Being big is actually a bonus: Chevron CIO

The oil company's ICT supremo says size is no barrier to project success

Chevron accumulates data at a rate of 2TB a day, or 23MB every second. But accommodating this data is seen as neither a technical challenge nor a financial burden — it’s an opportunity. “It’s an issue of ‘you have this information, how are you going to search it and use it’?”, says Gary Masada, corporate CIO and president of Chevron’s IT department.

It’s perhaps not surprising that in a company where all numbers are big — US$194 billion (NZ$289 billion) in sales, 10,000 servers, a million emails handled each day and 3,500 people in ICT — size is seen as an opportunity, not a problem. For example, while the current wisdom in many ICT 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 assumed his post 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 ICT infrastructure, called Global Information Link 2/Net Ready, connected 50,000 desktops and 1,800 company locations and was expected to save the company US$50 million annually by eliminating duplicate processes and systems. A spokeswoman says the project has returned a net present value of about US$200 million over the past four years.

“The object was to allow our workforce to do their work any time, anywhere,” Masada says. “That had finished up quite successfully and linked up the whole corporation.”

Indeed, the ICT organisation that Masada took over had earned a reputation for innovation, technical strength and the ability to execute huge projects, and it had proved it could deliver ICT 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 roadmap for investments going out five years.”

Everest is not an ICT project in the conventional sense; it’s a strategic framework for the company’s biggest and most important ICT projects. It’s intended to ensure that the projects that bring 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, and nor should they, Masada says. Non-Everest projects are 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 ICT projects are on the Everest roadmap, 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, for example, dubbed Olympic, seeks to consolidate all of Chevron’s ERP systems and standardise them on SAP.

Each of the projects under Everest has its own performance targets, including savings that are often in the hundreds of millions of dollars. In addition, Everest itself is expected to contribute US$150 million a year in savings and productivity increases, Masada says. “What Everest does is make sure that the IT investments go towards projects that earn the company the most money,” he says.

Successfully managing megaprojects 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 billion-dollar-plus projects, such as deep-water construction, but has been adapted to ICT.

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 — don’t always set ICT priorities that are optimum 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 Energy Insights, a subsidiary of analyst firm IDC, says Chevron’s ICT initiatives appear to be aimed at closing gaps that exist at some of the largest energy companies. Those gaps include disconnects among the scientific and engineering systems and the people upstream in exploration and production; the systems and people downstream in refining, marketing and transportation; and corporate-level staff who want to see everything that goes on.

Chevron has recently begun work on its third Global Information Link project. GIL 1 standardised desktops, laptops and operating systems;

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 ICT standards are adhered to. That includes the adoption of ITIL standards for the management of ICT operations.

GIL 3 will employ 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. With it, employees will be able 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 how users tag information before storage and how people collaborate with one another.

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

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