Information Systems Portfolio Project - ExxonMobil - Case Study Example

Information Systems Portfolio Project Introduction Public held corporations are companies that have their shares being trade in the stock exchange. The public corporation under study is the Exxon Mobil Corporation. It is the parent company of Mobil, Esso, and ExxonMobil companies. They are the world’s largest publicly traded oil and gas company providing the energy that aids in the underpin growing economies and improve the standards of living around the world. This is because they utilize innovation, up to date technology so as to deliver energy to the world more efficiently. ExxonMobil markets its products around the globe under the brands of Mobil, Esso, and Exxon. It is further functionally organized into a number of global operating divisions namely upstream based in Houston which incorporates exploration of oil, extraction, shipping, and wholesale operations. Down stream which is involved in refining, marketing, and retail operations all based in Fairfax Virginia. Finally is the chemical division also in Houston. Their organizational structure is built on the concept of global businesses and it is actually designed to allow the ExxonMobil to effectively compete to the ever dynamic and challenging energy industry. So as to reach the global market, the utilization of information technology is paramount. Being the largest publicly trading international gas and oil company, it utilizes innovation and technology to meet the world’s ever growing demand for energy. Producing 3% and 2% of the world’s oil and energy respectively, the ExxonMobil like other oil companies are struggling to find new sources of oil. This is because they replace only 95 percent of the volume of oil it pumps contrast to natural gas where it replaces 158 percent by volume through purchases (Vassiliou, 2009). Discussion People, information, and information technology ExxonMobil Information Technology (EMIT) usually has its collaboration with the corporation’s lines of business so as o deliver cutting edge IT solutions. This enables them to realize superior results in finding, production, processing, and marketing of gas, oil, and other chemical products. The organization has been experiencing technology synergies in the recent times. This is because in the upstream ExxonMobil owns propriety technologies in the areas of heavy oils, arctic and deep water operations, the processing of gas-to-liquid, and high strength steel. On the down stream, their propriety technology is focused of chemical catalyst and refining. According to Irving (2013) argues that, since the company is involved in the exploration, production, and sell of crude oil, petroleum products natural gas, the embracing of information technology is important. This is because IT helps in realization of the organizations goals and objectives. With ever increasing demand for energy Exxon Mobil has recently initiated the Telok natural gas project. This is to be done to meet the demand for natural gas in the peninsular Malaysia. The project if completed would comprise of two unmanned four-legged gas satellite platforms. The organization has incorporated the following IT programs namely: marketing point of sale which uses tandem technologies; price support system that uses client server based technologies like Brio and SQLserver; state of the art call centers that also uses client server based technologies; global access administration that utilizes client server and web based technologies; developing of e commerce applications and electronic management systems; enhanced various client sever based human resource applications; enterprise business systems that uses client server based corporate applications (Joia, 2008). Porter’s Five Forces Model According to Ahlstrom and Bruton (2009) argue that the five forces influences profitability as they affect the costs, prices, and capital investment that is essential for survival and competition in industry. First is threat of new potential entrants; this is actually not a problem o the industry as it has cultivated tremendous revenues from its markets. New entrants into the business increase the industry capacity beginning a competition for the market share and lowering current costs. Entry of new competitors is a function of entry barriers. They include like in the oil industry economies of scale, brand loyalty, ease of distribution. Threat of substitute product/services also offers competition. They include wind energy, hydroelectric power, and solar power. This affects the market share and reduces revenue collection. This is because substitutes pose a ceiling on the industry’s potential return by putting a setting limit on the prices that the company can charge for their products. Like in the energy sector the lesser the substitutes the greater the profits (Hill & Jones, 2009). Bargaining power of suppliers refers to the ability of the suppliers to increase the prices of the inputs like labour and raw materials. Strong suppliers extract profits by increasing costs of firm in the industry. The products of suppliers are unique, have less substitutes, and high switching costs. As a result they pose a credible threat to forward integration. Bargaining power of buyers refers to the ability of the buyers to bargain down the prices that the firm is charging. Strong buyers like in the oil and gas sector extract profits by purchasing in large quantities because they have full information regarding the product, thus a threat to backward integration. According to Hill and Jones (2009) they assert that rivalry among current competitors leads to the firms competing for the market share. This poses great challenge to profitability. Rivalry may be as a result of factors like presence of global customers, demand conditions, competitive structure of the industry, and absence extent of exit barriers. Use of supply chain management systems, enterprise resource planning systems, and customer relationship management systems Supply chain management According to Van Weele (2009) argue the supply chain management ensures strategic partnerships with suppliers, strategic optimization of the network, strategy on where-to-make and make the decisions of buying, and lastly alignment of the overall organizational strategy with supply strategy. The primary activities of a supply chain include operations, inbound logistics, and outbound logistics. Support activities include firm infrastructure, HRM, technology development, and procurement. Management of the supply chain addresses the following problems: configuration of the distribution network which include production facilities, number, distribution centers; the strategy of distribution by ensuring centralized or decentralized control of operations; tackling the problems associated with trade offs in the logistical activities; information to be integrated through the supply chain; management of the inventory; finally cash flow activities to be efficient by arranging the terms of payment and methodologies for exchanging funds. Enterprise resource planning systems For many companies Enterprise Resource Planning (ERP) to do most of their activities. This is because ERP is the backbone of the organization and heart of operations. ERP systems merge the key operations of the company like manufacturing, finance, distribution, and customer relation departments into one software system (Grabski, Leech, & Sangster, 2010). Therefore, the ERP software revitalizes a business by synchronizing and streamlining its separate departments into one unified, precise and easily to handle software system. Customer relationships management systems (CRM) The main function of CRM is to increase profits like any other initiative of the organization. This mainly attained by providing a better service to the customers than your competitors. A good CRM would reduce costs, wastage, and complaints thus reducing staff stress. In addition, it enables instant market research, customer rate of churning reduces, customers stay with you longer, highlights poor operational processes, and finally long term profitability and sustainability (Finnegan, Willcocks, & Willcocks, 2008). CRM can be regarded as a process, which has: identifiable inputs; identifiable components; identifiable characteristics, which defines the CRM for your organization and customer base; the capacity for improvement and gear towards evolution over time. CRM can have a major impact on any organization through: shifting of focus from the product to customer; streamlining offers to what the customer need, and not what the organization can make; highlighting competencies that required for an effective CRM process. Database management system and a data warehouse Database Management Systems (DBMS) is a collection of programs that would enable you to store, modify, and later extract the information from a data base. There are various different types of DBMS that range from the small systems that run on personal computers to large systems that run on main frames. This is actually in place at the ExxonMobil where they have embraced ICT in almost all the department from procurement, finance, marketing to computerized inventory systems. However, there is need to incorporate and improve the following to their DBMS which include; Internet security, transaction processing, object-oriented databases, and XML data management. Throughout, it has been noted that there is need to revise and expand to reflect on the new SQL: 1999 standard, including all those extensions that support multimedia data, spatial data, object-relational databases, recursive queries, OLAP, and SQL-J (Gehrke & Ramakrishan, 2007). Data warehousing emphasizes on standardizing, organizing, and formatting facts in a way that we can actually derive information from them. The major objective of any data warehouse is to integrate data from the disparate sources into a centralized store, where all that data can be utilized across the enterprise for supporting decisions. With ExxonMobil Corporation being a global trader, there is need to have a data warehouse because they copy data from various databases. For small to medium data warehouse, the Microsoft SQL server is a software solution. This is because it supports all data life cycles from cleansing, loading to analysis and reporting. According to Bandarupali (2010) he argues that data warehousing aids in lowering of costs, save time, and also reduce risk with Microsoft SQL Server 2012. Most of the operations in the ExxonMobil corporation were relying on client based server technologies and the SQL servers. Data ware housing involves database, Extraction Transformation and Loading (ETL), OLAP, reporting, and metadata. Four agent‐based technologies They are utilized by the ExxonMobil Corporation to create systems that are situated in dynamic and open environments. This is to enable them to adapt to these environments and being able of incorporating autonomous and self-interested components. The agent based technologies used have improved operational robustness with intelligent failure recovery. As a result, it has reduced the cost of sourcing costs by computing the most beneficial acquisition policies that are on online market therefore, improving the efficiency of manufacturing processes in the dynamic environments. In particular, the outstanding characteristic of dynamic in which for example, systems that are heterogonous must span, interact, organizational boundaries and effectively operate within the rapidly changing circumstances in the energy industry and with the dramatically increasing quantities of available information (Klaus, Jörg, & James, 2007). E‐commerce business models ExxonMobil utilizes merchant e-business model an online version of the local store. This is because the organization accepts online payment methods and ships the merchandise to the customer. They also use a third party online and ware housing service. The companies store and ship the goods directly to the customer. They models include, brokerage e-business model which brings together two parties to conduct business online. An example is online auctions like Ebay. They collect the fee for their services which is worked out on a percentage base. ExxonMobil uses information e-business model, where it is based largely on specialized information on a particular subject in relation gas, oil, and petroleum products. These websites attract a large following of people interested in the aforementioned products field of knowledge thereby; will utilize e-commerce business models, instead of their specialized information to create revenue. The combination of the above models makes the organization to reach a wider customer base. This has enabled the Exxon Mobil to operate in 200 nations and territories depicting how the corporation is large and powerful due to its integration of business models (Pride, Hughes, & Kapoor, 2006). Benefits of the organization using the systems development life cycle (SDLC) The benefits of using SDLC are that it allows for the creation of system specification model that allows for cost and schedule of the system to be known. It provides extensive documentation for companies that require such documentation and has been utilizing computers in their operations. They provide a review mechanism that is straight forward that enables the user to assess and monitor the progress, performance, and budget status of a project. It also involves frequent reporting to the top management. Besides, it furnishes the management with an understanding of the objectives of the system, concepts, and outputs of the project. Ensure efficient and correct processing within schema development. Provide a convenient reference for systems programmers and analysts. SDLC provides material for training. Finally, it serves as an aid for the review of standards established in relation to the project (Oz, 2008). The type of projects that utilized the SDLC were setting up of the Telok natural gas project, expansion of the organization to new territories, financial sector, stock, recruitment of new employees. Phases of business continuity planning Lack of having a business plan on preparedness especially in the manufacturing industry, it jeopardizes critical good’s delivery that are dependant on complex supply chain systems. The phases include: Initial response, initial response of an organization to business interruption; relocation recovery where there is equipment relocation, resource mobilization and personnel to alternative sites; recovery, primary facilities have been restored and secured after being relocated to the alternative site; restoration where there is resumption of normal service (Hiles, 2010). All the above processes are experienced if they are oil and gas leaks to the environment, accidents occurring in the drilling process. Business continuity plan helps to ensure that the business has the resources and information required to deal with an emergency. Other benefits comprise of: enhancement of the business image with the employees, customers and shareholders by demonstrating a proactive attitude; Improve the overall efficiency in the organization; it identifies the relationship of assets both financial and human resources with respect to the critical services and deliverables. Organizations use of emerging trends like Wi-Fi, Bluetooth, cell phones, and RFID The organization could embrace the 21st century technologies by embracing the use of Wi-Fi, mobile phones, and the use of Bluetooth. This is because there is an increasing population that is techno survy, this would further the online business as more and more people have access to mobile phones. With the growing population having smart phones there is a necessity that meetings between the management and the shareholders is going to be held through skype and other like applications. Mobile phones are continuously being used as financial transaction devices (Pasqua & Elkin, 2012). Wireless communications, including fields like mobile entertainment, RFID, mobile banking and the cell phone service, continues to be one of the hottest sectors in the Information technology market. There was an estimated 5.9 billion global cellular communications subscriber by the late 2011. Therefore, if the organization embraces this technology it bound to reach almost 6billion customers. This in turn would increase turn over of the business. Information protection from security vulnerabilities So as to ensure security of data and information, the IS should assigned security apparatus like modifying some programs that could detect fraud during auditing, use of back up and recovery programs. Every organization that is utilizing IS should erect in place the security measures to protect the loss of essential data and information through: Applying all the software/operating systems (Windows, Linux, etc) patches; properly installing network firewall and configuring the software security settings; installing the latest anti-virus software and fully scanning the whole system for presence of any viruses; correctly setting up the backup routine, installing the backup device, and software; fully testing the backup files and be 100 percent sure that the backup can be easily restored in case of emergency. Conclusion Information systems (IS) have played a major role in making sure the success of virtually all organizations in government, business, and defense. Moreover, awareness has also increased that such that success is dependent on the correct functioning and availability of large scale networked information systems that involve extensive complexity. Consequently, the SDLC model has become the context for further development of the information systems development requirements that geared towards system survivability (i.e., the end products that survive). Information system is a major tool for creation of new products, services and business models. Next, it improves making of decisions by managers as they are bound not to be affected by the effects of forecasts, guesses which may lead to overproduction, underproduction of services and goods, and poor response at particular times (Laudon & Laudon, 2009). This raises the costs and also customers can be lost. Leads to having a competitive advantage by having good structures geared towards operational excellence through new business models, products and services in addition to ensuring business survival through customer supplier intimacy. This raises profits and revenue of the organization with better communication networks to suppliers. Reference List Ahlstrom, D., & Bruton, G. D. (2009). Porter’s Five Forces Model of Competition. New York: Routledge. Bandarupalli, K. (2010, August 22). Retrieved March 19, 2013, from Importance of Data Warehousing and its Design: http://www.techbubbles.com/sql-server/importance-of-data-warehousing-and-its-design/ Finnegan, D., Willcocks, L. P., & Willcocks, L. (2008). Implementing CRM :From Technology to Knowledge. Hoboken: John Wiley & Sons publishers. Gehrke, J., & Ramakrishan, R. (2007). Database Management Sytems. New York: Sage . Grabski, S., Leech, S., & Sangster, A. (2010). Mnamagement Accounting in Enterprise Resource Planning Systems. Jordan Hill, Oxford: Butterworth-Heinemann. Hiles, A. (2010). A definative Handbook for Business Continuity Management. New York: John Wiley publishers. Hill, C., & Jones, G. R. (2009). Strategic Management Theory: An Intergrated Approach . Belmont: Cengage Brain. Irving. (2013, March 11). Retrieved March 19, 2013, from ExxonMobil Starts Production From Telok Gas Field. Joia, L. A. (2008). Strategies for Information Technology and Intelectual Capital. Hershey: Idea Group Inc. Klaus, F., Jörg, M., & James, O. (2007, August 8). Retrieved March 19, 2013, from The agen base technology: http://www.springer.com/business+%26+management/business+information Laudon, K. C., & Laudon, J. P. (2009). Management information systems:organization and technology in the networked enterprise. London: Prentice Hall. Oz, E. (2008). Mnagement Information System. Boston, Massachussets: Cengage Learning. Pasqua, R., & Elkin, N. (2012). Mobile Marketing. Indianapolis, Indiana: John Wiley & Sons publishers. Pride, W. M., Hughes, R., & Kapoor, J. R. (2006). Business. Belmont: Cengage Learning. VanWeele, A. (2009). Purchasing and Supply Chain Management: Analysis, Strategy, Planning Belmont: Cengage Learning. Vassiliou, M. (2009). Historical Dictionary of the Petroleum Industry. MD: Scarecrow Press. Read More