Bp (oil and Chemical Company) and Its E-Commerce Arm

"A report on BP (Oil and Chemical company) and its E-commerce Arm"

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Introduction to BP

Several questions arise if we are given the possibility that an oil exploring company wants to use e-commerce for its B2B and B2C operations. These open-ended questions are well replied to by BP’s �digital business program’ which has been globally recognized for its present and future initiatives. Before we critically analyze BP’s e-commerce operations I would like to briefly outline BP’s position in the world market.

BP Amoco (now known as BP) is one of the largest most integrated oil companies in the world. Operating in more than 100 counties, in six continents and serving 10 million customers every day throughout the world. The companies’ main activities are exploration and production of crude oil and natural gases; refining, marketing, supply and transportation; solar power manufacturing and marketing of petrochemicals. BP acquired Arco and merged with Amoco to become one of the most strategic businesses in the energy industry. Its annual sales are estimated at 25 million tonnes of petrochemicals, specialties and fabricated products worldwide, creating an annual turnover of nearly $101 billion in 1998-1999.

BP always understood that market efficiency and success required articulate technology and the corresponding use of e-commerce. In July 1999, Sir John Browne CEO embarked on the mission of the digital transformation of BP. He was quoted as saying, " We needed to respond to the new opportunities presented by digital business and perhaps even more importantly, tackle the challenges presented by the new players in the marketplace." Other energy players had already launched their virtual business operations like Houstonstreet.com, Utility.com, Enrononline.com and Scottish Power. BP needed to catch up with its competitors. Expectations surrounding the ability of �bricks and mortar’ companies to create value-added resourcefulness to their businesses through e-commerce rose sharply in 1999 and BP with the help of its already existing Virtual Private Network set focus on its eBusiness venture.

BP’s Virtual Private Network (VPN) and its Intranet.

BP’s IT structure is very flexible. It has a de-layered hierarchical computing model which does not use the �networkcentric’ model of computing. Instead the network structure includes more than 110 business units who are each responsible for their own profit and loss functions. This plug and play network does not burden IT costs and gives leverage to further expansion and adaptation. Knowledge management is considered key within the IT structure of BP. Infact they use streaming video and 3-D multimedia technology which allows people to interpret and analyse information much more powerfully. Although this technology isn’t effectively usable throughout the world yet its induction into BP gives the network a required boost against its competitors.

BP’s VPN (Virtual Private Network) is also based on the same principle, i.e. Business units should derive value from sharing knowledge, through interaction. The aim of BP’s network is to allow people to co-operate and share knowledge quickly and easily, regardless of time, distance and organizational boundaries. They do this through various electronic components and homepages, which essentially serve every kind of purpose. By July 2000, there were nearly 100,000’s of pages on BP’s Intranet and these pages have a wealth of information on projects, drilling information, performance agendas, human resource operations, idea exchange programs and current projects. The Intranet also uses electronic yellow pages that help to list interests, expertise and experiences that help BP employees to get in touch with someone sharing their interests and hence help the 'knowledge management process'. Today the VPN connects over 80,000 employees at 1,200 sites and facilitates the company’s e-business also transacts with partners, customers and contractors and links teams working in the Gulf of Mexico, Shetland Islands, Scotland and Indonesia. BP also extended its membership to Shell and Brown and Root who joined in the network to assist one another and effectively benefit from cost reduction and knowledge management. Infact during a recent development of the Andrew oil field in the North Sea, BP used the VPN to pass on lessons on the project in real time. This network helped BP and its suppliers and contractors to radically cut costs and time of the project. BP in Alaska and Colombia also used similar techniques.

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