Biggest is best for Chevron’s projects

Petrol giant Chevron accumulates data at a rate of 2 terabytes a day, or 23MB every second. But accommodating this data is seen as neither a technical challenge nor a financial burden – it is an opportunity, says Gary Masada, corporate chief information officer and president of Chevron's Information Technology Company (ITC). "You have this information – how are you going to search it and use it?"


Petrol giant Chevron accumulates data at a rate of 2 terabytes a day, or 23MB every second. But accommodating this data is seen as neither a technical challenge nor a financial burden – it is an opportunity, says Gary Masada, corporate chief information officer and president of Chevron's Information Technology Company (ITC). "You have this information – how are you going to search it and use it?"

It is perhaps not surprising that in a company where all the numbers are big – $194bn (£97bn) in sales, 10,000 servers, 1m email messages handled each day and 3,500 people in IT – size is seen as an opportunity, not a problem. For example, while the current wisdom in many IT circles is to regard mega-projects as too risky, Masada says his best projects span three to five years and cost hundreds of millions of dollars.

"Large projects deliver good returns on investment, small projects don't," Masada says. "Large projects, by their nature, have more integration and are better thought out. The investment dollars are large enough to make a difference, and they get a lot of focus."

Masada arrived in his job three years ago, after the completion of a massive integration of "downstream" systems – those dealing with refining, marketing and transportation – for Chevron, Texaco and Caltex, which merged in 2001.

A new global IT infrastructure, called Global Information Link 2/Net Ready, connected 50,000 desktops and 1,800 company locations and was expected to save the company $50m (£25m) annually by eliminating duplicate processes and systems.

A spokeswoman says the project has returned a net value of about $200m (£100m) over the past four years. "The object was to allow our workforce to do their work anytime, anywhere," Masada says. "That had finished up quite successfully and linked up the whole corporation."

Indeed, the IT organisation that Masada took over had earned a reputation for innovation, technical strength and the ability to execute huge projects, and had proved it could deliver IT services to the company reliably and efficiently, he says.

But top management wanted more. "I was asked to bring more of a business focus and a stronger alignment with the business," Masada says. "So I instituted Project Everest, which looked at providing the IT blueprint and the investment road map for investments going out [for the next] five years."

Everest is not an IT project in the conventional sense: it is a strategic framework for the company's biggest and most important IT projects. It is intended to ensure that the projects with the biggest benefit to the company as a whole get the right funding at the right time, and that they get special management attention.

Not all projects fall under the Everest umbrella, nor should they, Masada says. Non-Everest projects include the thousands of smaller initiatives that may be important to one office or business unit but are not strategically important to the company as a whole. In fact, just 20% of the global downstream IT projects are on the Everest road map, although they account for 90% of all project spending.

"They are the huge projects, and they are being very actively managed," Masada says. One Everest project, dubbed Olympic, seeks to consolidate all Chevron's enterprise resource planning systems and standardise them on SAP, for example.

Each of the projects under Everest has its own performance targets, including savings that run into hundreds of millions. In addition, Everest itself is expected to contribute $150m (£75m) a year in savings and productivity increases, Masada says. "What Everest does is make sure that the IT investments go toward projects that earn the company the most money.”

Successfully managing mega-projects means, among other things, using Chevron's homegrown project management methodology, the Chevron Project Development and Execution Process. Known as CPDEP, pronounced "chip dip", it includes five phases, from "identify and assess opportunities" to "transfer and operate”. It was developed for $1bn-plus non-IT projects, such as deep-water construction, but has been adapted to IT.

In addition to reflecting Masada's belief that the biggest projects have the biggest payoff, Everest works on the theory that individual business units – marketing in Asia, say, or gas exploration in the Gulf of Mexico – do not always set IT priorities that are best for the company as a whole.

"What you've got is a lot of little things that are supporting local and regional businesses that are not really connected, are not really designed with the big picture in mind," Masada says. "So what you get is a cobbled mess of wires, where things are just not connected to the right places. From an IT perspective, we didn't go about making sure that what we built was really built for the future."

Project Everest is intended to fix that, he says. "It starts at the top and works its way down. It starts with the business leaders."

Sekhar Venkat, an analyst at IDC company Energy Insights, says Chevron's IT initiatives appear to be aimed at closing gaps that exist at some of the largest energy companies. There is often a lack of connection between the scientific and engineering systems and staff in the upstream areas of exploration and production, the systems and staff downstream in refining, marketing and transportation, and corporate-level managers who want to see everything that goes on.

Chevron has recently begun work on its third Global Information Link (GIL) project. GIL 1 standardised desktops, laptops and operating systems, while GIL 2 built out the network and standard server infrastructure, providing connectivity to operations all over the world. GIL 3 will focus on information management. If GIL 1 and GIL 2 gave users the infrastructure they needed to work with one another, GIL 3 will give them the tools to do so.

For example, GIL 3 will use new technology to tag information so it can be more easily found and shared. It will also create new governance policies and strengthen auditing procedures to ensure that new IT standards are adhered to. That includes the adoption of IT Infrastructure Library (ITIL) standards for management of IT operations.

GIL 3 will use Microsoft's Vista operating system and its SharePoint product suite for communication and collaboration. SharePoint, which Microsoft says is intended to connect people, processes and systems, will facilitate collaboration among employees, partners and customers, Masada says. Employees will be able to use it to create and manage their own websites and make them available anywhere at Chevron.

"SharePoint will help us manage projects and share information in real time," Masada says. "We'll have a common source of the truth, as we call it."

"Standardisation of platforms allows Chevron to really give visibility to operations, and it allows them to get better business intelligence because it allows for a common view – one view of the state of things, as opposed to everyone seeing things in their own silos," Venkat says.

Moving to SharePoint will be a challenge. Masada says effective use of the suite will require a lot of training combined with big changes in user behaviour, including the way users tag information before storage and how people collaborate with one another.

But it will help answer the question of what to do with the 2 terabytes of data created each day. "Part of the idea in information management," Masada says, "is that you have a bigger and bigger haystack to find the needle in."

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