BP Deepwater Horizon: Program and Portfolio Management Report

This report provides a detailed analysis of the BP Deepwater Horizon oil spill, examining the incident through the lens of program and portfolio management. It explores general system management, organizational structure and culture, and the critical role of risk management in preventing such disasters. The report delves into portfolio alignment, business value considerations, and the portfolio management process cycle, highlighting how these elements could have mitigated the impact of the incident. It further discusses the importance of organizational maturity and the application of these concepts in the context of the BP Deepwater Horizon case, emphasizing the need for proactive measures to avoid future tragedies. The analysis underscores the importance of adhering to regulations, promoting a culture of safety, and implementing robust risk assessment strategies to ensure project success and protect stakeholders.

Program And Portfolio Management Information System

Contents
INTRODUCTION.......................................................................................................................................3
GENERAL SYSTEM MANAGEMENT....................................................................................................3
ORGANISATIONAL STRUCTURE AND CULTURE.............................................................................4
RISK MANAGEMENT..............................................................................................................................4
PORTFOLIO ALIGNMENT.......................................................................................................................5
BUSINESS VALUE....................................................................................................................................6
PORTFOLIO MANAGEMENT PROCESS CYCLE..................................................................................7
ORGANISATIONAL MATURITY............................................................................................................8
CONCLUSION...........................................................................................................................................9

INTRODUCTION
Program management refers to a way of enhancing company performance by managing
various tasks according to their capabilities and productivity ((Archibald and Archibald, 2016). ).
Success of the project is directly associated with the activities conducted by the company to
attain their preset goals and mission. In this report, BP Deep-water Horizon Oil Spill and
Offshore Drilling incident is taken for consideration which happens in Gulf of Mexico. In the
final stage of drilling, the rig exploded due to which more than 10 people have lost their lives
and leakage of oil has killed various wildlife species and animals (Kerzner, 2017) . Different
types of general system management and organizational structure will be discussed in the report
which could assist them to avoid destruction if properly implemented. Besides this, risk
management techniques will be explained by mentioning the benefits of it. At last, portfolio
management process cycle and organizational maturity would be discussed and how companies
can use it to avoid any kind of fatalities in their premises.
GENERAL SYSTEM MANAGEMENT
The deep water drilling is one of the points in BP strategy statement which has become
their weakness and affected many lives and company’s future in a negative way. System
management approach considers whole company as an open system and all their sub or working
unites as subsystem. This approach is used by company to organize their operations according to
company’s strengths and capabilities so that any kind of risk would be avoided in the future
(Danesh, Ryan and Abbasi, 2018) . This approach starts with taking different types of inputs in
to their system and produced desired output after processing it. For instance, commissions have
already suggested BP workers to take advice from any knowledgeable On- shore engineer for the
pressure test of oil. But on the other hand, BP management has ignored this input from the
commission and stick to their plan resulting in massive explosion and death of 10 workers on the
rig (workers could have prevented rig accident, 2019). Besides this, company name Halliburton
was also included in this preventable incident as formula which is used while using cement at the
time was not stable and vulnerable due to which it happens. It can be said in the last that whole

incident could be avoided by BP if they have properly walked on the rules and guidelines made
by the government and their own management.
ORGANISATIONAL STRUCTURE AND CULTURE
Organization structure and its culture is essential for any company if they want to sustain
their market position as it assist them to innovate with their products and services resulting in
high customer satisfaction. From the starting, BP has hierarchical structure in which every single
entity has different sub entities and completely depends on each other. One of the main
drawbacks of this approach is that if any single unit is not working according to company’s
mission and goal then communications between the departments affected resulting in negative
outcomes for the company ((Fisher and et. al., 2014)). To avoid these types of situations in the
future, BP must use combination of divisional and flat hierarchy in their organization so that
more authority would be provided to the employees resulting in higher overall productivity of
company (Martinsuo and Hoverfält, 2018) .
BP has been using adhocracy culture which mainly depends on risk taking actions and
innovation with the aim of doing things first. Companies in this sector should try to avoid these
types of culture as chances of getting right results are very less and the price to pay after the
wrong decisions is very high. For instance, to get better result, BP employees have replaced their
heavy drilling mud with lighter seawater prior the well which was not even prepared at that time
(BP COULD HAVE AVOIDED DISASTER, 2019). To avoid this in future, company should
focus on promoting right talent for higher post and make proper incentives plans so that
employee’s motivation would remain high resulting in better outputs. So it can be said that BP
should use Clan culture in their organization which mainly focuses on nurturing of employees
and their knowledge (Types of Organizational Culture, 2019) so that no incident would occur in
the future.
RISK MANAGEMENT
Risk management refers to a process of identifying and analyzing all the factors which
could transform into threat in future (risk management, 2019). Main motto of using this approach
is to eliminate and tackle all the factors which could affect company’s performance and earnings

in a negative way. Different steps of risk management process is mentioned below with
functional example of it,
Step 1: Identification of risk: It is the first step in which Deepwater horizon works to take into
consideration, the various factors which could become the risk or affect company’s operation in
a negative way (Valentine and et. al., 2014) . For instance, various factors like closing of well at
the time of explosion, cement evaluation test, capabilities of employees etc should be properly
evaluated before even starting the project.
Step 2: Analyze the risk: After identifying all the factors, it’s now the responsibility of
company to assess the level of impact it could make in the future (Risk Management Steps,
2014). It is essential for project manager to complete project risk register on a daily basis so that
each and every risk would be properly analyzed.
Step 3: Evaluation of risk: This is one of the important stage in which all the risk is assigned
with the rank according to its impact on operations. For instance, chances of not getting any
result is high if cement evaluation test of well is not properly done by the employees (Sanchez
and Terlizzi, 2017). So higher ranker should be assigned to it so that proper measures would be
taken by BP to avoid it.
Step 4: Treatment of risk: All the effective measures which should be taken by BP to avoid
those expected risk comes in this stage. For instance, knowledgeable company should be hire by
BP and their allies so that chances of error would be reduced to zero. Apart from this, stability of
well and its cement should be properly check before digging the well (Morozov, Kalnichenko,
and Liubyma, 2017) . By this way, all the potential risk could be avoided by BP if they have
worked according to management and government regulations.
Step 5: Continuous monitoring: Company will only sustain in their existing position if they
continuously monitor the risk which they could face in future (Risk Management Process, 2019).
BP should continuously monitor the risk which they have not due to which millions of money
and life of workers has gone.

PORTFOLIO ALIGNMENT
It is a strategic process in which operations of organization is aligned with company’s
goal to enhance their profitability over a period of time according to their skills and capabilities
(Project portfolio management, 2019). For instance, before digging the rig, BP should make the
blue print of project by analyzing all the factors which is essential in this work. By doing so, all
the risk would be analyzed before it even occurs thus saving millions of dollars. Moreover,
portfolio alignment would also assist BP to improve their capacity and resources planning so that
higher efficiency would be attain by them in the future. At last, it can be said that if BP has used
portfolio alignment in Gulf of Mexico then this incident might be avoided. For instance, after the
incident took place, survey was released in which 60% of people prefers to support those
companies who are alternatively investing money in green energy (BP oil spill, 2019). Before
starting this, BP should have taken care of this factor as more people would be interested in
buying BP shares which leads to higher profitability and more investment. Apart from this, with
the help of portfolio alignment, errors can be eliminated as it provides about the weakness that
company has. For instance, In September 2008, BP owns the rig in Caspian sea in which same
incident has already happened. But the management of BP has ignored their weakness and start
working on the Gulf of Mexico resulting in destruction of company’s fund and environment
(Deepwater Horizon oil spill, 2019). In other factor, BP has not evaluated the cement well as it
is essential to know whether cement has bonded correctly or not. If not then proper actions
should be taken by them. But BP has also ignored this factor which leads to horrifying incident.
BUSINESS VALUE
It refers to a set of values which determines company’s performance in the long run or all
the benefits which are generate by company for their company and stakeholders (Beyer and et.
al., 2016). . It includes factors like economic profit, impact on society or societal value,
employee values etc. Business values are intangible in nature but it plays an essential role in the
success or destruction of company in the competitive market. BP only focuses on getting higher
return from the Gulf of Mexico due to which they have malpractice their own rules and
regulations due to which oil spill incident occur. For instance, one manager has emailed their BP
headquarters regarding the qualification and expertise of site leader which is violation of
company’s policy but management did not entertain his concern resulting in losses of life and

money (The BP Gulf Oil Spill, 2019). In other incident, BP has used low density nitfried foam
cement which is not ideal for these kinds of situations due to which company could not be able to
seal the well at the time of explosion.
PORTFOLIO MANAGEMENT PROCESS CYCLE
As organizations are highly dynamic in nature, majority of the companies suffer from the issue
of making differentiation between the good and bad. The investments which generally looks
good in writing does not mean that in reality they will contribute towards the success of the
business organization. Therefore, for this purpose, the manager of Deepwater Horizon must need
to take into consideration the adoption of portfolio management lifecycle which is regular and
continuous set of different activities in order to provide success (King and et. al., 2015). In this
project lifecycle, there are three phases which includes planning, authorizing, monitoring and
controlling. These phases play a vital role in the project management which could have
controlled the incident that took place in the organization and life of various people have been
saved (Eroshkin and et. al., 2017) . This lifecycle will going to help the business organization in
various ways and they are discussed below:
 Improvement in project selection procedure: It will put emphasis on selecting the right
kind of project which will be best suitable for the organization and consist all the relevant
features which could meet the project aims, objectives, resources, risk, etc. The primary
motive of this lifecycle is to make proper and critical evaluation which will deliver
maximum value to the organization.
 Collaboration with competition: In large business companies, majority of the
departments compete with one another rather than working together for the common
business goal. This is one of the major issues which will be effectively handled and
managed by portfolio management lifecycle that provides an assurance of project
alignment with appropriate strategies with standardized approach in order to make
evaluation of different approaches. Furthermore, this helps in eradication of repetition of
work and promotes the team member to work collectively with team spirit in them.
 Effective and efficient use of resources: The resources are further used in a more
effective and efficient manner. The project management lifecycle provides a more

rounded approach where each resource is allocated effectively and proper utilization of it
is made for the better operation of the project by minimizing the wastage of materials
(Incardona and et. al., 2014).
ORGANISATIONAL MATURITY
The organizational maturity is a model of framework which is used by various organizations for
the purpose of establishing the measurement tool towards the progress and excellence of
performance (DeLeo and et. al., 2016). By adopting this model in the Deepwater horizon, the
manager could take into consideration the four prominent steps of the model which will helps in
overall operations and functioning of the system. The five stages includes, defining the project,
implementing , evolve and improve the performance. In real sense, this model is very useful for
the project manager in deep horizon company where it act as a tool or guide for making proper
and appropriate selection of processes, improving different strategies by supporting the
capability and potential for the current process and identifying the problem or hurdle which is
most crucial for the quality and superiority of the within a respective field (Yang and et. al.,
2016). The important business practices in which this model works effectively includes, setting
organization strategy, structure and support, workflow processes, managing skills and
competencies, etc (Nicholas and Steyn, 2017).

CONCLUSION
From the above report, it can be concluded that oil leak in Gulf of Mexico could have
been avoided if management have taken precautions while conducting their drill. It is essential
for company to focus on nurturing of employees through proper incentives and profession
development as then only their highest productivity would be achieved which results in better
results for company. Apart from this, proper risk management must be practice in company so
that obstacle would be identified and tackle before it harms company’s performance in the
market. Business value must not be compromised by company in any circumstances as it always
leads to lower quality of output generated or no output at all.

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