For oil giant Exxon Mobil, which has a presence in 200 countries, technology and business process standardisation are the keys to success. "We already have developed a suite of systems that deploy best practices. Technology is a critical enabler to that," says Patricia Hewlett, vice president of global IT at Exxon Mobil, which is the world's largest energy company.
Exxon Mobil's IT efforts differ from those of its competitors in the extent to which it focuses on standardisation and achieving economies of scale, Hewlett says. That focus allows the company to do more with less and to be more agile when responding to changing business needs, she says.
The strategy has clearly benefited the company's upstream business unit, which focuses on oil exploration, extraction and transportation, Hewlett says. A common platform, dubbed the "upstream suitcase", integrates everything Exxon Mobil needs to move into a new market, including the enterprise resource planning (ERP) system and tools that monitor equipment, track personnel and manage work permits. "It's a suite of standard computing applications we can use anywhere in the world," Hewlett says. Last year, Exxon Mobile used the “suitcase” to quickly set up new operations in Russia and Angola.
The commitment to standardisation played a critical role during Exxon's merger with Mobil, allowing the combined companies to reduce staffing by about 15,000. "Some of that couldn't have happened if we hadn't standardised the IT suite," Hewlett says.
The corporation's most ambitious recent project has been its tenacious pursuit of a common, global ERP platform for its chemical business. The initiative eventually consolidated business unit operations onto a single implementation of SAP software. Gartner analyst Dan Miklovic says substantial technical hurdles and integration complexities were overcome through a "brute-force effort", with those involved hammering away until the project succeeded. The result is one of the world's largest SAP implementations. "They're doing a good job of standardising on a large chunk of SAP. Other companies are not doing that well," Miklovic says.
"It helped improve the quality and timeliness of data, and we've gotten even greater benefits than forecast," Hewlett says. But the move also represented a trade-off. "By pushing so much SAP, they are in fact giving up some best-of-breed functionality," which has allowed some of Exxon Mobil's competitors to adopt more cutting-edge capabilities, Miklovic says.
"By using tools that are not as good as best of breed, at the very least they have to spend more and work harder to do as well as competitors that use better tools." For Hewlett, however, establishing a set of common global processes is paramount, and SAP provided a means to that end.
Despite its fixation on standards, Exxon Mobil does support the use of leading-edge, best-of-breed technology when the business value is high and the technology can be narrowly deployed. "There's the constant balance you have between sustaining these standards that give you the flexibilities and economies of scale [while] also being responsive to the needs of the different business lines," Hewlett says. "Making the trade-offs on when it is appropriate to make an exception to the standard – and why – is a challenge."
For example, scientists use specialised research software to develop catalysts that help break down crude oil for use in creating plastics and other products. But for products that are widely deployed, Exxon Mobil sticks with the most mature, scalable technologies. "You can't afford to be out there pulling down the productivity of 100,000 people while you mature the product," Hewlett says.