Composite apps simplify business processes at Tesoro Petroleum
By Staff -- Manufacturing Business Technology, 2/1/2004 12:00:00 AM
When San Antonio-based Tesoro Petroleum embarked on a new growth-by-acquisition strategy in 1998, the need to replace its aging non-Y2K-compliant systems grew more pressing than ever. A rapid migration was completed before the witching hour, and five years later, the company has succeeded in growing itself roughly eightfold, to $8.5 billion revenues.
But the story doesn't end there.
Like many companies that were under the gun to replace non-Y2K-compliant systems, Tesoro chose a "plain vanilla" approach to implementing SAP. The goal, according to CIO Mark Evans, was to implement now and tweak later. "As we became more comfortable with SAP, we would add some of that flexibility back," he says.
With nearly half of the 4,500-person staff of the company using the system, ease of use became a critical issue. For instance, to record a sale, SAP requires inventory to be issued. Not surprisingly, in some cases, employees wound up taking short cuts, issuing sales orders ahead of issuing material. "Why couldn't I build a simple HTML screen that contains all the pertinent steps, rather than having to go through 14 screens in SAP?" Evans wondered.
"I wanted an easy front end," he says, citing the Southwest Airlines Web site as his inspiration. Modifying SAP's ABAP code was out of the question because of cost. Enterprise application integration tools were ruled out because they connect applications, rather than simplifying multistep processes.
Fuego, a start-up provider, offered business process management (BPM) technology designed to choreograph processes and present them using a simple Web interface.
To start, Tesoro conducted a 90-day pilot to simplify the order and inventory replenishment cycle, consolidating functions from nearly a dozen SAP screens to a handful. Since then, the company has simplified almost a dozen more processes, including inventory, pricing, and capital management.
Since implementing Fuego, Tesoro says it has reduced the order-to-cash cycle for collections by a factor from three to sixfold. Additionally, it has reduced end-user training requirements because the screens are more intuitive. In so doing, it has changed the role of IT within the organization. "By developing a common language of business processes, we have changed the perception of IT from technology implementation to business problem-solving."
