Challenges Faced By ADNOC

1.Write down the case synopsis.

 

2.Discuss in detail how ERP update could help ADNOC in gaining competitive advantages?

 

3.With reference to the case study, explain the significance of Information Systems in operating business?

 

4.What lessons can be learned from system upgrades based on the case study?

 

 

1.The Abu Dhabi National Oil Company (ADNOC) is the oil company owned by the government of United Arab Emirates (Marjanca, 2010). As per the Journal of Oil and Gas, in 2015, the UAE was announced to have the world’s 7^th biggest established reserves of oil at 97.8 billion barrels. Approximately every reserve is placed in Abu Dhabi. In terms of production, ADNOC is known as the 12^th largest company of oil in the world (ADNOC, 2017). As per the analysis, it has been said that by production and revenue ADNOC Company is the largest energy company in the world. In upstream, midstream and downstream it comprises 16 subsidiary companies. Umm Al Nar and Ruwais are the two oil refineries in which company operates. In the form of LNG (liquefied natural gas) natural gas is exported by the company. Headquarter of ADNOC is situated in Abu Dhabi.

In 2015, Oracle Enterprise Resource Planning 1.2.2.4 was chosen by ADNOC in order to deploy and utilize the platform of the latest technology at the middleware layer and infrastructure. ADNOC has the aim to grow the competencies of the business process for the benefits of the end users and to achieve the UAE smart government vision (Business Chief, 2015). Before implementing ERP company was using SAP so that it can support company in overall business transformation strategy. Due to the aim of getting ahead of the competitors functioning in same industry and fall in the prices of oil, they decided to change their strategies from the top level to lower level. Along with this, it was identified that SAP was costly as compared to ERP.  Therefore company implemented new and latest technology i.e. ERP by replacing SAP.

ADNOC offshore continuously pursues to add worth to ADNOC group by implementing advanced technologies that add worth to its processes and assignments. These comprise smart wells and stimulations, control systems, brownfield monitoring and artificial islands (ADNOC, 2017). The reasons behind selecting Oracle ERP was that it provides relatively less cost than on-premises substitutes, it is a complete resolution for each part of the current ERP puzzle, and it offers a helping hand into the cloud, etc. (Rimini Street, 2018)

In 2013, the “Oracle ERP” upgrade project was started in which more than 40 technical resources were involved from the IT Division of Abu Dhabi National Oil. Along with this, their partners were also involved in this besides 50 main business users for authenticating and enhancing the procedures grounded in the standardization approach.

ADNOC face several challenges during the process of upgrade. Initially it faced the challenge of extracting the information from the system of ERP specifically for the department of finance. This is because of the reason that the data warehouse was generating simple data that cannot be utilized for wide-ranging projects. Additionally, Ease Enterprise Resource Planning incorporation of applications planned for deployment is one more challenge. For instance, getting the country RFID to support in gathering complete details on clients and cars entering ADNOC gas station, comprising fuel types, convenience usage, payment information, capacity, and other services usages like vehicle washes and lubricant changes. The ultimate challenge is to reduce the IT assistance cost and high growing data volumes. The upgraded system was a success for the company because the whole platform was mobile-enabled and modern convenience.

ADNOC has adopted the ERP implementation strategy i.e. clearly describe the necessities before taking action. This strategy can be applicable to every type of business as those businesses who do not keep a tight focus on particular procedures and system necessities will face additional cost and time in the implementation of ERP (Compudata, 2016).

The culture of ADNOC is defined by the enthusiasm, energy, and unwavering passion of the employees of the company. They are more focused towards inventing new solutions, adopting new technologies, raising the standard, and seizing opportunities across whatever they do. This is the reason behind the successful implementation of the ERP upgrade in the company.

2.A wide system of a Company is ERP which combines with the business's primary applications, comprising every levels and area of an organization. Every application in an ERP suite shares a standard data set which is stored in the main database. The aim of ERP is to offer a backbone for the computing business, combining the major process of management and business in order to offer a view of sky-level. A proper ERP system’s implementation helps business in gaining a competitive advantage depending on the company incorporating the ERP system with its own procedures to make it exclusive and the time and cost put in will be balanced by the system’s benefits.

Moreover, if ADNOC incorporates ERP in human resource, sales, and distribution department then it could help them in easily hiring skilled and experienced people to achieve the sales and distribution target in short time duration. This can result in gaining competitive advantage for the company as hiring skilled labor in the competitive market is a major task. The major advantage of implementing the ERP system in the operation of the company that it decreases the operations, administration, and distribution cost by permitting management to handle operations, delays and prevent disturbances, breakdowns information and assist users in making decisions more quickly. In addition to this, the company can improve the quality of the products that are offered to the customers which lead to customer satisfaction and ultimately the company will be able to acquire large market share.

3.Decreasing the errors of human and increasing the efficiency of work are the important goals of the owner of every company. But it cannot be attained without an outstanding information system which is accomplished by offering the information business requires in small time durations. Investing in the information system is important for every organization, and the reasons are:

Organized Data

Managing information is very important for the company like ADNOC which is a well-known brand in the market of UAE. With the help of excellent information system, ADNOC is able to organize all the processes properly, able to get fast solutions and making quick decisions in any situation. The management of the company is able to handle complete data and enhance the business processes execution.

Information Storing

Information systems are suitable when it derives to storing data company needs it in a few years’ time (Willcocks, 2013). For instance, ADNOC maintains all the details of oil and gas and stores it in a data archive. The data archive can be opened and used by the company later when needed. Maintaining the data or information manually on the hard copies and registers is time-consuming. Along with this searching for any data is also time-consuming therefore ERP upgrades are very good and beneficial decision for ADNOC.

4.From the above case study of system upgrades, it can be learned that whether the company is big or small it has to move and change according to the time. As the time is changing there are many innovations and changes in the technology which is very important to update in the processes of the company. Besides this, implementing new and updated technologies helps in saving a lot of time and cost of the company (Kaglik, 2015). The above analysis reflects that Oracle ERP is very much cost effective as compared to other substitutes available in the market. As per ADNOC Company, it is the complete solution for every problem or puzzle because it works as a helping hand. Further, it has been learned that ERP update can help the company in gaining a competitive advantage because of its efficiency in achieving the goals in short time duration and improving the quality of the product.   

References

ADNOC. (2017). Our History. Retrieved from: https://www.adnoc.ae/en/about-us/our-history

ADNOC. (2017). Technology And Engineering. Retrieved from: https://www.adnoc.ae/en/adnoc-offshore

Business Chief. (2015). ADNOC Distribution. Retrieved from: https://middleeast.businesschief.com/ADNOC-Distribution/profiles/18/From-Tank-to-Bank:-Adnoc-Distributions-IT-transformation

Compudata. (2016). Top 10 ERP Implementation Strategies. Retrieved from: https://www.compudata.com/top-10-erp-implementation-strategies/

Kaglik, D. (2015). 5 Reasons To Upgrade Your Erp Solution. Retrieved from: https://www.sapexpert.co.uk/reasons-to-upgrade-erp-solution/

Marjanca. (2010). United Arab Emirates Oil And Gas Competitive Intelligence Report 2010. U.K: Business Monitor International.

Rimini Street. (2018). Why Oracle® Database Customers Choose Independent Support. Retrieved from: https://www.riministreet.com/Documents/Collateral/Rimini-Street-White-Paper-Why-Oracle-Database-Customers-Choose-Independent-Support.pdf

Willcocks, L. (2013). Information management: The evaluation of information systems investments. Germany: Spsringer.