Amerada Hess' Conversion to Cerenade - Case Study

Oil and gas industry competition on operating cost during the mid 1990's called for a variety of electronic solutions.  Internal transactions were paper based, manually processed / filed for reference, and often resulted in a paper chase … employees searching from office to office for THE official copy of a key document.  Added to these conditions was the fact that those who sign-off on most transactions were the same employees who traveled … at an increasing frequency as business spread globally.  Thus, transaction completion would be held for their return to their home office. Amerada Hess needed a set of electronic forms tools.

So far so good.  At least Hess thought so until they  piloted use of the Authorization for Expenditures (AFE) form throughout the entire organization.  What they found was a real test (both technically and culturally) in deploying a very complex form.  Starting out, the AFE had over 400 fields, required up to nine signatures, and was customized into 7 or 8 versions as used across all locations internationally.  With Cerenade, Hess found a way to deploy not only AFE’s, but also hundreds of other forms used by various departments within the organization.

Background

Amerada Hess, headquartered in New York, is a global energy company engaged in:

·        Exploring for oil and gas reserves

·        Producing and transporting crude oil and natural gas

·        Refining crude oil

·        Marketing crude oil, natural gas, and refined petroleum products

The scope of all these operations spans the United Kingdom, Northwest Europe, North and South America,  Asia, and Africa … literally from sea to shining sea. 

Amerada Hess employs over 7,000, is organized into four primary divisions (Exploration and Production, Refining, Energy Marketing, and Retail Marketing), operates refineries in New Jersey and the Virgin Islands, and markets refined petroleum products through over 1,100 HESS gas stations and convenience stores.

In 1995 the Americas Exploration and Production division based in Houston, Texas, blazed the trail by introducing electronic forms to their 900 employees, and aggressively rolled out Delrina's FormFlow software. In 1998, with increasing demands for electronic forms deployment across an expanding organization and increased need for web based technologies and expanded workflow functions, the solutions analysis pointed to the Cerenade’s Visual eForms Enterprise Server.

Processing needs outdistanced functionality

In using Delrina’s FormFlow product for five years, Amerada Hess was satisfied with the early electronic forms results.  Specifically, the software provided a graphical interface to view forms, as well as a forms designer package that was relatively easy to use.  However, with new requirements to automate the forms process throughout the entire company, Hess began to encounter process issues that could not be solved with FormFlow.  These issues plus the need to move toward a web-enabled solution to accommodate IT environment integration goals, made it clear that they had outgrown the existing system.  Thus, the search began to identify and evaluate the alternatives available in the market.

The process began with a rigorous review of what did and didn’t work with the current system, as well as identifying present and future requirements.  The following highlights some of the issues that Hess faced:

·        Internal Security – The new application had to interface seamlessly with:

§         Existing IT infrastructure

§         Globally disbursed operations

§         IS mandate that no information crossing the Intranet be compromised

·        Support and Maintenance – With FormFlow, Hess experienced considerable expense in terms of eForms Development Team time and client inconvenience on:

§         Desktop configuration and support  for clients using eforms routinely performing installations/upgrades

§         Troubleshooting such issues as problems after upgrading browsers and printer compatibility after posting new forms on web server 

As if that weren't enough, it was just too hard to push out eForms to the entire organization because deploying through FormFlow required the extra desktop support.  So, for Hess, support and maintenance were key issues in evaluating a new solution. 

·        Complex forms – Some forms, like the Authorization for Expenditures, were complicated.  The AFE required up to nine signatures, had over 400 fields, came in 8 different versions and it was used globally.  The right solution had to be sophisticated enough to handle this, and be attached to a SQL database. 

·        Web-enabled future – Hess’ intention was to move away from a 16-bit to a 32-bit environment for the flexibility that would allow building a truly web-savvy system.   

·        Preserve the current eForms technology investment – Hess had already expended considerable time and money deploying FormFlow.  Thus, the ideal solution should be 'forward compatible', i.e. one that did not require a total process make-over, but rather could easily migrate from the current system preserving as much of the investment as possible. 

·        Other requirements:

§         Database connectivity

§         Digital signature authorization

§         Workflow processes

§         Email systems integration

The vendor of choice

After exhaustive reviews, Hess chose Cerenade’s Visual eForms Enterprise Server.  Eloise Castillo, Amerada Hess’ Lead Product Manager for electronic forms, outlined some of the reasons for selecting Cerenade:

·        “Our internal Hess clients pushed us for a solution that eliminated the functional and technical limitations we were experiencing.  Primarily, we wanted to: 1) support business unit employee productivity; 2) improve my teams’ overall work performance; 3) increase internal eForms system performance and reliability; and 4) further reduce operating costs.”

·        “We were impressed with Cerenade’s business-like approach to developing and deploying new technologies.  We shared with Cerenade a respect for technology and the innovation potentials it offers.  They conveyed a vision for the broad role that eForms can play in an enterprise data management plan that was very compatible with our own, an understanding of our needs, solid professionalism, and a client oriented technical support ethic.  We see eForms as a data collection and storage tool that can add value to data management inside a company, as well as outside a company.  And we get the impression that Cerenade does too.”

·        “After the evaluation was completed, I could see a number of important benefits.  What really closed the deal was Cerenade’s ability to pull off a complete prototype in a week.  I repeat …. ONE week!  No one else came close to that.”

The deployed solution

Once Cerenade was selected, Hess immediately began converting the existing inventory of forms originally designed in FormFlow.  Today, three years later, 3000 employees worldwide are successfully using the application; this includes over 680 Hess retail locations, offices in Brazil, Denmark, Norway, England and Scotland.  The response has been overwhelmingly positive says Castillo, “Some of the units I’ve yet to train have found the application on our server or were told about it by other employees and have already begun using it on their own.  That’s how intuitive the system is.”

The reason the word has spread within Hess is that the solution is being used in most of the functional areas from Human Resources to the Retail outlets.  Following is a sampling of some of the forms implemented with Cerenade:

Why it’s better 

For Castillo and her team, the time and money saved by eliminating desktop problems are paramount.  “Our desktop issues are gone,” continued Castillo.  “Because we deploy the application through a web server, virtually hundreds of desktop support hours are saved.  This translates directly into dollar savings that are felt across the entire corporation.  In short, Visual eForms tools meet all my expectations.  Even better.”

In summary, Hess has successfully implemented Cerenade’s solution and is now realizing the many benefits:

·        Visual eForms Enterprise Server employs true open architecture design, which enables users to integrate electronic forms into other applications and deploy them on laptops, business and technical laptops over LANs and WANs

·        Visual eForms Enterprise Server is significantly faster than the previous package; Hess experiences nearly instantaneous loading in Houston and excellent response across all globally spread offices

·        Visual eForms Enterprise Server is very simple to use; digital signatures use NT security, requiring no separate password.  It provides one-step routing integrated with Amerada Hess’ Outlook email system and the forms are easily read online using Internet Explorer’s “full screen” viewing feature

·        Visual eForms Enterprise Server is reliable and stable; desktop intervention is nearly eliminated and the Enterprise Server performs automatic server downloads and automatic version checks

·        Cerenade’s technologies have allowed this division of Hess to serve the entire corporation from Houston with less resource than needed when using FormFlow, therefore reducing operating costs.

·        Enterprise Server is scalable; therefore Hess is positioned for further expansion as the company and its’ related businesses continue worldwide growth within competitive cost structures

Measurable return-on-investment (ROI)

Return-on-investment exceeded expectations and saved time, money and resources: 

·        Saved dollars globally with savings included in cost of providing eForms services (including allocated IT costs:  server space, network access, technical services, etc.), annual eForms software maintenance payments, staff expenses for forms design/maintenance, and product management (fully loaded with salaries, fringe, office space, etc.)

·        Reduced costs because of reduction in paper forms (including the cost of outsourced services such as printing and shipping) and internal expenses (graphics design, vendor coordination, stocking and distribution)

·        Saved significant time throughout entire routing and approval process

·        Passed PriceWaterhouse Coopers audit which authenticated security of digital signatures and approves eForms as legally binding documents

·        Calculated annual savings at Hess based on conversion from paper forms to eForms:

§         Retail savings $170,000/year

§         Terminal savings $71,000/year

·        “Significant improvement in approval processing time or intervals and the ability to manage global processes from any desk around the world – priceless!” – Eloise Castillo

Reduced risk of abuse.  Added cost savings.  Better interdepartmental relationships.

Once implemented, Hess realized some added benefits: 1) less risk of employee abuse; 2) cost savings beyond those planned; and 3) improved relationships among client departments.

Regarding the first two benefits, Castillo and her team met with managers to demonstrate how the system worked as part of implementation. The new system mandated that managers were now uniquely responsible for EVERY associated departmental expense.  In the past, disgruntled employees had greater opportunity to conduct fraudulent transactions through various processing gaps.

With the new system, ONLY employees with properly delegated authority can authorize expenses.  While many managers had authorized their administrators to access their email inboxes, they did not risk revealing their User Name/Password to those administrators for expense authorization purposes.  The result … lessened risk of fraud and lowered cost of operations for Hess.

Finally, better interdepartmental relationships resulted because of the ease with which Cerenade’s Enterprise Server was implemented.  When the project was first initiated, there were “attitude hurdles” to cross because of past experience with FormFlow.  But after Cerenade’s implementation, the Global Infrastructure IS Manager at Hess, George Defenbaugh, was “in total support of the product.”

“We are very excited about the Visual eForms product line and the possibilities for us moving forward.  A boulder has been lifted from my shoulders and what our group has been able to accomplish in a short period of time is extraordinary.  We constantly receive praise and witness client astonishment at the simplicity and speed with which our electronic forms get to our users all over the world.  It’s instant everywhere, every minute.”  – Eloise Castillo

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