The petrochemical industry plays a fundamental role in our economy. While it is most visible in providing the fuel on which nearly all motor vehicles run, it is also the source of a multitude of `downstream products`. These include agricultural chemicals such as (pesticides, herbicides and fertilizers), industrial chemicals and other items such as plastics, asphalt and synthetic fibres.
An industry of such importance is a large investor in information and communications technology (ICT), confirms Phil Savides, regional chief executive of Business Connexion`s Cape Town region. "Not only is the petrochemical industry a large consumer of technology services, it also has some unique requirements," he says, explaining that there are specific business applications [such as the IS-Oil module within the SAP enterprise resource planning solution] covering items such as densities, volumes and temperatures.
"Most of the Business Connexion employees providing services to the petrochemical industry have a petrochemical industry background. As such, we combine an understanding of the petrochemical business with a large client base and provide services in accordance with technology management best practices," he adds.
Like many other industries, most organisations in the petrochemical industry seek to optimise the cost and benefits of their ICT requirements through the proven benefits of outsourcing.
"The concept of providing technology as a managed service has been welcomed by numerous industries both locally and abroad. The fundamental value proposition is that ICT is a specialised field that can be better handled by a third party supplier," says Savides.
This approach also results in the benefits of economies of scale - technology systems are not competitive differentiators for petrochemical industries, so even competing companies can use the services of the same provider in some instances.
As Africa`s most accomplished provider of ICT outsourcing services, Business Connexion has an established capability to address these and other specific requirements of petrochemical companies. For six years it has acted as the trusted technology outsource partner of one of South Africa`s leading petrochemical companies, which has an extensive local and international presence.
"Our company has a proven track record in designing and implementing business solutions for many of the continent`s most successful public and private sector organisations," continues Savides.
"One familiar element of this industry is the pricing of petrol. This is done according to a very specific formula with taxes and duties applied at different stages during the calculation of the pump price. The technology used by this industry has specifically been altered to cater for these specific requirements," he says.
Since the industry deals in large volumes using mechanisms such as pipelines, oil tankers and large containers, Savides adds that these elements add further complexities to the technology used and require specific configurations to effectively manage the full supply chain.
Another unique aspect of the petrochemical industry is an exchanging of product similar to bartering. "Oil companies normally accommodate other oil companies on their premises. Transactions exchanged between these different oil companies are balanced on a monthly basis and only the variances settled," he explains.
Savides reports that Business Connexion has established capacity to handle the specific requirements of businesses operating in this market. Over and above its existing market share, he believes there is significant scope for the organisation to expand and to assist other companies to benefit from what he describes as a vast chest of skills and knowledge applicable to this industry.
"In South Africa, the petrochemical industry is relatively small compared to the US and Europe. As the oil industry is still regulated, the operating models of the various oil companies do not differ significantly from one another. As a result, Business Connexion can play a major role in the petrochemical industry and can even start looking at becoming a facilities hub for certain shared services to the industry in future," he concludes.
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