Current Challenges Of Bhp Billiton Information Technology Essay

The Present day world is developing rapidly and there is dynamic nature in technology in the market. Due to this development and dynamic nature of the market, it is difficult and hard for organisation to face the competition and to have competitive edge. Organisations have been increased and the competition has also much increased irrespective of different industries. Information Technology has been playing an important role in driving the business for the past few decades .All the organisations are using Information Technology to developed fast in the market and to have online presence which makes them globalised. Every organisation in the world are making use of Information Technology(IT) to drive their business processes .In order to have competitive edge and growth in the market, the business process has to be aligned with Information technology. Organisation having better alignment of business strategy and IT strategy has attained an growth and competitive edge in the market. Good Alignment between the IT and Business processes is an factor for driving their business growth and to have competitive advantage in the market. Organisations having no better alignment between business and IT have not only lose their competitive edge in the market but also business value.

There are many reasons why alignment is not attained? Organisation structure is one of the important factors responsible for that. Organisation structure plays an important role in achieving business-IT alignment. Every organisation will have their own organisation structure and this structure varies from organisation to organisation .Organisation structure depends upon their business processes and how big the organisation is. Organisation structure is a coordination of all departments and it will tell us that how the business process flow. It is an hierarchy of different departments and how they are arranged and aligned ion the organisation. The other most important factor in having bad alignment is too much emphasises on IT rather than core business. This will have the wrong directionality and will leads to failure of the business. Too much spending on IT rather than core business will leads to have failure of alignment which in further leads to collapse of the organisation growth and business.

Governance is one of the important factor need to be considered for having better business-IT alignment. Having proper governance, good communication channels, scope will drive the business to achieve their goals and objectives. IT function is most important factor in driving business and to have better alignment. Effective IT function will helps the organisation to have better alignment with their business that will drive towards organisation growth. IT function should be responsive that is IT should follow Business processes but not vice-versa and this will definitely will help the organisation to have better business-IT alignment .Communication should be effective in order to have good alignment of business and IT.IT function should be effective and this should be aligned with business goals and objectives but not vice-versa. That is IT should be in harmony or engaged or should be aligned with business for having competitive edge and good position in the market. IT strategy should be engaged with business strategy for achieving good alignment between business and IT.IT strategy tell the organisation how it is designed effectively for supporting the business needs for achieving business goals and objectives of the organisation.

Abstract:

BHP Billiton is a product based company consisting of 40,990 employees as June 2009 is one of the world largest diversified natural resource company operating in more than 25 countries. The aim of the company is to premier global company in providing its products and services to its clients.BHP Billiton products compromises of manganese, iron, aluminium, energy coal, copper, nickel, silver etc.BHP Billiton has an net revenue of US $50.2 billion in 2009 febrauary.BHP Billiton company is an merger of two companies called BHP and Billiton in 29 June 2009.

BHP company headquarters based in London is an natural resources company has founded long period ago in 1860’s has become one of the global leader in metal and mining sector and is strong in copper portfolio which helped the company growth much further. It’s a main producer of aluminium and alumina, coal, nickel, silver etc.

It has employees of 30,000 people all around the world and perform major operations in Asian Countries.

Billiton founded in 29 September 1860’s main business was tin and lead smelting and later in 1940 it extended its operations to bauxite mining. The company has an rapid growth in 1970;s through Royal Dutch group of companies. The company operates in different companies and having many portfolios which increased its growth and revenue in the market.

Even though the two companies merge under the Dual listed Companies merger, they continue to acts as separate entities thus exploiting the market revenue. Headquarters of BHP Billiton Limited is located in Melbourne Australia.BHP Billiton limited has same group directors for running both the organisations as unity efficiently and effectively. In 2001, BHP Billiton is listed on AXS and LSE and in 2002 it invested in energy source using technology and in 2009,it emerges as the one of the global company in providing its best products in the world. From 2001 to 2009 it has many developments and deals that make company very competitive and powerful globally and this happens by through perfect business-IT alignment.

BHP Billiton corporate objective is to “create long term value through discovery , development and conversion of natural resources and also in providing innovation customer and market-based solutions”.BHP Billiton Limited has developed rapidly by making use of information technology. The company is vast and diversified company and it has many complex projects to deal with and the manpower associated with it is very high. Information Technology has been deployed for their resources and they use it vey efficiently which generates them not only revenue but also competitive edge in the market.

Organisational Structure:

Organisational Structure is very important for driving the business in right directionality and to achieve organisation goals and objectives. Organisational Structure tells how the departments are arranged and how decisions are made and how to deal with any task to achieve an particular goal. Organisational Structure is explains how authority are distributed to make an effective business decisions. Organisation Structures not only differs from one company to another but also it differs in type of industry as well. Organisation Structure is developed based on type of industry, their goals and objectives. Basically, organisational structure is divided into three types. They are Functional, Divisional and Matrix organisational structure. Functional organisational structure is an hierarchical structure of all departments placing one and other. The communication is not much effective and decision made by only Chief executive of the company. This type of structure applicable to smaller companies, where as divisional structure refers to each department has head and these head of the department will have their own decision without consulting all. The decision were made individually without consulting all departments, where as matrix or hybrid structure is an combination of both functional and divisional organisational structure where information flow is uniform across the organisation and decision made is collective ,this is including all the people from different functional background and this type of structure is mostly seen in larger multinational companies and there will be effective communication exits which makes them to have better decision-making.

The organisational structure of BHP Billiton Company is very effective to drive their business and to get greater revenue from the market. As the company entered into an Dual Listing Company (DLC) ,both the BHP and Billiton companies has certain contractual agreements that put the shareholders of both companies in an position such that they represents as single company(they operate as one), even though they exits separately and is bound to all assets, liabilities ,profits as one.BHP Billiton Limited is an public traded company where it provides all its shareholders an Annual General Meeting(AGM) to attend. The Executive body of BHP Billiton Limited Company has Board of Directors which are selected by Annual General Meeting (AGM). The executive body comprises of 13 directors, 12 non-executive directors and one executive and if this non-executive directors will serve the company for more than 9 years then the same director must again stand for elections at the Annual General Meeting (AGM).It followed by Group Management Committee and senior management group .All these groups will collectively make an decision which helps to increase companies productivity in the market.

Business-IT Alignment:

Most of the organisation in the world is leveraging the Information Technology to drive their business and to achieve organisational goals and objectives. The competition has been very high in the market and almost all companies depend upon Information Technology to drive their business effectively and efficiently. But not every company has been be benefited from this information technology. Many companies has failed initially in making use of IT for driving their business. In order to drive the business and to achieve the goals and objectives of the organisation, IT has to be aligned properly to business strategy. Many companies spend much of the money on Information technology rather than their core business which leads to failure of the organisation. That is too much emphasis on the Information Technology rather than core capabilities of the organisation will leads to not only loosing competitive edge in the market but also failure of the entire business. Business-IT alignment should consists of involving people from different functional backgrounds such as from IT, Management etc to participate in the decision making which will elevate the organisation to new dimensions which in turn will provide higher Rate on Investments (ROI).Almost all the companies in the world are using the IT as a function in driving their business effectively.

Current Challenges of BHP Billiton:

The Current Challenge of BHP Billiton are mainly petroleum projects and mineral projects. The petroleum projects Macedon Australia has commenced and progress is 3% complete and production capacity is 200 million cubic feet gas per day. The other petroleum project is Angostura gas Phase 2 is on schedule and budget and is 74% complete with an share of US $180 Millions. The other petroleum projects are brait strait kipper and brait strait Turrum k which is scheduled and budget under review and North west shelf CWLG life extension in Australia with 16.67% gas has completed 84% etc

The other current mineral projects are Worsley Efficiency and Growth (Alumina as 86%) in Australia is on schedule and budget .The Construction for this project is 38% complete and overall project is 53% complete. The other mineral projects are Iron ore in Western Australia with iron ore as 85% has engineered 98%, construction is 77% complete and the overall project is 79% complete. The other projects are Douglas -Middleburg which is 100% energy coal and MAC20 project which is 100% energy coal.

Future Challenges:

There were many future challenges for BHP Billiton Limited company. Their main future challenges are to spread their products to each and every corner of the world through constantly researching their growth options. And their main primary objective is to provide larger amounts of their products to resources-hungry world. Through this they has an vision in sustaining the world economic development which helps them in bringing more revenue and growth to their organisation. For example the company has one of the challenges in 2011 to commence the production $625 million Daunia open cut cooking coal mine through BHP Billiton Mitsubishi Alliance (BMA coal) where the company has an alliance with Mistisbushi and is one of the Australia’s largest coal mine exporter and world largest supplier to seaborne coking coal.

IT functions:

IT function is the important factor for any organisation for driving the business to competitive advantage in the market. IT function if aligned properly to business strategy will drive the company through innovation and helps to get more Return on Investments (ROI).If IT services are properly leverage to business functions then the business of the organisation will grow rapidly thereby eliminating higher cost ,slow cycle etc .IT function should be properly designed such that the life cycle period has to be reduced by eliminating waste of time, money spend on that extra steps etc. IT function is the main factor which drives the business of the organisation to achieve its goals and objectives.

Factors driving the IT function of BHP Billiton:

The factors which were used for driving the IT function of BHP Billiton are cost efficiency ,business-IT relationship, speed responsive time.

Cost efficiency: BHP Billiton is very large and global organisation providing natural resources to the world economy. There are many large and complex projects involved in the organisation which they took the help of Information Technology to reduce their cost. By making of IT, they can reduce the much labour cost, cost associated with resources, tracking etc.

Business-IT relationship: BHP Billiton has taken the help of information technology to drive their business much faster and efficiently. Information Technology is used differently by different companies according to their business needs. IT can acts as internal service provides just to drive some business needs and also IT can be used to redesign processes and the information flow across the organisation.BHP Billiton has used Information in both ways for developing their business throughout the world.

Responsive Times: BHP Billiton is very large and global organisation and it operates many complex and large projects. The company needs effective information technology where it can provide the best responsiveness thereby reducing the period of life cycle and providing better products to the world.

Managing IT and IT Strategy in BHP Billiton:

The company uses Escondido as an IT function for achieving the strategic business direction. The Escondido is an strategic information systems and information technology that underpins the business strategy of BHP Billiton. This is used for generating massive amount of data where they can process the data much quickly for effective decision making. This IT function will allow them for data mining and this will helps the organisation to have accurate, timely and secured data which can be effective used for better decision making.BHP Billiton will also make use of E-business strategy for transforming work into business. E-business works in three channels such as technology, transitions and transformation of data so that it can be used effectively for data processing which results in good decision making.

The technologies that the company uses technology for reducing costs and to improve productivity are wireless networking, video conferencing, webcams, and voice over internet protocol etc for effective communication which in turn increases responsive time for better business.

BHP Billiton IT has been formed in 1989 and has office in Melbourne and all around the Australia. The company provides integrated IT solutions which will deliver better business results.BHP Billiton in association with Computer Sciences Corporations (CSC) has gained better IT services.CSC is an provider of an IT solution in various sector and it has been to an agreement that it leverage the best IT solutions to BHP Billiton for increasing its productivity in the market.BHP Billiton has an employees of more than 1700 in IT sector and has the product and services. They Include:

Portfolio framework solution ,using this they can provide product and business solutions

Enterprise Resource Planning where they can provide good and practical solutions in consulting areas such as business processes innovation, strategic information system which can be used for better decision making, technology infrastructure planning where they can used as an IT strategy in order to have better business and IT alignment which drive the business towards the desired results and systems evaluation which can be used for evaluating the resources required for projects work etc

Knowledge management is one part of the information technology where the organisation can effectively used the knowledge for innovation and better business driven results. The knowledge management consists of knowledge consulting , data ware housing and mining where they can store large amounts of data relating to different projects at one place and miming the enormous amounts of data for better decision making, data document management where they can have better document portfolio for sharing among the different functional backgrounds for better decision making and also web services like intranet, online enquiry etc

They also provide the supply chain management solutions as they have large number of suppliers providing materials, transportation, resources required for various projects. The various functions and plug-in associated with Supply chain management is tracking systems where they can track their materials or resources and check whether they met the schedule time. And this how they use the IT for driving their business. They can the best transport systems where they rely on that for estimating resources allocation, scheduled time and money. This is very good and analytical tool for processor their time, value and money in driving their business towards the better outcome

They provide integrated and sophisticated SAP and enterprise wide solutions for project management.BHP Billiton has very large and complex projects to be deal with and the amount spend fro that also will be high. If the processing time or if they are managed improperly , then it will leads to loss of millions of dollars which will have an bad impact on industry in the market and in the world.SAP provides the better integrated systems with project management where the projects goes on without any risks. Project management is very important when dealing with complex projects like Energy coal, petroleum products etc where management of resources like skilled people, scheduling, task management etc is of high priority.

With SAP, they also provide system analysis where they can have an analysis of data in the systems for determining the project plan, design and implementation. It can also be used for data conversion and application support also.

One of the most important parts of aligning IT to business is to have better infrastructure management both technically and personally for driving the business.BHP Billiton has enterprise infrastructure management solutions for operating internal business process which will enhances their business towards the goals and objectives of the organisation.

Communication plays an important role for any organisation to prosper and grow in the market.BHP Billiton is very large company and if communication fails ,then the company will have an loss of millions of dollars. The company has enterprise communication and network solutions throughout the organisation that will facilitate their communication very high in order to process their business process high in turn bring them greater return on investments.

BHP Billiton has sophisticated business solution which helps them to manage their projects effectively and efficiently and to have an competitive edge in the market. The business solutions they provide are inventory management which is used to record each inventory items they purchase from suppliers ,order systems to enter their point of sales and purchases, returns for example such as MYOB or quick books integrated with Enterprise Resource Planning Systems, active operation information like call centre to give the right information regards project status, resources information, availability and bulk materials management which can be used to store the information relating to that materials, their safety and procedure to ensure not to have explosion.

Business Strategy and Alignment:

BHP Billiton company has many products such as petroleum, copper, nickel etc and each category has an its own business strategy. Bill Billiton is very large natural resource organisation and has too many large and complex projects. Business strategy is one of the important factor that every organisation will work for achieving competitive edge in the market and also to achieve organisation goals and objectives. Business strategy is framed on core business components and this business strategy has to be aligned with information technology to drive the business towards the desired results. Business strategy is nothing about the direction of the organisation over the long term and it tell how the organisation should go in order to have an competitive advantage in the market. Business strategy tells the organisation what resources it should have such as skilled people, software, hardware, competencies, technical competencies, skills, assets etc . Strategy exists at all levels of the organisation and many strategies will be depending upon the level such as operational strategy, business unit strategy, corporate strategy etc. Based on business strategy the companies has to properly designed IT strategy in order to align to its business strategy for driving the business towards the competitive edge in the market.

BHP Billiton Limited Company has very highly and sophisticated IT management described above to be aligned with its business strategy for having better alignment which leads to achieving goals and objectives of the organisation. The company has many strategies and the strategy differs from one resource to another, but the overall strategy is grow strategy.”Our strategy is to own life-long, low cost, export-oriented, expandable assets.”Since the company is very large company, it makes much emphasis on whether it should put on millions of money on project. For that, BHP Billiton makes an financial strategy how it should go and how to eradicate risks involved. The strategy is described below as follows:

Generate Ideas

Analyse and Structure

ON Time And On Budjet

LOW COST

OWN IT WELL

BHP Billiton company has research and development team where ideas are generated, researched their capabilities, explore the idea with samples and also test their efficiencies. After testing efficiencies, they look at financial opportunities and tax issue concerning the development and funding of ideas. The most important thing they look at is safety. Safety is the most important concern as it is an natural resource company and it look at acquisitions and environmental factors whether they are any side effects that could affect the society and the company as well. After generating the ideas they analyse and structure the ideas. In this phase, they analyse how much capital should it worth is analysed through Capital Project Committee review and they analyse cost savings by looking at shared resources or the project should go for restructuring administration. They integrate the business strategy and plan with IT resources and analyse the risks associated with that project. The project is weekly assessed by senior financial management committee and forecasting will do according to it. They come with the risk assessments of the project. Next phase is on time and on budget where it look all all project management activities and quantifies not only cost and time but also financial impact on project. In this phase, the project is constantly reviewed by Capitals project review committee also assess any risks associate with that. Next phase is low lost where the committee forecast price associated with project. In this process it set out benchmarking of other natural resources companies and checks it with outcome of the project assessment. And it also assesses the general costs and administration costs. The final stage is own it well where it research market value of business units and assets and also assess cash flows and check whether it is compatible with the project or not. And at last it is checked by the Portfolio management team and has meetings with the bank investors for funding.

IT Governance: Governance is a combination of polices, management practices, procedures, customs, processes, laws, etc that an organisation should be managed and controlled. It is very important part of the organisation as it describes all important relationships among shareholders, directors etc about right and power. IT Governance is very part in driving the business towards the competitive edge in the market. IT governance should enable the Information technology to be perfectly aligned with the business strategy to drive the results in the desired results. IT governance is all about information technology systems, risk management and their performance. The main goal of IT governance is to ensure the business value without any failure. IT governance has much more to do with organisation structure. Effective IT governance will helps to eliminate the risk associate in the project and in turn returns greater return on investments and good productivity.

BHP Billiton has highest level of governance and it helpful for the organisation to have great culture that facilitate good values ,rewards, ethical standards etc.BHP Billiton believed high governance can be attained only when there is strong link between governance and shareholders value. The company has very good and high governance that will help their shareholders to have freedom and updated on the projects, company returns on investments, profits and dividends. Governance will set the requirements that the company should have in pursuing very high and reliable governance that can drive the business toward the desired results. The constitution of BHP Billiton Limited has variation of rights, transfer of securities, rules and regulations for all levels of management that will enable the company to great height to drive the business.

SCOPE OF IT:

Information technology or Information systems is used to store information, process information, transfer or exchange information for better decision making. It is also useful for the organisation to drive their business function based on results provided by the information technology. Without IT , no organisation in the world can survive their business bearing highly competition in the market.BHP Billiton has its own IT department for leveraging their business in the right direction.BHP Billiton is very large natural resources company and is spread across many different countries. Without information technology and its importance in the company, the industry cannot survive due to its large business processes in different sectors of the company. Security is one important thing that need to be taken care when it comes to large companies.BHP Billiton due to its versatile business segments and its diversity, there is large amount of enormous data will be present. All this data has to be protected by making use of the information technology or information systems. Knowledge is very important for any company to progress in the market. Without effective knowledge management, no company can survive in the market and cannot achieve competitive edge as well. Data has to be processes and then converted into information and then again has to be validated so that it can be used as knowledge and this knowledge is very important factor for decision making which in turn drive the business goals and objectives. Without Information technology or information systems this cannot be possible.BHP Billiton has strong information systems for storing huge amount of data in data warehouse which can be use effectively for processing for decision making. Document a management system which helps to maintain documents in reliable format and can be shared by all the departments for decision making. Enterprise Resource planning systems such as SAP and SAAS can be used for processing these huge amounts of data so that they can extract the target amount of data which can be used for decision making. Security is one important factor and for this the information technology can provide the security access to its employees only at a certain level and it depends upon their level. They make use of IT for supply chain management where they can effectively develop the relationships between supplier and their clients and costumers etc.BHP Billiton company has huge complex projects and in order to maintain and coordinate the resources , people, technology etc, information technology and information systems is very necessary. It is impossible for them to operate without information technology or information systems. For estimating the resources required and for calculating return on investments, for scheduling etc information technology is very important. For production roll out and for implementation and to check the progress of project and in every life cycle of the project ,information technology and information systems is very necessary .Having effective alignment between Information technology and business function will helps the organisation to achieve its goals and objectives. Information technology enabled the business of BHP Billiton and there is much increase in its revenue and ROI(return on investments) as well. The scope of Information Technology in BHP Billiton is very high which drive their business effectively and efficiently.

Business Value: Business value is one of the important factors that the company has to be assessing its value on various terms and conditions. Business value describes how the organisation can sustain over the long term on various factors. It just tells how healthy is the organisation running at the moment and its growth in the long-term.BHP Billiton Limited has high business value because of its good planning for sustainability. Business value not include tangible assets but also intangible assets and its effect on the company.BHP Billiton is ensured to have sustainability development where health, safety ,environmental and communities responsibilities are integral part of the business. The business will continue to enhance in the future due to its safety precautions procedures and standards at all levels of the organisation. Sustainability is one important factor that determines the healthy run of the organisation in the future.BHP Billiton is an natural resources company and the risks associated with this is also very high. Environmental risks need to be eradicated like pollution and it should not affect the people health. Employees working in the organisation need to be taken and their security is most important concern and this will facilitate long run for the employees in the organisation. Developing the people and providing the resources to meet our standards will helps the company to progress in the future.BHP Billiton protects the rights of the people,employees working in the company thus providing them security and freedom so that they get motivation and encouragement thereby minimising the turnoff of employees.BHP Billiton has sustainable framework for successfully running their business and to have well-being in the future. The company has sustainable systems to implement sustainable development policies in accordance with the governance processes. The policy applies to each and every me