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 Plans for IT department in the future?..................................................................2
4 What kind of sub strategies support IT strategy?.................................................2
5 What are your focus areas?.....................................................................................2
6 Key Performance Indicators...................................................................................3
7 Risk Strategy.............................................................................................................3
8 Preventing Risks.......................................................................................................3
9 Outsourcing...............................................................................................................4
10 Conclusions...............................................................................................................5
11 Bibliography..............................................................................................................6
HAAGA-HELIA Report 1 (6)

1 Introduction

How does Neste Oil stay ahead of its competitors and keeps itself on the top of the Finnish
oil market and Baltic states. Neste Oil is one of the larger Finnish oil refining companies,
which strive to advance furtSher 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
HAAGA-HELIA Report 2 (6)

3 Plans for IT department in the future?

They want to start using cloud computing, this consists in a net that is based on internet
service so this way the users can have access to different services without the need of
having this information saved on their computers they only need to be on the company’s
domain.
This will help to the company in many ways since they will be able to make more efficient
processes, share information within other Neste Oils in the world saving a lot of time in
requests and applications, have all the information saved in the same place as a support in
case if anything happens and save money on hardware (since they would share the same on
from the “cloud”) between other advantages anyway they will have to be careful because
they will “always” have to be in the “cloud domain” to work in a company project, they
will always need the connection (internet via cables or Wi-Fi), they would have to upgrade
the security issues to avoid any kind of stolen information and they have to be aware of the
possibility of the servers to overload due of many people using it at the same time.
 

4 What kind of sub strategies support IT strategy?

They are changing focusing on the services they provide and the tools that are needed for
the business; for example:
 The service strategy is being developed to get a stronger link between company and
users, this will help the company to improve their existing products and at the same
time develop new ones adapting to the market requirements and possible trends in
the future
 The architecture strategy is guided to make many applications that are close
between them into a one big process. This way the same persons will be involved
with the whole process making it easier and faster; for example, there are many
applications between the when the fuel is done until it gets to the gas station or
from there to the cars/trucks.
 The HR part they are making research of the skills and competences that will be
needed in the future so they can focus on them while hiring or developing in their
own employees.

5 What are your focus areas?

They are focus by the time in learning to manage in different ways the partnerships that
they have and their own vendors so they can find the best way to do it with each one. Also
they want to make a better hierarchical control in the projects managing the information in
a discriminative way to see what’s important or not so they can make the best work-time-
money relation. At the same time they keep the focus in reliable production and on the
products that made them the big transnational company that they are now-a-days moving
forward with new businesses and expanding the company, for example right now with the
newest head office at Singapore or a similar project in Rotterdam that’s in process.
The Singapore project is the world's largest renewable diesel plant and it was a project that
spent the planned money (550 million) and time. Here they will ve doing Neste Oil's
NExBTL renewable diesel, between its qualities it can be used alone or mixed up with
fossil diesel enabling 40-80% reduction in greenhouse gas emissions (comparing wit fossil
diesel).
HAAGA-HELIA Report 3 (6)

"We are very proud of the new plant and the NExBTL technology behind it, which is based on our
in-house R&D. NExBTL represents a major Finnish innovation in the field of renewable fuels and
we believe that it has excellent potential in the global marketplace"
President & CEO Matti Lievonen.

6 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 uses mostly following KPIs:

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

7 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..

The document contains elements like:

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)

8 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
HAAGA-HELIA Report 4 (6)

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
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

9 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
HAAGA-HELIA Report 5 (6)

10 Conclusions

Presenting key findings + conclusions

Personal opinion
HAAGA-HELIA Report 6 (6)

11 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