Hess and CSC Pave the Way for Strategic Growth
Client:Hess Corporation, a leading U.S. energy company.
- Change the role of IT from reactionary to a proactive partner of the business.
- A five-year IT roadmap, consisting of dozens of IT projects and priorities, that is being implemented now.
- A more integrated business and IT strategy that is helping Hess realize its aggressive growth strategy.
Like other energy companies, Hess Corporation is facing increasing demands to produce more without spending more. Hess is the leading independent retail energy marketer on the East Coast of the United States. The company is continually looking for ways to expand both its reach and its revenues.
In 2006, Hess' Marketing & Refining (M&R) division embarked on a new business and IT strategy. Hess selected CSC to work with the M&R Leadership Team (MRLT) to develop a five-year roadmap and IT strategy that would support an equally aggressive business growth strategy.
Determining the business goals
To determine what Hess leadership wanted and needed to accomplish, a steering committee was created, consisting of Hess CIO Jeff Steinhorn, our consultants and MRLT team members representing each of the business units: Retail Marketing, Energy Marketing, Refining, and Supply and Terminals. We worked with Steinhorn and the committee members to gather and analyze the requirements, strategies and goals from each of the Hess business units.
"They were involved throughout the whole IT strategy project with CSC," says Steinhorn. "We were looking to CSC not just for their ability to lead us down a process, but for their advice on business questions as well."
One of the first business strategies to gain consensus was "improved technology." The committee agreed that smart investments in IT would provide many-fold returns. It was up to us to help guide Hess to the right IT solutions.
Another strategy was asset optimization; with capital- and building-intensive assets worth billions of dollars, Hess was seeking to make them more productive and efficient, without building new refineries. Improved customer insight was yet another strategy.
IT strategy tied to business strategy
Once the team identified the business strategies, we worked with it to determine what Hess would need to do from an IT standpoint to support and drive them. It was critical to get consensus within the community about what should be done when, and to help justify the funding.
The committee identified approximately 60 projects and initiatives from the business units to support the IT strategy. Next, Steinhorn and the committee had to prioritize the projects. We were instrumental in not only gathering data, but also building consensus among the committee members about priorities.
The committee looked at several factors. Cost versus benefit was considered, but also how closely the project aligned to Hess's overall business strategies and goals. Also given high priority were foundational building blocks that had to be completed before other projects could be started.
High on the list were integration framework, master data management, technical architecture, and business process architecture initiatives across the IT organization. Other areas given high priority were IT process building block initiatives, such as formalizing the systems development methodology and standardizing the scorecard process with the IT organization. Also included in Year One of the five-year plan were business systems applications projects that would quickly generate benefits, such as e-business applications.
Roadmap complete, time to lay foundation
The IT strategy and roadmap were completed in March 2007, and a few weeks later CSC and Hess began work on implementing the 17 IT projects that composed Year One. To oversee the IT work in the M&R group and ensure that each of the projects stays on schedule, Steinhorn created an IT project management office (PMO), which reports to him and the MRLT. We are involved in the PMO, to help provide methodology and direction and to facilitate communication across the organization.
We have visibility into all the IT activities going on within the organization during this important first year of work, and supports Hess on specific work streams within the projects to provide guidance when needed. For each project, we help Hess select the best solution packages and define the necessary tools and infrastructure, thus ensuring that the solution will provide the required cohesion across the organization.
During the first year of implementing the IT roadmap, we helped Hess M&R build the foundation for the future of both the IT organization and the business overall. As work moves into Year Two and beyond, we continue to collaborate with Hess M&R to select the right technology solutions and methodologies that will pave the way for Hess to realize its business goals.
"We did the strategy first, and we kept a core CSC group on to help us with the implementation," says Steinhorn. "So now CSC is directly involved in the integration framework project, in the data management project and in the PMO."