Just the facts

Oil and gas producer Al Khafji Joint Operations has recently added business intelligence to its system to cut down on reports and help the firm plot its future business course. Imthishan Giado reports.

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By  Imthishan Giado Published  December 29, 2007

Oil and gas producer Al Khafji Joint Operations (KJO) a joint venture between Aramco Gulf Operations and the Kuwait Gulf Oil Company, has implemented Cognos Performance Management with the aim of cutting down on the time required to generate reports from its various departments.

Mutlaq Al-Khodhair, KJO's manager of corporate planning, says that the firm previously relied on a system inherited from the Arabian Oil Company, which ran construction in the area before the arrival of KJO: "We have purchased and implemented Cognos performance management in 2006. In 2007 we successfully implemented the budget module as part of our 2008-2012 business plans. We are maybe the first oil company in this region that has implemented Cognos as part of our performance, preparation and budgeting processes."

At present, the company relies on a patchwork of products from a variety of vendors, including a SAP ERP system. This is set to change next year when KJO will implement the full range of SAP modules with Cognos running on top. A total of 120 employees in KJO's IT team administer 1500 users over a wide expanse of territory including onshore, offshore and telecommunications operations.

The project first began in early 2006, when Al-Khodair, dissatisfied with the level of reporting he was receiving within KJO, began evaluating proposals from a number of business intelligence vendors. He eventually selected Cognos from Dubai-based Almasa.

"We started with the performance management, balance scorecard, KPIs, performance and preparation of business plans, monthly, quarterly and year end reports. It has been very successful, shortening the time taken for preparation of the business plan by one month," he says.

Al-Khodair cites the long delays in generating reports as one of the key drivers behind his planning department's decision to implement Cognos at KJO. Another report issue was the need to cut down the excessive size of the existing management reports.

"We found some of the reports from the departments could reach 25-30 pages - it was really not necessary for executive management to review all of it. Now we have designed a template for each department, saying what management really needs from them to know. With management requesting that reports must be out by the 20th of the following month, the only way to do that, really, is to look for business intelligence that can help us in this," says Al-Khodair.

With an implementation like business intelligence, says Al-Khodair, ROI cannot be measured using traditional metrics: "ROI on such software is the optimised time. You're not going to get any money out of it but what you are getting there is correct data and involvement of the departments in what you are reporting - because they have to do all the analysis and justification for management.

"Awareness has improved among all the departments because everyone, not just planning, now shares the responsibility for what is being reported," he continues.

Before settling on Cognos, KJO conducted an extensive survey of business intelligence providers, including meeting Hyperion in the UK, and a third vendor.

"We were looking for improvement of performance reporting, balance scorecard, KPIs and monthly, quarterly and accountability reports. Almasa in Dubai gave us the infrastructure and people who can really design to meet our requirements. The need to be SAP compatible was also one of the issues we evaluated," he explains.

Hyperion and Cognos looked virtually the same to KJO - but Al-Khodair says the key differentiator was regional support: "We found that Cognos have an established office and facilities in Dubai. Even right, when we have any questions or problems, they can get into our server through VPN. correct the report and issue it immediately."

"By evaluating their costs, support - this is mainly what we were looking at - we found that the Cognos business intelligence is the best suited to our work. We didn't go full scale but took it step by step to make the people aware of how to use Cognos, make it friendly. This is the environment that we have to work on, make people believe in it. It's not like software you buy and forget about it," says Al-Khodair.

The timeline for the implementation began in 2005, when KJO first started discussing the need to improve the performance management system.

"We visited all three vendors, then made a presentation to management, who supported our idea, and signed a contract with Almasa in early 2006. Design and process mapping was completed by mid 2006 and we began issuing reports in July 2006," he says.

Al-Khodair adds that the budgeting module was implemented in an equally smooth fashion: "In January we started to design the budgeting element of Cognos. We fully integrated it with SAP, extracted the data from SAP and dumped the budget data into SAP to make people use it more quickly. That was finalised in May after taking about three months."

Post implementation, Al-Khodair believes the major challenge has been finding qualified people to work on the system: "Our company has many people who don't have good experience with IT. So to select and train the people, make them aware how the system can help them was a major challenge for us."

Al-Khodair says KJO's management has been particularly impressed by the speed, accuracy - and most importantly, brevity - of report generation.

"Previously we were gathering the information through Excel sheets, with many mistakes. The project reporting was also big non-standardised documents that you didn't really want to read.

"When we brought Cognos, we have standardised both the forms and the percentage completion. So when we say 5% for a capital project, it means we are at that stage, when previously it was subject to department interpretation," he says.

Future plans for Al-Khodair include upgrading to version 8 of Cognos, as well as moving to a complete implementation of SAP: "Right now we are working with the SAP team and will of course, also require integration with Cognos so we can get information about the material stock, invoice processing and spending, which we are not getting right now. But we will surely improve our area of reporting and highlight risks earlier in the year, rather than waiting until the end of the year where we don't have time to take correct action."

"Imagine that we have finished our business plan in May and were able to finalise it in the first week of July! This is the beauty of the system that we have this year," he finishes.

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