ADNOC Upgrades ERP for Competitive Advantage in Oil and Gas Sector

ADNOC upgraded its ERP system to gain a competitive advantage in the oil and gas sector. The upgrade helped the company in achieving the UAE smart government vision and reducing costs. The implementation of ERP in human resource, sales, and distribution department helped in hiring skilled labor and improving the quality of products. Information systems are important for organizing data, storing information, and making quick decisions. The lessons learned from the case study include the importance of updating processes, implementing new technologies, and gaining a competitive advantage.

ADNOC Upgrades ERP
Oil and Gas Sector

ADNOC UPGRADES ERP 1
Q1. Summary
The Abu Dhabi National Oil Company (ADNOC) is the oil company owned by the
government of United Arab Emirates (Marjanca, 2010). As per the Journal of Oil and Gas, in
2015, the UAE was announced to have the world’s 7th biggest established reserves of oil at
97.8 billion barrels. Approximately every reserve is placed in Abu Dhabi. In terms of
production, ADNOC is known as the 12th largest company of oil in the world (ADNOC,
2017). As per the analysis, it has been said that by production and revenue ADNOC
Company is the largest energy company in the world. In upstream, midstream and
downstream it comprises 16 subsidiary companies. Umm Al Nar and Ruwais are the two oil
refineries in which company operates. In the form of LNG (liquefied natural gas) natural gas
is exported by the company. Headquarter of ADNOC is situated in Abu Dhabi.
In 2015, Oracle Enterprise Resource Planning 1.2.2.4 was chosen by ADNOC in order to
deploy and utilize the platform of the latest technology at the middleware layer and
infrastructure. ADNOC has the aim to grow the competencies of the business process for the
benefits of the end users and to achieve the UAE smart government vision (Business Chief,
2015). Before implementing ERP company was using SAP so that it can support company in
overall business transformation strategy. Due to the aim of getting ahead of the competitors
functioning in same industry and fall in the prices of oil, they decided to change their
strategies from the top level to lower level. Along with this, it was identified that SAP was
costly as compared to ERP. Therefore company implemented new and latest technology i.e.
ERP by replacing SAP.
ADNOC offshore continuously pursues to add worth to ADNOC group by implementing
advanced technologies that add worth to its processes and assignments. These comprise smart
wells and stimulations, control systems, brownfield monitoring and artificial islands

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(ADNOC, 2017). The reasons behind selecting Oracle ERP was that it provides relatively
less cost than on-premises substitutes, it is a complete resolution for each part of the current
ERP puzzle, and it offers a helping hand into the cloud, etc. (Rimini Street, 2018)
In 2013, the “Oracle ERP” upgrade project was started in which more than 40 technical
resources were involved from the IT Division of Abu Dhabi National Oil. Along with this,
their partners were also involved in this besides 50 main business users for authenticating and
enhancing the procedures grounded in the standardization approach.
ADNOC face several challenges during the process of upgrade. Initially it faced the challenge
of extracting the information from the system of ERP specifically for the department of
finance. This is because of the reason that the data warehouse was generating simple data that
cannot be utilized for wide-ranging projects. Additionally, Ease Enterprise Resource Planning
incorporation of applications planned for deployment is one more challenge. For instance,
getting the country RFID to support in gathering complete details on clients and cars entering
ADNOC gas station, comprising fuel types, convenience usage, payment information,
capacity, and other services usages like vehicle washes and lubricant changes. The ultimate
challenge is to reduce the IT assistance cost and high growing data volumes. The upgraded
system was a success for the company because the whole platform was mobile-enabled and
modern convenience.
ADNOC has adopted the ERP implementation strategy i.e. clearly describe the necessities
before taking action. This strategy can be applicable to every type of business as those
businesses who do not keep a tight focus on particular procedures and system necessities will
face additional cost and time in the implementation of ERP (Compudata, 2016).
The culture of ADNOC is defined by the enthusiasm, energy, and unwavering passion of the
employees of the company. They are more focused towards inventing new solutions,

ADNOC UPGRADES ERP 3
adopting new technologies, raising the standard, and seizing opportunities across whatever
they do. This is the reason behind the successful implementation of the ERP upgrade in the
company.
Q2. Provide the detail information about how ERP update could help ADNOC in
achieving competitive advantages?
A wide system of a Company is ERP which combines with the business's primary
applications, comprising every levels and area of an organization. Every application in an
ERP suite shares a standard data set which is stored in the main database. The aim of ERP is
to offer a backbone for the computing business, combining the major process of management
and business in order to offer a view of sky-level. A proper ERP system’s implementation
helps business in gaining a competitive advantage depending on the company incorporating
the ERP system with its own procedures to make it exclusive and the time and cost put in will
be balanced by the system’s benefits.
Moreover, if ADNOC incorporates ERP in human resource, sales, and distribution
department then it could help them in easily hiring skilled and experienced people to achieve
the sales and distribution target in short time duration. This can result in gaining competitive
advantage for the company as hiring skilled labor in the competitive market is a major task.
The major advantage of implementing the ERP system in the operation of the company that it
decreases the operations, administration, and distribution cost by permitting management to
handle operations, delays and prevent disturbances, breakdowns information and assist users
in making decisions more quickly. In addition to this, the company can improve the quality of
the products that are offered to the customers which lead to customer satisfaction and
ultimately the company will be able to acquire large market share.

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Q3. With reference to the case study, describe the importance of Information Systems in
operating a business?
Decreasing the errors of human and increasing the efficiency of work are the important goals
of the owner of every company. But it cannot be attained without an outstanding information
system which is accomplished by offering the information business requires in small time
durations. Investing in the information system is important for every organization, and the
reasons are:
Organized Data
Managing information is very important for the company like ADNOC which is a well-
known brand in the market of UAE. With the help of excellent information system, ADNOC
is able to organize all the processes properly, able to get fast solutions and making quick
decisions in any situation. The management of the company is able to handle complete data
and enhance the business processes execution.
Information Storing
Information systems are suitable when it derives to storing data company needs it in a few
years’ time (Willcocks, 2013). For instance, ADNOC maintains all the details of oil and gas
and stores it in a data archive. The data archive can be opened and used by the company later
when needed. Maintaining the data or information manually on the hard copies and registers
is time-consuming. Along with this searching for any data is also time-consuming therefore
ERP upgrades are very good and beneficial decision for ADNOC.
Q4. What lessons can be learned from system upgrades based on the case study?
From the above case study of system upgrades, it can be learned that whether the company is
big or small it has to move and change according to the time. As the time is changing there
are many innovations and changes in the technology which is very important to update in the

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processes of the company. Besides this, implementing new and updated technologies helps in
saving a lot of time and cost of the company (Kaglik, 2015). The above analysis reflects that
Oracle ERP is very much cost effective as compared to other substitutes available in the
market. As per ADNOC Company, it is the complete solution for every problem or puzzle
because it works as a helping hand. Further, it has been learned that ERP update can help the
company in gaining a competitive advantage because of its efficiency in achieving the goals
in short time duration and improving the quality of the product.

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References
ADNOC. (2017). Our History. Retrieved from: https://www.adnoc.ae/en/about-us/our-history
ADNOC. (2017). Technology And Engineering. Retrieved from:
https://www.adnoc.ae/en/adnoc-offshore
Business Chief. (2015). ADNOC Distribution. Retrieved from:
http://middleeast.businesschief.com/ADNOC-Distribution/profiles/18/From-Tank-to-
Bank:-Adnoc-Distributions-IT-transformation
Compudata. (2016). Top 10 ERP Implementation Strategies. Retrieved from:
http://www.compudata.com/top-10-erp-implementation-strategies/
Kaglik, D. (2015). 5 Reasons To Upgrade Your Erp Solution. Retrieved from:
https://www.sapexpert.co.uk/reasons-to-upgrade-erp-solution/
Marjanca. (2010). United Arab Emirates Oil And Gas Competitive Intelligence Report 2010.
U.K: Business Monitor International.
Rimini Street. (2018). Why Oracle® Database Customers Choose Independent Support.
Retrieved from: https://www.riministreet.com/Documents/Collateral/Rimini-Street-
White-Paper-Why-Oracle-Database-Customers-Choose-Independent-Support.pdf
Willcocks, L. (2013). Information management: The evaluation of information systems
investments. Germany: Spsringer.