Statoil is an integrated Oil & Gas Company with extensive international activity in 33 countries. In 15 of these, Statoil is engaged in exploration and production. One of the world’s largest sellers of crude oil and a substantial supplier of natural gas to the European market, Statoil markets two-thirds of all Norwegian gas. The company is the largest retailer of oil products in Scandinavia with about 26,000 employees, half of whom are located outside Norway. The annual turnover in 2005 was NOK 393 billion.
The Statoil Group’s information systems are important drivers in implementing world-class business processes, fulfilling the company strategy, and achieving clear growth targets. ICT (Information & Communications Technology) at Statoil is considered a crucial business contributor that must be incorporated in all relevant strategies.
Terje Lie, responsible for Statoil’s Business Process Model, says: “All business process modeling is handled with QualiWare Lifecycle Manager (QLM). QLM is an important management system tool for further implementation work on a common enterprise model at Statoil.” Harald Wesenberg, Discipline Advisor for Enterprise Architecture on the Corporate Staff of IS/IT at Statoil, adds, “QLM is the foundation of our quality management system. The ability to manage work processes, application portfolios, and government regulations and legislative mandates in a single tool while integrating this work with other corporate management tools provides us with the ability to continuously improve company performance. And, we retain previous improvements even as we move forward with new ones.”
Terje Lie continues, “The work to date has resulted in a number of benefits — for example, cost savings from improved application portfolio management, improved efficiency in projects, improved interoperability, and the creation of a common modeling platform for business and IT, incorporating high-level models and risk reduction related to migration plans.”
An important initial effect of the QLM implementation at Statoil is a substantial savings on software maintenance and application development and operations costs. By the end of 2005, more than 500 applications had been discontinued at the company, resulting in substantially improved IT governance. Statoil has achieved an annual saving in excess of NOK 60 million and anticipates further potential savings in excess of NOK 60 millions in ICT operations. Statoil has implemented unified global models for the production and supply of gas and, by April 2006, was SOX 404 compliant using QLM Business Process Modeling.
Alignment of IT processes
The initial motivation for Statoil was to build a high-level model showing how IT systems supported business processes and to identify the need for process information and data. In 2003, Statoil initiated several first steps to align IT applications with business processes. The goal was to achieve three key objectives:
- Ensure a linkage from business strategy and improvement goals to the migration of plans and projects (“alignment”)
- Establish a model of the enterprise with different views and levels of detail, depending on the purpose
- Build a governance structure to ensure that the delivery of IT solutions follows best practices and also ensure continuous updating of the architecture.
The alignment of more than 3000 IT applications involved the grouping of applications into three categories:
- Key applications for further refinement and development
- Applications to be maintained
- Redundant and overlapping applications to be phased out.
From Business Strategy to ICT Projects
Statoil is following an Enterprise Architecture-based methodology to evaluate the need for ICT tools. This methodology makes it possible to compare future strategic requirements and architectural principles with the company’s current environment, including business processes, systems, infrastructure etc. The resulting gap analysis will lead to migration planning and project execution for new solutions.
Process Reengineering of Gas Sales
In 2003, public regulations for the marketing and sales of gas were changed. This called for reengineering of some of the company’s key processes. Statoil took advantage of the situation to synchronize its operational processes in Norway and the UK.
Among future challenges facing Statoil, Terje Lie mentions “achieving and maintaining quality with increased model complexity; implementing new ways of working across process areas, business areas and internal ICT vendors; and fostering and focusing organizational awareness. Challenges regarding implementation of new processes in organizations, and linguistic and cultural differences should not be underestimated.”