BP refines £4.7bn operational efficiency plan

Oil giant BP is aiming to remove a total of $7 billion (£4.7 billion) from annual operational costs, aided by a huge overhaul of IT, processes and project management.

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BP plans to get the most from its assets and “make this portfolio work harder for us”, Hayward said. The company has established regional business service centres, in Budapest, Kuala Lumpur and Chicago, aiming to carry out finance, customer service and procurement more efficiently.

Further cost cutting will be achieved through improved project management, as well as better procurement, marketing, refining, and drilling. Refining and marketing will be responsible for two-thirds of the £2 billion cuts due over the next two to three years.

BP focuses on improved project management

Project management will be overhauled in the company’s exploration and production divisions, in which BP said a “significant organisational restructuring” is taking place. A new team, called Centralised Developments, will manage all projects.

In a typical project, BP models the activities the company plans to take. It starts by modelling the business process, from which it creates change management models.

“We see these interlocking process and change activities as fundamental to gaining active participation of asset staff,” said David Feineman, business process advisor at BP in Houston, speaking at last week’s Gartner Business Process Management Summit in London.

BP had learnt that change management and business processes develop over time, moving from a focus on engagement and staff competencies during the early stages of the change, to a focus on adoption towards the end. It focuses on making process models as uncomplicated as possible, particularly when dealing with a new greenfield site where local employees are new to the processes.

“It is essential to keep the graphical models uncluttered to allow humans to reason about the business model. Where procedural details are required on activities, we switch from graphical models to narrative use case descriptions.

“In knowledge-based processes, every detail cannot and should not be described,” said Feineman.

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