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Source : SAP
SAP Business Transformation Study
Business Transformation is also known as :
business transformation agency,
business process,
complete business process,
business transformation info,
business transformation services,
change management strategy.
change management,
business software,
business transformation outsourcing,
business transformation consulting,
Valero
Valero Energy Corporation is the largest oil refining company in
North America. The company's primary products are reformulated
gasoline, California Air Resources Board Phase II gasoline, low-
sulfur diesel, and oxygenates. Valero has 17 refineries in the
United States, Canada, and Aruba; approximately 5,800 retail and
branded wholesale outlets in the United States, Canada, and the
Caribbean, and refining capacity of 3.1 million barrels per day.
Key Challenges
- Grow rapidly, primarily through acquisitions
- Quickly achieve acquisition synergies
- Improve decision making information for acquired operations
- Shorten postmerger integration by 4- to 8-fold
- Eliminate duplication of effort and data
- Speed up generation of month-end closing statements
- Attain near total accuracy of performance figures
- Enable viewing of total company inventory at any time
Implementation Best Practices
- Standardized on 1 platform for composite applications
- Managed all application interfaces and Web services on
- central integration hub
- Prototyped tools prior to production rollout
- Established standards for enterprise services
Financial and Strategic Benefits
- Allowed acquisitions to continue without IT gridlock
- Expanded access to Web and enterprise services
- Achieved consistency in methods for using services
- Improved information for making business decisions
- Provided real-time visibility of orders, shipments, and
- inventories
- Increased collaboration among in-house developers
- Increased system reliability and reduced complexity
Why SAP Was Selected
- Ability to provide a central hub for managing all interfaces
- and Web services
- Power to serve as a single integration and development
- platform for nearly all of Valero's business
- Capability to integrate SAP® and non-SAP software systems
- Support for synchronous and asynchronous messaging
- Enterprise approach to process integration
Low Total Cost of Ownership
- Made it quicker and easier to change application
- infrastructure
- Minimized cost and effort entailed in interfacing disparate
- systems
- Made Web services reusable
Valero ' A Proven Track Record of Growth and
Integration
Over the last decade, Valero Energy Corporation has leaped to
become the largest oil refinery company in North America by
pursuing an aggressive growth-through-acquisitions strategy
that targets distressed companies. Valero went from one refinery
in 1997 to 17 today, from 0.2 million barrels a day in refining
capacity to 3.1 million, and from US$5 billion in revenue to more
than $90 billion.
Managing this growth, especially the assimilation of new
companies into the corporate fold, is a monumental
undertaking. One of its most challenging aspects was the
integration of the many disparate IT systems that new
acquisitions bring with them. The new entities all had
applications that were ill equipped on their own to communicate
with one another or with the SAP® application suite that runs
Valero's core business. Moreover, they had to be integrated
quickly because most of the acquired companies were distressed
assets that were acquired at low costs. IT integrations that take
most companies 12 to 24 months must be completed by Valero
in three.
SAP NetWeaver®: A Single Hub for Integrating
Applications and Processes
To keep IT gridlock from impairing its growth, Valero needed a
way to fit new applications into the infrastructure quickly. The
only solution was a common hub for integrating them, whether
they were local or global in scope and from SAP or other
vendors ' a hub that would support reliable communication
among both synchronous and asynchronous applications. But
just connecting applications was not enough; it was equally
important to make sure they were used properly. Therefore, this
hub had to support centralized monitoring of business processes,
orchestrating them end to end and making them easy to change.
In the SAP NetWeaver® platform, especially the SAP NetWeaver
Exchange Infrastructure component, Valero found exactly that
solution.
Building Enterprise Services and Web Services on
Valero's Enterprise SOA
To make sure users had convenient access to the functions these
applications perform, Valero built a layer of Web services specific
to business applications, along with a layer of enterprise services
above them to orchestrate company-wide processes. Here too
SAP NetWeaver proved to be an excellent platform, serving as
the basis for Valero's enterprise service-oriented architecture
(enterprise SOA) upon which it has developed over 50 integrated,
reusable Web services that replace 200 stand-alone Web services.
Hundreds more are in the offing, all available from a single
dashboard. This new breed of enterprise applications is far less
time consuming to develop ' two weeks compared to six months
in some cases ' and can be more easily reused.
Continuing on the Growth Plan
Valero's enterprise services and integrated IT infrastructure have
allowed the company to improve business efficiency, on-time
reliability, and performance tracking accuracy while cutting
time to bill, time to close, and maintenance and support costs.
A single "Ship Visibility" application saved Valero US$480,000 in
demurrage costs in its first month of use. Most important, Valero
is continuing its rapid pace of acquisitions and integration of
disparate IT infrastructures far faster than the industry norm.
Next, the company is turning its attention to the supply
chain to increase the efficiency of collaborating with suppliers.
Meanwhile, it is proceeding on plan with confidence that SAP
NetWeaver and the enterprise services model will continue to
simplify the challenges of growth.
"Now we have plantwide visibility of anticipated work,
how the resources are going to be used, and what the
anticipated costs will be, all the way down to the unit."
Rick Griffin, Vice President, Refinery Systems, Valero Energy Corporation
"There's a terrific opportunity for companies to use
SAP's application of enterprise service-oriented
architecture to achieve speed and efficiency while
eliminating duplicate work and duplicate data."
Hal Zesch, Senior Vice President and CIO, Valero Energy Corporation