NESTE OIL

Esa Kokko
Guillermo Avila
Jürgen Suls
Teresa Luoma-ah

Report
Introduction to IT strategic
thinking
BUS4TF007
December 8, 2021
Abstract

 Background or point of departure

 Score & objectives op report
 Methodology employes
 Timeframe
 Result and conclusion
TABLE OF CONTENTS

1 Introduction..............................................................................................................1
2 Neste Oil....................................................................................................................1
1.1 History..................................................................................................................................1
1.2 Activities...............................................................................................................................1
3 Key Performance Indicators...................................................................................2
4 Risk Strategy.............................................................................................................2
5 Preventing Risks.......................................................................................................2
6 Outsourcing...............................................................................................................3
1.3 Title.......................................................................................................................................4
1.3.1 Title.......................................................................................................................................4
8 Conclusions...............................................................................................................4
9 Bibliography..............................................................................................................5
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1 Introduction

How does Neste Oil stay ahead of its competitors and keeps itself on the top of the
Scandinavian oil market. Neste Oil is one of the larger Finnish oil refining companies,
which strive to advance further and sell the most innovative products. In this report you
can find most strategy element with which a company like Neste Oil has to deal with.

2 Neste Oil

Neste Oil Corporation is a Finnish oil refining and marketing company. There main
activity is producing low-emission and high-quality transportation fuel, they also produce
other refined petroleum products.

1.1 History

Neste Oil exists now 62 years. It was founded in 1948 to provide Finland’s need for oil. In
that year they bought their first tanker, which was named ”Neste”, and started importing oil
to Finland.

In 1954 the company emerged with one oil refinery at Naantali and in the following years
its capacity only increased. And more oil refineries were build. They started researching in
Natural gas, chemicals, and exploration and production in the 60s and established itself as
a retail service station brand.

Later on they continued to grow and expand their business to the company they are today.
Now they try to achieve world’s leading supplier of lower-emission traffic fuels. At the
moment Neste Oil has aproximatly 5200 employees and is active in more than 10 countries
around the world.

1.2 Activities

The company is active in 3 business areas: Oil products, Oil Retail and Renewable fuels.
Neste Oil produces, refines and markets oil products. It also does the shipping and the
engineering services, pluss licensing production technologies.

For the Oil Products it procures the crude oil and other raw material that is processed at
their refineries. After that it is sold and traded.

Renewable Fuel of Neste Oil is called NExBTL diesel which is produced sold by the
company. It is one of the strongest rising products.

Neste Oil’s Oil Retail is the leading station chain in Finland and part of the top three
largest retail stations in the Baltic States, St Petersburg and Poland. It sells the most
important oil products
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3 Key Performance Indicators

When we talked about Neste Oil’s Critical Succes Factors (CFR), it immediatly became
clear that they do not use that term often. But they rather use the term Key Performance
Indicators (KPI). Although these terms have total different meaning is still is interesting to
hear what the KPIs of Neste Oil are. KPIs or just PIs is a term to measure performance of
an organization. It is used to evaluate the organizations succes or of a certain project or
activity.

KPIs when correctly developed should be provide all staff with clear goals and objectives
and how they are responsible for the success of the company. They can also strengthen
shared values and create common goals internally..

Neste Oil IT department use mostly following KPIs:

 Application maintenance cost
 Cost related
 Performance
 Personal and end user satisfactions
 Project cost
 Reducing number of applications

4 Risk Strategy

Neste Oil doesn’t call it Risk Strategy, but Corporate level risk. Every year they decide
what they need to avoid and make a list of these risks. They talk about things like what
information risks there are, vendors they have to avoid and problems with
datacommunication.

Of this they make a document to be prepared for those risks and to be able to respont
correctly to a risk..

1. policys, principals.
2. information security risk.
3. business continuity planning (risk department is running, it is supporting)
4. project management risks (depending of the project, also project has its own risk list)

5 Preventing Risks

They collect all the risks and the amount of risks in a database, where they compare all the
risks amd there possible impact on the business. They categorize every element of the list,
normal, critical, top critical. The higher the impact and probability the higher its category
will become. If a risk is a bigger threat and dangerous, then they will allocate more
resources to prevent such a risk.

From all this data they make a recovery plan, which contains the most important risks and
their category. The recovery plan also contains how to respond to those risks to minimize
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their effect. This last part is especially important, because when a risk occurs, that recovery
plan can prevent huge costs and loss of time.

The company has 4 potential risk strategies from wich they can choose from.
 Accepting the risk: taking the chance that the risk will occur
 Avoiding: Use resources to prevent risks from occuring
 Mitigate risk: Try to minimize its impact
 Transfer risk: Outsource it to a third party

6 Outsourcing

Neste also use outsourcing for certain projects, but say outsourcing has its risks and is
sometimes quite the challenge.

The biggest challenge is that they still have to recruit a lot of people to manage outsourcing
projects. The control is lower with outsourcing and Neste realises that. They aren’t always
sure if they will get the best service and solutions and the outsourcing company doesn’t
always understand Neste Oil’s business.

The company does their outsourcing on 3 different levels:

 Operation level: daily operations, maintenance groups
 Tactic level: invoice, volumes, developing groups
 Strategic level: how to develop relations
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7 Conclusions

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8 Bibliography

Author(s). 2010. Title of page. URL: http:// . Quoted: 17.10.2010.

Neste Oil. 2010. Corporate Info: History. URL: http://www.nesteoil.com/default.asp?

path=1,41,537,2396. Quoted: 20.11.2010.

Neste Oil. 2010. Corporate Info: In Brief. URL: http://www.nesteoil.com/default.asp?

path=1,41,537,2455. Quoted: 20.11.2010.

Neste Oil. 2010. Business Areas. URL: http://www.nesteoil.com/default.asp?

path=1,41,11991. Quoted: 20.11.2010.

Wikipedia.2010. Risk Management Plan. URL:

http://en.wikipedia.org/wiki/Risk_management_plan. Quoted 21.11.2010

Reh J. 2010. About.com: Key Performance Indicators (KPI). URL:

http://management.about.com/cs/generalmanagement/a/keyperfindic.htm. Quoted
21.11.2010

Interview

Mr. Keskiivari Kari. 29.10.2010 CIO. Neste Oil. Representative - Finland. 14.10.2010.
Interview. Helsinki