Business Intelligence As A Tool To Maximize Profits In Oil And Gas Company Business Essay

Published:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Objective (Industry over view, BI summary)

I have chosen this topic because the decisions made in oil and gas companies have a huge impact on global economy and overall environment. Requirements of the developed economy for liquid natural gas and oil - both as fuel and as in raw materials for the chemical industry is steadily increasing. Demand lifting has led to sharp increase in the prices for oil and for hydrocarbon raw materials as a whole, which has caused increase in extraction of these products in all countries possessing deposits of hydrocarbons. The oil and gas sector became the main donor of financial resources for the state budget of the country. This topic will cover how Business Intelligence (BI) tools support management to consolidate procedures and to maximize profits, through cutting costs and data integration. BI along with data warehouses and business analytics represent that toolkit which allows oil & gas companies to take a maximum of the information from the available primary data, to reveal the basic trends and to construct forecasting models, i.e., finally, to transform the available company data into a source of additional profit. In addition to BI, terms like business performance management (BPM), business process management (also BPM), corporate performance management (CPM), and business activity monitoring (BAM), have also emerged. All of these are a part of BI. They are all dependent on BI tools, but it should be noted that BI is not dependent on them.

In my understanding BI-projects need to be considered not only as object of reduction of expenses, but also as the tool of development which can bring profit to company. Functions of analytics and forecasting which are intended for the decision of strategic questions, will help to place priorities during crisis time, to define principal causes of expenses and potential sources of growth. Having found out them such company can work over deduction of favourable clients and increase of profitableness of business at the expense of attraction of the new. Only with the help of BI it is possible to carry out forecasting of situation, setting different conditions and receiving results of forecasts depending on the set parameters.

The primary application of BI in oil and gas companies is to help management consolidate operations and cut costs. The basic goals have been to shorten the time required to create reports and analyses, improve the accuracy of information and create a single information repository. The most common application areas for BI have been to provide financial reports and analyses, and support business operations with a special focus on ERP. In our days the modern large oil and gas companies represent vertically integrated companies. Vertical integration describes the ownership or control by a firm of different stages of the production process, e.g., petroleum refining firms owning "downstream" the terminal storage and retail gasoline distribution facilities and "upstream" the crude oil field wells and transportation pipelines. It can be achieved through M&A (mergers and acquisitions) or investment. Upstream is a term which describes the exploration and production sectors within the oil and gas industry. Downstream, in the context of the oil and gas industry, applies to the refining and marketing sectors of the industry. Oil and gas products are commodities and are, therefore, competitive based on price. This makes the industry cost-conscious and highly dependent upon the price of crude oil, the basic business driver in the industry and the raw material for production (Skriletz, 2002).

Purpose of the research

The increased requirements to efficiency and quality of accepted decisions at all levels of operations in oil & gas companies leads to finding of decision-making support techniques. It assumes possession of the actual universal information on a condition and tendencies of development of business by methods and BI means. Thus the volume of the information which is necessary for considering for formation of optimum well-founded decisions steadily grows. It leads to a situation when it becomes effectively impossible to operate the company without use of modern means of information support. Transactional data is good for keeping track of what is happening in an organization, but is not well suited to finding out why things are happening or predicting future performance. In other words, after years of putting potentially valuable financial data into your corporate databases, it is now time to put the tools in place to get the data out of the same systems and organize it in useful ways to support the decision-making process.

The purpose of the research is to show that BI is such a tool which gives the chance to the organisations to transform the accumulated data in the information on business, and then the information into additional source of profit. The research question is how the value of BI should be considered in the context of profitable business action. BI has become an expected business competency for improving decision-making effectiveness. Leading enterprises are establishing competency in aspects of BI such as decision modelling and support so that all workers, managers and executives can take the most effective action in a given business situation. Lacking worthy BI tools oil companies risks to stay competitive or even to sustain in a business.

What is more I want to apply my research outcomes in KMG, the problem is that BI is not so developed in Kazakhstan, so I hope my knowledge will be gainful to my company as employer and to me as employee.

Literature

There is currently enough media attention focusing on this subject and about this topic. A majority of these can be found in IT magazines, newspaper articles and on the internet, but the credibility of these sources is questionable. They can also be written by people who don't know a lot about the subject and have formed an opinion based on minimum information. IT magazines articles are often written in a biased way in terms of being in favour of one vendor, such as company propaganda or from the point of view of the writer. This data can be misleading, articles written by Gartner and TDWI analysts have more credibility and raise important questions and viewpoints which I believe should be considered in my report. Below is the list of books and resources I am willing to use during my research:

The Profit Impact of Business Intelligence (2007), Williams S., Williams N.. Morgam Kaufmann Publishers

This book contains plenty of mini-cases and useful information for my project.

Business Intelligence, The Savvy Manager's Guide (2009), D.Loshin, Morgan Kaufmann Publishers

This book provides a knowledge base for the decision makers to determine the value of integrating BI into the company. In this book I want to look at the modern view of the collection and integration of transactional and reference data as a valuable resource that can be used for analytical purposes.

BI Success Factors: Tools for Aligning your Business in the Global Economy (2009), O.Parr Rud, John Wiley & Sons

Financial BI : Trends, Technology, Software Selection and Implementation (2002), Nils Rasmussen, Paul S. Goldy, Per O. Solli, Publisher: John Wiley & Sons; 1 edition

This book will help me to review how managers can quickly and easily analyse the financial data in the corporate databases in order to be able to make more intelligent decisions about the future. Consequently it will help me to analyse the impact of BI financial tools.

TDWI Best Practices Reports Series

This series is designed to educate technical and business professionals about new BI technologies, concepts, or approaches that address a significant problem or issue. Research for the reports is conducted via interviews with industry experts and leading-edge user companies and is supplemented by surveys of BI professionals.

Gartner Inc.

Gartner source is the most comprehensive collection of analysis and advice for the users and vendors of technology.

Methodology

In my research I want to follow multi -method, which will contain:

Interview: To get more practical point of view I am going to interview those who work on implementation of BI tools and use SAP-ERP in gas transportation, to be more precise financial department in KazMunayGas and KazTransGas. KazMunayGas is the state-owned oil and gas company of Kazakhstan and KazTransGas one of KazMunayGaz subsidiaries responsible for gas transportation.

Trend analysis: Phenomena that are or have been in the process of change are examined to identify and report the directions of trends and to make interpretations and forecasts.

Literature: As I mentioned previously

Qualitative data sources (TDWI and Gartner) will contain different cases in my research. Conducting qualitative research requires an 'open' attitude in order to understand how others experience their situation. Qualitative research is characterised by the fact that the researcher works on the basis of an open question

Qualitative research represents the general name for a group of investigative procedures with common characteristics. Also, qualitative research is empirical in the same sense as other recognized forms of scientific inquiry. It relies on observation.

Qualitative research encompasses several forms of the investigation. They all share this characteristic: The data used do not accommodate readily to quantification, specification, objectification, or classification. Because of that, common statistical procedures cannot be used for data display or analysis. Typical of such data might be reports of participant observation or the texts of in-depth and relatively unstructured interviews.

Project plan and schedule

Writing Services

Essay Writing
Service

Find out how the very best essay writing service can help you accomplish more and achieve higher marks today.

Assignment Writing Service

From complicated assignments to tricky tasks, our experts can tackle virtually any question thrown at them.

Dissertation Writing Service

A dissertation (also known as a thesis or research project) is probably the most important piece of work for any student! From full dissertations to individual chapters, we’re on hand to support you.

Coursework Writing Service

Our expert qualified writers can help you get your coursework right first time, every time.

Dissertation Proposal Service

The first step to completing a dissertation is to create a proposal that talks about what you wish to do. Our experts can design suitable methodologies - perfect to help you get started with a dissertation.

Report Writing
Service

Reports for any audience. Perfectly structured, professionally written, and tailored to suit your exact requirements.

Essay Skeleton Answer Service

If you’re just looking for some help to get started on an essay, our outline service provides you with a perfect essay plan.

Marking & Proofreading Service

Not sure if your work is hitting the mark? Struggling to get feedback from your lecturer? Our premium marking service was created just for you - get the feedback you deserve now.

Exam Revision
Service

Exams can be one of the most stressful experiences you’ll ever have! Revision is key, and we’re here to help. With custom created revision notes and exam answers, you’ll never feel underprepared again.