islands of automation across the value-chain

BPM

Admin

HR

Operation

Finance

Agenda

• Business environment

• Challenges along the Value Chain

• Challenges at the Corporate Level

• Harnessing Innovative Technology for BP

• Concluding Thoughts

VOTE

Most Popular

Most Recent

Most Relevant

E-Collaboration – Ingraining Web 2.0 Ideas

• BP - 5 different brands operating as individual firms

• More than 115,000 employees – Everyone has ideas

• Deploying Employee driven Intra-company Idea Aggregator WebTool.

Internal Market

…a new technology

…an efficiency improvement

…a new business area

…an alternative energy focusPROPOSE

PatternRecognition

Technologies

Harness Ideas

CrowdsourcingTapping onto the collective intelligence of the Net

• Procter & Gamble casting its R&D problems onto the net for netizens to solve

• Amazon’s Mechanical Turk program

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.

• Innovative Ideas can be explored at low cost• Easily Retractable• Highly flexible workforce• Heterogeneous ideas to solve problems

• Getting netizens to scout for potential alternative energy sites around their locality

• Getting netizens to identify rural energy requirements in emerging economies and how alternative energy know-how of BP can help

Semantic Web and RDF/XML Data

• Next Generation Web Search• Vision of Web that computers can read• Whole questions can be addressed by computers• Entire Datasets to be defined in Resource Description

Framework and XML

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?

Agenda

• Business environment

• Challenges along the Value Chain

• Challenges at the Corporate Level

• Harnessing Innovative Technology for BP

• Concluding Thoughts

How technology stacks up for BP

Foundation TechnologiesFoundation Technologies

DifferentiatingDifferentiatingTechnologiesTechnologies

Table StakesTable StakesTechnologiesTechnologies

CommodityCommodityTechnologiesTechnologies

Differentiating Differentiating TechnologiesTechnologies

UPSTREAM & FIRMWIDE

• Crowdsourcing

• Semantic Web

• Digital Oil Field

• Simulation / Modeling

Table Stakes Table Stakes TechnologiesTechnologies

MIDSTREAM & DOWNSTREAM

• Data Management

• E-Procurement

• Global Integration Factory

Commodity Commodity TechnologiesTechnologies

MIDSTREAM & FIRMWIDE

• Electronic Collaboration

• Electronic Commerce

Foundation TechnologiesFoundation Technologies

FIRMWIDE

• Basic Desktop Services

• Networks

• Servers

Questions ?

Appendix

BP Today…

• One of the world’s largest integrated oil groups• Competitors : ExxonMobil, Royal Dutch Shell, Chevron and Total

• Global Energy Group : Finding, producing and marketing natural energy resources

• 3 segments : 1 Resource Oriented and 2 Customer Oriented– Resource Segment :

• Exploration & Production (E&P)

– Customer Segments : • Refining & Marketing (R&M)• Gas, Power & Renewables (GP&R)

• More than 100,000 employees in over 100 countries• Main Brands : BP, Aral, Castro, ARCO and am/pm

Technology Assisted Sectors in an Energy Firm

Operator

ERP

Production

Strategic Decisions

The IT Infrastructure

• IT infrastructure must provide– End-to-end security– Interaction with data in the right time– Integration with other data and systems– Solutions for presentation and evaluation – Capability for collaboration

• IT infrastructure implementation must be reliable and repeatable