Companies are under increasing pressure to deploy their best available technological capabilities, in order to maximize recovery and efficiency, while at the same time minimizing costs and strengthening their safety records. Arthur D. Little’s latest whitepaper “The Projects, Technology & Procurement organization” examines the emergence of a new organizational form which sees the integration of all relevant Projects, Technology and Procurement (PTP) units into a single, integrated global division. The whitepaper reviews experiences of Shell, Statoil and other major players, highlighting best practices and issues to overcome in operating this organizational style.
One of the major hurdles for oil companies is the strong pressure on “first oil” and early revenue generation resulting in Project Mangers being rewarded against delivery on schedule and scope. The Energy and Petroleum industry has therefore struggled to incentivize teams managing complex development projects. The new organization form approach seems to accelerate value creation by boosting the capability of project delivery functions, enabling cost effective deployment of appropriate technologies and constrained technical resources while ensuring value-driven procurement. Arthur D. Little’s research suggests that PTP organizations lead to:
1. Clearer accountability for on-plan project delivery due to greater ease in aligning relevant stakeholders, and;
2. Improved integration of key suppliers
“The combination of PTP functions into a single division offers some key advantages in successful project delivery, with reduced costs and improved deployment of technology,” says Ben Thuriaux-Aleman, Principal in Arthur D. Little’s Energy Practice. “So far Shell and Statoil have fully adopted the PTP structure and there is considerable interest from other companies. However, there are some organizational and structural challenges which need to be considered such as the implementation and management of the new organization.”
Stephen Rogers, Partner in Arthur D. Little’s Global Energy Practice says, “an organizational design must always be crafted to a company’s particular business circumstances and cultural texture. As asset development challenges drive the development and adoption of more and more complex technologies, it seems likely to us that we will see this organizational design adopted more frequently in the coming years.”
The full whitepaper can be downloaded at www.adl.com/emergence
About Arthur D. Little
Founded in 1886 as the world’s first consulting firm, Arthur D. Little has continually transformed business thinking and practice by applying its expertise in the areas of strategy, technology and innovation. Today, Arthur D. Little helps companies to create growth, overcome strategic challenges, improve innovation capabilities, and increase efficiency and competitiveness in a globalised marketplace. Arthur D. Little has a global footprint in 20 countries with a network of over 1,000 people.
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