IT Strategy for

RELIANCE PETROLEUM
Batch

MBA BM
2015-17
Sectio F
n
Group 34

Name
Bhutesh Niroula
Bibhu
Prasad
Mishra
Biswajit Routray
Chetan Swain
Ishan Luthra
Gunjan Panjwani
Hitesh Asnani

Roll No
UM15322
UM15323

Vidisha Sinha

UM15376

UM15324
UM15325
UM15327
UM15328
UM15329

INDUST
RY
ANALYSI
S

PESTEL ANALYSIS
economic growth, interest rates,
exchange rates, inflation rates
Government intervention in the
free market infrastructure
quality, economic growth rate,
availability of labour, wage rate of
labour

government policies related to

the industry, tax policies, laws
and regulations, trade tariffs
OPEC( Organization of petroleum
exporting countries) also play a
major role in oil prices
India fulfils 80% of its demand
by imports thus the upward and
downward movements are
closely watched

to R&D Activity, automation, rate

of change of technology
industry focus on technological
effort
Integration of Technologies with
existing infrastructure

Safety of a person overrides all

the production target is the
health, safety and environment
policy
Medical check-up is provided
periodically, to employees as
well as their family members.
CASHE i.e. Changes Agents for
Safety and Workplace
Environment. For reducing safety

employment law, consumer law

health and safety law
Compliances related to trade
policies and foreign investments

Inherent issues in harming the

environment and clean-up
program during refining process,
during recovery operations,
transport, storage and utilization
Environment regulations to as well
methods for mitigation of
environmental effects
waste management are to be
followed

SWOT ANALYSIS
low bargaining power from the suppliers as the raw
materials constitute of the costs
They always remain unprotected to the supplies of the
raw material
Price is extremely volatile as it is dependent on import
of crude oil

Very few main players in the last few years in the

petroleum industry
It has a strong brand name
very good financial position
vertically integrated business, operates over the
complete value chain

STRENGTH

OPPORTUNITY

Increase in disposable per capita income.

Growing demand for automobiles
Enablers are active for creating derivative demand
Investors are eager to put money as demand for
petroleum products is growing significantly

S
O

W
T

WEAKNESS

THREAT
High custom duties
High Import duties
Too much dependency on imports
Depreciation of Rupee with respect to dollar

VMG & BUSINESS METRICES

VISION
Through sustainable measures create wealth for the nation. To enhance quality of life across the entire socioeconomic spectrum. To help India to become a global leader in the domains where it operates.

Mission
To create value for all stakeholders. To sustainable Growth through process innovation. To use sustainability to
drive product development and enhance operational efficiencies
Ensure energy security of the nation

GOALS
Goal 1: To reduce carbon-footprint by 10%
Goal 2: To create awareness among stake holders about sustainable practices .

BUSINESS METRICES
Goal 1. To measure carbon footprint
Quantity of packaging materials discarded or reused per unit of product, Quantity of energy used per year or per
unit of product, Quantity of waste per year or per unit of product, Number of products introduced in the market
with reduced hazardous properties, Quantity of air emissions having global climate change potential.
Goal 2. To measure stakeholder engagement in sustainable practices
No of households exposed to a particular media, increase in main stream media spending for sustainability
awareness creation, Increase in spending on Employee training program on the sustainable aspects of business.
The number of people who follow your initiatives across social media channels can be a great indicator of overall
awareness.

STAKEHOLDER ANALYSIS
They communicate their strategies and code of
conduct to their suppliers in order to promote them
on their sustainability journey
Reliance engages in a rigorous two way
communication with them so as to streamline issues
SUPPLIE
causing conflict and ensure efficient business
functioning.
RS

Reliance FoundationDrishti, in association

with the National Association for the Blind
(NAB), supports the visually impaired through
several initiatives
Project Jagruti: A project to uplift and bring
dyslexic students from the underprivileged
segment into the main stream
Project Gift providing comprehensive care and
support for HIV affected kids in and around
Jamnagar district, in
addition to
nutritional support

LOCAL
COMMUNITY

EMPLOYE
23,853 employees working at RIL
multiple internal communication channels toE
keep all employees informed and updated
take regular feedback from all employees in
order to be able to aid them to perform better.
CUSTOME Technology and innovation in Product design
called Task Based Health Risk Assessment
RS
for minimizing health and safety impacts of
(TBHRA) conducted across all sites to establish
products and services through their lifecycle
worker level risk profile, providing guidance for
Regular customer surveys give them trends
corrective actions leading to excellence in health
on customer satisfaction whilst giving them
and safety performance
INVESTO
areas on which they can improve
Reliance generates returns in the form of
RS
E- Engagementof the customers on social
capital appreciation and dividend above the
platforms like the Facebook and Twitter is also
average in the Oil & Gas sector
among one of the initiatives taken by the
Reliance uses the annual general meeting to
company.
communicate achievements, issues and plans
with our shareholders

FUNCTION
S
IN
RELIANCE
PETROLEU
M

VALUE CHAIN ANALYSIS

L0 Diagram.
Basic Functionality of Reliance Petro

Marketing
&
Distributio
n

Market
Research

segmentation
and
positioning

Sales
Promotion

Sales
Process

PROCESSES ASSOCIATED WITH FUNCTIONS

Processes of Operation, HR and
Marketing are explained in the
diagrams

RELIANCE
PETROLEU
M

RISK MANAGEMENT

Busines
s
Impact

Sl.
No.

Very
Low
Low
Medi
um
High
Very
High

Likelihood of occurrence
Very
Medi
Very
Low
Low
um
High
High

Risk Identified

Critical Information
Leak due to hacking
of the servers

Change in rules and

regulation related to
Cloud service

1
2

2
4

3
6

4
8

6
8

9
12

12
16

15
20

10

15

20

25

Impact
Factor

Impact on revenue

1-3

0.5-1%

4-6

1-3%

7-9

3-5%

9-12

6-9%

12-15

10-12%

15-18

12-13%

19-21

13-14%

>21

14-15%

5
10

3
4

Probability

Risk Levels

Risk Index

Impact

Risk Mitigation
Plan

Cost of Mitigation

Remarks

Loss of competitive
edge.
Rs. 110.34 Crore (3%
loss in revenue due
to lost competitive
advantage)

Regularly upgrade
encryption modules.

Renew Security
Certificates
whenever required.

Rs 1 to 3 Crore
per year

Mitigation of a risk of such

magnitude is imperative
considering relatively
lower cost of mitigation.

Rs 36.78 Crore(1%
loss in revenue due
to renew of the
service to adhere
guidelines)

Rs 0.08 to 0.18
Crore

Prevention is always
better than cure. There is
no need to go for
additional investment in
back-up mechanism if the
existing system has the
potential to support the
current demand.

Continuously be
update with the
guidelines and act as
per the demand to
avoid major cost.

RISK MANAGEMENT
3

Significant Network
Outage (say for 2
hours or more) in a
working day
impacting
information sharing
and hence urgent
decision making

Sensitive data lost

owing to corruption
of memory modules

Physical damage to
servers due to
natural calamities

Virus/ Malware
attack to the
system

15

Rs 36.78 Crore(1%
loss in
Revenue loss due to
opportunity cost)

Maintain an alternate
network that can be
switched over to in
case of such a
situation

Rs 55 to 60 Lakhs

Maintaining a redundant
facility for such a
completely unexpected
situation cannot be
justified owing to the
volume of investment
required for the same.

Batch jobs should be

Rs 441.36 Crore
deployed to automate
(12% loss in revenue Regular data backup
the task of taking
due to severity of
and intermittent disk
Rs 80 to 140 Crore backup of sensitive data
impact in decision
health check-up
at predefined intervals in
making)
activities
addition to regular

maintenance activities.

Rs 147.12 Crore (4%

loss in revenue due
to serious impact to
Maintain an alternate
the overall system
facility
including production
processes)

Rs 147.12 Crore (4%

Update the antivirus
drop in revenue due
at proper interval.
to lost competitive

advantage)
Use of Firefox.

Rs 5 to 10 Crore
per year

Maintain the facilities

properly with regular
checkups.

Use of Firefox.

Rs 2 to 3 Crore per
Outsource the work from
year
third party in case if
required.

PROCESS
INTEGRATI
ON

PROCESS & APPLICATION INTEGRATION

Inventory
Management

Material Requirements
Planning

Forecasting, Inventory, Master

Production Schedule

Supplier quality
RTS (review of
technical
specifications),
Volume and Ramp
up capability
evaluations

Production/Refining
Warehouse
Operations planning and
Management
scheduling
Production planning,

Staffing plan ,Sales and

Operations plan

Purchasing
Procurement/Buying

Strategic Sourcing

Purchase Ordering,
Inbound logistics,
Product development
feedback etc.

RFP (RFQ) , Supplier

consolidation, New
tenders and Contracts
etc.

Quality Control

Research and Development

Crude Sourcing

Cost & Quality of

crude.

Economy of scale of
operation

Pre-refining phase

Magnitude of the
operation & the type
of the technology to
be implemented.

Innovations in catalyst
development
(especially FCC
catalyst) by improving
zeolite accessibility,
improving reaction
kinetics & exploiting
shape selectivity.

Production/Refining
phase
Increase of catalyst
activity,
improvement in
reactor internals,
research about
additives/aromatic
saturations to
decrease sulphur
content & improve
cetane(for diesel) &
octane(for gasoline)

Compliance/Regulatory phase

Post manufacturing
studies on projects

Compliance with EURO III/IV

emission standards.

Trials for
improvements &
development of
better EURO emission
standards compliance
products.

CROSS FUNCTIONAL LINKAGE

APPLICATION
INTEGRATION
Purchase

Production

Research and
Development

Supplier quality
evaluation
system

Production and capacity

planning systems

Product Data
Management
system (PDM)

International
material data
system

Process/Product change
notification

Trial feedback
mechanisms

Parts/Process
approval
systems

Parts/Process approval
systems

Post production Trial

feedback systems

Product quality control

systems

Process/Product
change notification

CLOUD
STRAATEG
Y

CLOUD ARCHITECTURE

CLOUD ROI
CASHFLOWS
Year 1

On-Demand
On-Premises

Cash flows

Year 2

Year 3

Year 4

Year 5

Year 6

61,250.00
290,000.00

45,000.00
50,000.00

67,200.00
70,000.00

84,000.00
50,000.00

84,000.00
50,000.00

90,000.00
70,000.00

90,000.00
50,000.00

- 61,250.00

- 5,000.00

- 2,800.00

34,000.00

34,000.00

20,000.00

40,000.00

WACC CALCULATION

Year 7

Microsoft Excel
97-2003 Worksheet

Assumptions:
1. Initial investment is the incremental amount required to set up
cloud infrastructure and migration process.
2. Returns are considered as the money saved in the subsequent
years by implementing cloud.
3. Intangible benefits and indirect benefits are not considered
during this calculation.

ROADMAP FOR CLOUD

STRATEGY

DESIGN

IMPLEMENTATION

Mo
nth
1

M
on
th
2

M
on
th
3

M
on
th
4

M
on
th
5

M
on
th
6

M
on
th
7

M
on
th
8

M
on
th
9

M
on
th
10

M
on
th
11

M
on
th
12

Assessment and Analysis

Risk analysis

Evaluation of SLAs

Architecture and Design

Infrastructure design

Cloud architecture

Optimization

Cost Minimisation

Consolidation, virtualisation

Standardization

Front end

Back end

Automation
and
transformation

Automation of Processes

Implementation

TECHNOLOGY SCORECARD
Business strategies for Goal 1
Reduction of waste and natural resources (coal,

Mobility fuel) by 10%

FINANCE (30%)
OPERATIONS
HR (25%)
(45%)
Create a
Increasing
Vendor &

tripleutilization rate
supplier
bottom line
of plants to
orientation
accounting
85%
conducted on
system to
Energy
environmental

cater to the
efficient
issues.
social &
technology to
Employee
ecological
be
training
aspects
incorporated
program on the
along with
in 15% of the
sustainable
the financial
supply chain.
aspects of
aspects.
Packing
business.

2% of the
methods to

Training

bottom line
reduce natural
supervisory
to be
resource
staff with good
invested in
consumption
practices like
green
by 30%.
six sigma.
technology
Adopting 3R

Attracting &

(Reduce,

retaining
reuse,
1.
Increasing utilization rate of plants to talented
85%
recycle)
professionals.
1. Energy efficient technology
philosophy
to to
be incorporated in 15%
of the supply chain.ensure
sustainable
2. 2% of the bottom line to be invested in green
consumption.
technology

Department Objectives
FINANCE (30%)
Create a triple
bottom line
accounting system to
cater to the social &
ecological aspects
along with the
financial aspects.
2% of the bottom line

to be invested in
green technology
OPERATIONS (45%)
Increasing utilization

rate of plants to 85%

Energy efficient

technology to be
incorporated in 15%
of the supply chain.
Packing methods to

reduce natural
resource
consumption by 30%.
Adopting 3R (Reduce,

reuse, recycle)
philosophy to ensure
sustainable
consumption.

Metrics

Three tier definition

Social

Ecological

Financial

Training supervisory
staff with good

Utilization:

Operating
capacity/
Installed Capacity
Procurement and
distribution system to be
incorporated first

Overall

0.18

0.12

45%

0.2025

0.1125

0.0675

0.0675

Profit after tax is to be taken

for evaluation

HR (25%)
Vendor & supplier

orientation
conducted on
environmental issues.

Employee training

program on the
sustainable aspects
of business.

Weightage

60%

40%

No of man hours to be
measured

Employee awareness/ no of
man hours

No of employees now

25%

15%

15%

15%

15%

25%

45%

0.0375

0.0375

0.0625

0.1125

TECHNOLOGY SCORECARD
Department
Business Strategies for Goal 2
Objectives
To increase stakeholder engagement in sustainable practices

MARKETING (60%)
MARKETING (60%)
FINANCE (15%)
HR (25%)
Exposure: No of

households
Exposure: No of
15% increase in
Employee training

exposed to a
particular media
households
main stream
program on the
schedule at least
exposed to a
media spending
sustainable
once to be
particular media
for sustainability
aspects of
increased by at
schedule at least
awareness
business.
least 10%
once to be
creation

Impact: The

increased by at
A dedicated

qualitative value
least 10%
budget for digital
of an exposure
Impact: The
marketing domain.

through a given
TECHNOLOGY SCORECARD
qualitative value
medium to be
of an exposure
increased
by

1.

(reach
x
frequency)thro
ugh
a
given
medium to be
increased
by
10%
To provide
greater impetus
in digital
Exposure: No of households exposed to a particular media
marketing
schedule at least once to be increased by at least 10%
domain

2. Impact: The qualitative value of an exposure through a given

medium to be increased by 10%.

3.

Employee training program on the sustainable aspects of

Weightage

Overall

50%

25%

15%

0.3

0.15

0.09

(reach x
frequency)

Increased
subscriptions in
digital domain

10%
To provide
greater impetus
in digital
marketing domain

FINANCE (15%)
15% increase in

main stream
media spending
for sustainability
awareness
creation

Metrics

A dedicated
budget for digital
marketing
domain.

50%

50%

0.075

0.075

CONCLUSION
In order to make its data more secure, for high performance computing and scalability and
flexibility it should opt for Cloud computing. So as to build a scalable, flexible and reliable IT
system.
It should adopt private SaaS which will fuel its value chain optimization. If it is want to go
for a cost sensitive option then can go for Hybrid.
It should do pilot of cloud before complete adoption. It should focus on core technologies inhouse
As the NPV is positive and the value of IRR (15.83%) is greater than WACC (11.41%), going
for cloud is a better alternative than on premise setup.
A roadmap has been laid out for the transfer of technology and the risks should be
considered and mitigated so as to make the transition to cloud smooth.