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Question:
 
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Managing Technology at Genex Fuels (Mini Case, p. 204-205)
 
Review the Managing Technology at Genex Fuels mini case. In a two to three page APA paper (excluding title and reference pages), address the following:
 
Discuss the evidence the CEO is using to suggest that Genex is not using technology competitively.
 
Explain whether or not Devlin needed to hire Sandy, a “high-priced technology consultant,” to tell him that technology at Genex was a mess. Justify your reasoning.
 
Devise a strategy to successfully implement enterprise-wide systems (such as SAP) at Genex.
 
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MINI CASE: Managing Technology at Genex Fuels
 
“You have got yourselves into a terrible predicament,” said V. R. “Sandy” Sandhuramen, his soft Indian accent belying the gravity of his words. “You are incredibly lucky you have
 
managed to do business as well as you have, but this situation cannot be allowed to carry on.” Sandy, a high-priced technology consultant, had been hired by Genex Fuel’s new CIO,
 
Nick Devlin, to review the company’s technology portfolio and help him and his newly appointed IT architect, Chuck Yee, get a handle on the firm’s technology needs.
 
Genex, a major producer of crude oil and natural gas, is the largest marketer of petroleum and petroleum products in the region. It is structured into three distinct business divisions,
 
each comprising a number of functional segments. Until recently, IT had been decentralized into the three divisions, with their own directors of IT who reported to the divisional
 
EVPs. Devlin, formerly the director of the corporate division, had been appointed CIO and given the specific mandate to bring in SAP as the primary technology platform for all the
 
divisions.
 
“We have to start behaving like we’re one business,” said the CEO when he appointed Devlin. “I want a much more agile and responsive IT organization than we’ve had in the past. It
 
seems to me that every time I ask IT to look into something I’ve heard or read about, they always come up with a thousand and one reasons why it won’t work. We need to be able to
 
use technology competitively, and that won’t happen unless you can get ahead of the curve.”
 
The excitement of his new mandate had lasted just about a week, until the true scope of the challenge became clear. He had asked each divisional IT director for an inventory of
 
hardware and software currently in place and to briefly outline the work that was in their plans for the coming year. “We must have one of every piece of hardware and software ever
 
produced,” Devlin marveled as he scanned their reports. On the one hand, there was a new customer management system called COMC, which had been implemented to improve
 
real-time information exchange between the company’s 135 bulk fuel sites and Genex headquarters. On the other hand, they were still running an archaic DOS-based marketing
 
system called MAAS to provide customer service and reports. “And they want to bring in SAP!” he groaned. “We need a plan and we need it soon.”
 
Running Head: GENEX FUELS 2
 
That was when Devlin had engaged Sandy to work with Yee. “First, I want a no-holds-barred assessment of our current situation,” he had said, and now they were in his office,
 
outlining the “terrible predicament.”
 
“The biggest problem you face at present,” said Sandy, “is the fact that you have absolutely no standards and no integration, as you discovered for yourself, Nick.” There was a lot of
 
technology out there—both old and new—and it was a political hot potato. Almost every system had its group of advocates, some very senior in the company. Each EVP had invested
 
his technology budget in the hardware and software that he felt could best support his work. The problem was that maintaining this mishmash was now costing an arm and a leg. And
 
it was highly doubtful that the company was getting true value for its technology investment.
 
“We should be able to leverage our existing investments so we can invest in new technology,” said Yee. “Instead, almost all our budget is taken up with holding these systems together
 
with toothpicks and Scotch tape.”
 
“One of the most challenging situations,” Sandy went on, “is Price One.”
 
Obsolete but absolutely essential, Price One is the fuel-pricing system that stores the pricing algorithms for all fuels marketing functions, including aviation, marine, retail, branded
 
associates, and industrial and wholesale. While pricing is an integral part of marketing, Price One cannot communicate with COMC and is not easily adaptable to changes in the
 
business environment. Price One perfectly reflected the business and technology that existed ten years ago, but this has now become a real drawback. To get around these limitations
 
while continuing to use Price One, staff manually feed information from pricing requests in COMC to Price One to get approval because both systems use different terminology in
 
coding products for different pricing methods.
 
That was when Devlin had engaged Sandy to work with Yee. “First, I want a no-holds-barred assessment of our current situation,” he had said, and now they were in his office,
 
outlining the “terrible predicament.”
 
“The biggest problem you face at present,” said Sandy, “is the fact that you have absolutely no standards and no integration, as you discovered for yourself, Nick.” There was a lot of
 
technology out there—both old and new—and it was a political hot potato. Almost every system had its group of advocates, some very senior in the company. Each EVP had invested
 
his technology budget in the hardware and software that he felt could best support his work. The problem was that maintaining this mishmash was now costing an arm and a leg. And
 
it was highly doubtful that the company was getting true value for its technology investment.
 
“We should be able to leverage our existing investments so we can invest in new technology,” said Yee. “Instead, almost all our budget is taken up with holding these systems together
 
with toothpicks and Scotch tape.”
 
“One of the most challenging situations,” Sandy went on, “is Price One.”
 
Obsolete but absolutely essential, Price One is the fuel-pricing system that stores the pricing algorithms for all fuels marketing functions, including aviation, marine, retail, branded
 
associates, and industrial and wholesale. While pricing is an integral part of marketing, Price One cannot communicate with COMC and is not easily adaptable to changes in the
 
business environment. Price One perfectly reflected the business and technology that existed ten years ago, but this has now become a real drawback. To get around these limitations
 
while continuing to use Price One, staff manually feed information from pricing requests in COMC to Price One to get approval because both systems use different terminology in
 
coding products for different pricing methods.
 
Price One also lacks the ability to link information from different systems to ensure data integrity. As a result, Price One has accumulated some irrelevant data groups under pricing
 
for products, and such corrupted data can be detected only by an experienced individual who has been dealing with that product group for decades and who would know at a glance
 
the validity of the data. Its inability to link with other systems, such as COMC, and to pick up competitive market information in order to approve price is a critical flaw with Price
 
One. Previous plans to rewrite this system have been resisted strenuously by management because of the expense. Now the system is on its last legs.
 
“And like most oil and gas companies,” Sandy observed, “you have automated very few of your information assets as other types of organizations have done.” Typically for the
 
industry, Genex had grown by acquiring other, smaller firms and had inherited an enormous amount of physical data. It now has more than two million items of paper and microfilm.
 
It has one hundred twenty thousand tapes of data. Some items date back to the 1940s and came from numerous sources. The company’s seismic assets, on which it bases many of its
 
decisions and has a replacement cost estimated at more than two billion dollars, are stored on a wide variety of media from analog tapes, magnetic reels,

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