Client:
Halliburton
On the Web:
www.halliburton.com Project:
Outsourcing
Shortcut to
Business Challenge
How Accenture Helped
High Performance Delivered Executive Summary
Halliburton set out on a bold mission to build a global and
seamless organization from among its hundreds of subsidiaries. The company
partnered with Accenture to help it transform from decentralized operation to a
globally managed entity.
Business
Challenge In 1996, the Halliburton leadership made a bold move. The
risks were high, but so were the potential rewards.
With revenues of $11 billion and growing, Dallas-based
Halliburton was already one of the world’s leading providers of energy products
and services. Its capabilities in oil and gas exploration and production—from
generating computer models of reservoirs to designing and building offshore
platforms and servicing oil fields—had benefited energy companies worldwide.
But to propel Halliburton to greater success, the company’s leaders decided to
pursue a new strategy: integration.
Over the years, Halliburton had acquired and created
several companies in efforts to diversify. Each of the divisions retained its
own administrative structure, so that within Halliburton there were multiple
departments for accounting, payroll and other business processes. Now, in order
to energize growth, Halliburton wanted to link all of these business units and
move from a decentralized operation to a globally managed entity.
“Our goal was to become a lean, nimble organization that
could provide seamless solutions to our customers,” says Halliburton executive
vice president Gary Morris. “An integrated strategy would differentiate us from
competitors and position us to capture greater market share.” Halliburton’s
leaders called their vision Halco 21.
In such an ambitious initiative, missteps would prove
costly. The Halliburton team knew they needed additional skills to achieve
their goal. They quickly decided to partner with Accenture to embark on the
journey.
How Accenture Helped Upping the Ante At the time, close to 100 Halliburton employees had already
transitioned to Accenture in an outsourcing arrangement with Halliburton Energy
Services (HES), the company’s largest division. Accenture was handling
applications management for HES. The first year of the outsourcing contract
proved highly successful, with a $1.4 million reduction in application support
costs. Over the next two years, service levels were maintained and costs
decreased another $4.3 million.
But Halco 21 represented a much larger effort, one that
would require a deeper relationship with Accenture, bringing to the fore not
just the firm’s outsourcing services but its consulting skills and
industry-specific knowledge as well.
Against the Odds A key prong of Halco 21 was the consolidation of
Halliburton’s systems into a common enterprise resource planning (ERP)
infrastructure, which would replace approximately 300 legacy applications—a
Herculean task, even for information technology specialists.
“We had endless legacy systems that didn’t ‘talk’ to each
other, so none of the business units knew what other business units were doing,
even though they often dealt with the same customers,” explains Alan Horden,
Halliburton vice president. “We wanted a common platform so that our managers
could access information to help them make smarter business decisions.”
With Accenture’s guidance, Halliburton selected SAP as its
infrastructure. A full suite of SAP modules would handle major business
processes including order to cash, purchase to payment, manufacturing, project
management and controls, Health/Safety/Environment, HR/payroll, accounting, and
management reporting. Accenture consultants would work with Halliburton to
design and build the systems; Accenture’s outsourcing team would run them,
taking full advantage of its ability to manage large-scale projects.
True to Halliburton’s vision, the SAP implementation would
preserve a single design across all business units—making it one of the largest
global implementations of SAP ever. The entire application, affecting
approximately 13,000 users, would be run out of Houston, Texas. Adding to the
challenge was the deployment’s geographic span—more than 350 sites in 78
countries—and the fact that the project had to be completed in 18 months, in
time for the dawning of the 21st century. Halco 21 had to live up to its name.
The stakes were high. Multiple challenges were the norm
with any enterprise-wide deployment. Y2K paranoia was in full force, with many
companies intensively focused on compliance efforts. Halliburton was making a
bold wager: that with its partnership with Accenture, it could conquer SAP and
Y2K simultaneously.
With characteristic speed to execution, a combined
Accenture/Halliburton team made it happen. Deployment to HES was complete by
the end of 1999.
Ahead of the Game Looking back, Accenture partner Bill Miller is proud of the
achievement. “Halco 21 was really a transformational undertaking for
Halliburton, and we appreciated the opportunity to help from the beginning,”
says Miller. Accenture’s consulting and outsourcing services enabled
Halliburton to focus on strategic work and its core business while going
through major changes, including a multi-billion-dollar merger with oilfield
services provider Dresser Industries.
The outsourcing arrangement also gave Halliburton a better
equipped information technology staff, attests Bill Elliott, a computer
programmer who transitioned into Accenture in 1995 after 11 years with
Halliburton.
“Accenture’s highly trained people and global network of
experts helped us to solve problems faster,” says Elliott. “We eliminated
tedious research and avoided costly errors and delays.”
A Team Effort In 2000, the relationship between Accenture and Halliburton
evolved from pure outsourcing to a co-sourcing arrangement. Halliburton’s ERP
Solutions Team is an integrated team made up of both Accenture consultants and
Halliburton employees, with shared responsibility and accountability.
Halliburton thus leverages Accenture’s experience and global network while
developing skills in its own employees and further reducing costs.
Today, Accenture continues to provide global support for
Halliburton’s applications including SAP, Siebel, Data Warehousing and other
point solutions for health, safety and environment applications. The firm is
involved in all major phases of Halliburton’s SAP efforts, including a systems
upgrade and deployment to the acquired Dresser Industries’ business lines,
which will add about 4,000 end-users.
Building Trust From his office at Halliburton, surrounded by the buzz of
activity from Accenture and Halliburton colleagues working side by side,
Accenture partner Mark McNulty remarks that his commitment to Halliburton
extends even to his dealings with people within the firm.
“When partners from other parts of Accenture pitch
alliances or new business to our team, we evaluate the opportunity from a
Halliburton point of view,” says McNulty, who is the Unit Lead for the
Halliburton Solutions Team. “We’ve been working with Halliburton executives for
years now, and we’ve established a certain level of trust and knowledge of
their business.”
Halliburton reaffirmed that trust in early 2001, when it
signed a five-year master service agreement that encompasses much more than
information technology. The agreement establishes Accenture as a preferred
provider across every division of Halliburton.
“The new arrangement extends our long-term relationship
with Accenture which is built on a foundation of trust and performance,” says
Halliburton’s Horden.
High Performance Delivered High Risks, High Rewards The aggressive Halco 21 vision is now largely reality, with
Accenture helping Halliburton realize SAP’s full benefits by conducting user
training and putting process metrics in place. Today, Halliburton managers no
longer have to translate data from one application to another, losing valuable
time in the process. The integrated system yields focused, meaningful reports
that enable Halliburton managers to transform their business.
“We’re unlocking knowledge about our customers, our vendors
and our resources that’s allowing us to achieve economies of scale,” says
Horden. “And we’re just beginning to unearth the value of the information
that’s in the global system.”
To Top |