With over 7,000 employees in 12 countries across Europe and Asia including France, Spain, Bulgaria, Ukraine, Georgia and Romania, KMG International (Rompetrol) is a well-established oil company and an important player in the Black Sea and Mediterranean basins. The group is primarily active in refining, marketing and trading, with additional operations in exploration and production, and other oil industry services such as drilling, EPCM and transportation.
In Romania, where it is based, Rompetrol owns the most technologically advanced refinery in the country, Petromidia, with a refining capacity of 4.5 million tonnes crude per year. The refined products are delivered through 450 fuelling points in the country, as well as other neighbouring countries and the Black Sea basin.
Business Challenge: Selecting an Outsourced IT Model
To support rapid growth, Rompetrol elected to redesign its IT infrastructure. However, having begun the transformation in 2005 and in the subsequent four years until 2009, IT costs had ballooned. At its peak, the IT team swelled to 140 people and reducing costs to increase the company’s profitability became imperative. In 2010, the management team restructured IT again, outsourcing the entire function except for one employee, who remained within the company as a point of contact. While the arrangement included a flat fee plus change requests for any new projects, the requests were so numerous and complex that overall IT costs went up.
The vendor also held over 100 contracts with other providers to fulfil Rompetrol’s requests, adding to the complexity and cost of delivering IT services and exposing the company to greater risk. By 2012, new management decided IT had become a significant risk for the business operationally and financially. There was a clear need to optimise costs while providing a higher quality and greater range of services.
A New Model for IT Efficiency: Deploying ‘Virtual Engineers’
With the help of an external partner, Rompetrol designed a new hybrid IT model wherein functions such as governance, strategy and vendor management were to be managed internally, while most operational execution would be outsourced. On the operations side, Rompetrol elected for a approach to infrastructure support designed to cut costs and increase efficiency – the first line of resolution for issues was to be an entirely automated solution.
To accomplish this, Rompetrol turned to IPcenter, an autonomic ITSM platform from IPSoft. IPCenter provides a cadre of “virtual engineers” that work like a company’s best engineers, but faster, cheaper, and with assured output quality. Similar to human engineers, they can talk to one another and work together to resolve complex, dynamic problems. IPcenter autonomically resolves an average 56% of all incidents without human intervention and up to 90% of Level 1 incidents.
Set to underpin Rompetrol’s entire IT infrastructure, IPCenter was to provide a portal allowing total visibility of data and unprecedented transparency over operations.
Before this advanced technology could be leveraged within the new hybrid model, the first step was to take over, renegotiate and consolidate the existing 100+ IT contracts. This was met with hostility by the sole outsourcing vendor, which refused information access and knowledge transfer.
The transition environment from the outsourced model to the new hybrid model was particularly difficult to manage given the lack of access to data that the outgoing service provider allowed. Using traditional technologies, it would have taken many months to collect, document and bring under control the all of the assets that were transferred back under the management of the new team. Rompetrol faced an incredibly tight window before the transfer of services and needed to complete the transition without impact on the continuity of service to the business. The pressure to gain control of the systems and stabilise service immediately post-transition was immense, given the lack of previous information available.
Despite these obstacles, Rompetrol CIO Marcel Chiriac worked with partners to transition the responsibility of all IT services—from strategy to contract management—to a new team of 26 people in under 3 months.
IPsoft played a critical role, bringing in a very experienced team and its IPcenter platform to quickly gather information on the IT operations that were going to be transferred. The team made preparations to secure the infrastructure and underlying devices including multiple datacentres, hundreds of servers, hundreds of applications and complex networks across many countries.
Results and Outcomes
Within the first month, more than 2,000 configuration items such as servers and network switches were placed under IPsoft’s management using IPcenter, including all Rompetrol’s 750+ gas stations connected to the Rompetrol WAN. Stand-out results include:
· The transition of the entire infrastructure support under a new set of vendors, governed by a new contract, with much better SLAs and transparent costs, was finalised in less than 2 months, with no significant un-planned outage
· In the first year after the transition finalised (2013), Rompetrol saved 27% in IT operating expenses compared with the previous year
· The number of IT contracts was reduced from over 100 to 48
· Service quality improvements have also been fully noted by Rompetrol’s staff. In 2013, a customer satisfaction index survey was run within the business, giving the IT team a score of 4.2 out of 5 compared to a previous score of less than 3
In 2014, the second year of the model, focus has been able to shift from management of costs, which are at an efficient level of spend, towards continuously improving the quality and the range of services delivered. The automation of key elements within the IT function thanks to innovative autonomic technology has played a critical part in achieving these results in a short space of time. By utilising ‘virtual engineers’ to perform mundane issue-related tasks, resources have been freed up; people are able to provide more strategic value and are set to drive Rompetrol’s IT model to even greater heights.