Optimising bp’s workflows with digital transformation
bp has set out a new strategy to transform from an International Oil Company to an Integrated Energy Company focused on delivering solutions for customers. This is a major, necessary step in support of the company’s purpose to reimagine energy for people and the planet, and its ambition to become a net zero company by 2050 or sooner and help the world get to net zero. After more than a century defined by oil and gas, bp set out a strategy to become a very different energy company in the next decade.
So what does it take for an organisation with a rich heritage to remain ahead of the game today? One of the answers is digital transformation. Nick Wright, bp’s global director of digital and innovation sourcing is a strong advocate of transformation for efficiency. He says the focus for his area of the organisation is sourcing complex or innovative technology deals in support of bp’s strategy. Nick states: “Transformation isn’t just a change in process, for an organisation like bp that has years of legacy systems behind it, it becomes more of a mindset shift. There is a sense of reimagined purpose, given our intentions to move from traditional oil and gas to clean energy, and to fulfill that purpose, it is important to transform and lead through innovation.”
Vipin Radhakirshnan , bp’s vice president for digital solutions & transformation, adds: “[This is] a common theme for the entire industry, but bp in particular believes digital transformation efforts are underpinned by the organisation's need and want to reinvent itself.” He further adds that the organisation functions on a ‘transformation as usual’ principle which is essential to keep pace with the ever-evolving technology landscape and user demands. Vipin is responsible for the full scale of work from transformation strategy to execution. In his role, Vipin oversees the adaptation of digital solutions for finance, customer and procurement processes, which includes key areas like data, insights and analytics, business process management, intelligent automation and enabling solutions.
This holistic approach to transformation helps different areas of the business in understanding the full scope of the problem and building an infrastructure to solve it. Vipin adds “It is really a combination of enablers that are unique because you have everything from data, process automation and technology solutions enabling transformation strategy and delivery.”
The other key factor when it comes to transformation at bp is the approach. According to Vipin, it is a good blend of a top-down and bottom-up approach. “A bottom-up approach simply means tapping into the pain points of the business to get an idea of the problems faced and how they can be transformed,” explains Vipin. “On the other hand, a top-down approach would mean setting broader business transformation goals and outcomes and looking at processes end-to-end so that teams don’t just get stuck at the problem-solving level, but instead get a head start on innovating the business of the future.”
Speaking of some of the drivers that led to transformation at bp, a need-based purpose is prevalent. The organisation strives to meet customer needs - both B2B and B2C, attune to the needs of the emerging market while serving bp’s internal ambition of reinventing themselves and finally, adapt to the needs of the customer landscape that is progressively changing. As procurement is a large and collaboration-oriented business enabler at bp, their strategy has understandably been driven by transformation.
Procurement workflows can be quite cumbersome and require a colossal amount of historical and comparative data that is traditionally manually studied to govern processes. This explains why digital transformation has been crucial to decision-making, where both real-time analytics and historical data is available at hand, thereby reducing the need for manual synthesising of information. bp is in the process of evaluating all our existing procurement vendor engagements as part of a wider procurement transformation initiative.
A good example of an improved workflow is the contract negotiation process. Traditionally, procurement officers would spend weeks if not months reviewing documents, negotiating contracts and running tenders, however with the collaboration from digitally native vendors, bp has essentially taken work out of the system and negotiated better deals over time. “The value of working with new suppliers is that it takes work out of the system by delivering a scope that was previously resource intensive, using real-time data to make accurate decisions. Essentially, we’re using our history to determine our future,” adds Nick.
To support bp’s customer-centric approach, bp’s procurement and sourcing teams are pivoting to reflect the company’s strategy. This can mean partnering with suppliers to co-develop products to meet new business challenges.
With sustainability as a long-term goal, within 10 years, bp aims to have increased its annual low carbon investment 10-fold to around $5 billion a year, building out an integrated portfolio of low carbon technologies, whilst over the same period, bp’s oil and gas production is expected to reduce by at least one million barrels of oil equivalent a day, or 40%, from 2019 levels. Its remaining hydrocarbon portfolio is expected to be more cost and carbon resilient. These are ambitious goals, and to be able to achieve them while keeping everybody’s best interests at heart, the organisation needs to adopt an agile mindset.
Long-term goals aside, bp employees are working at constantly reinventing processes and focusing on incremental gains. Coupled with this agile mindset is the need to have a digital outlook – listening to the voice of the customer and improving along the way.
And lastly, having a growth mindset both internally and externally, allowing the organisation as well as its partners to grow beyond factors such as cost and time. To this, Nick adds “We used to be supply-led, meaning we had a commodity and we would release that to the market and that's our bread and butter. But as we reinvented ourselves and created a more digital organisation, we became demand-led, listening to the needs of our customers, regions, cities and the wider society.”
Nick’s leadership style is also a testament of his commitment to growth, and he nurtures a culture of incremental learning within his department. Nick’s teams are encouraged to learn from experimentation and celebrate their failures, rather than slowly applying tried and tested measures. He believes in providing continuous cycles of feedback and that a minimal viable product that's imperfect is the way to achieve growth and foster innovation