Building Sophisticated Intelligence at Royal Vopak

Royal Vopak started using the World Class Market Intelligence Roadmap right from the beginning in 2007 to set milestones and yardsticks for progress measurement in the intelligence initiative. In October 2007, Rene Loozen considers that they had largely reached Level 2 with regards to all Key Success Factors in the Framework, while the status in February 2009 was approaching Level 4. In the following we will look into what has happened in between.

Interviewed for this case was Mr. Rene Loozen, Business Intelligence Manager in the Commercial Excellence Department at Royal Vopak, a Dutch company and the world’s largest provider of conditioned storage facilities for bulk liquids.

Having been with the company since 2001 in various business analysis and project management related positions, Mr. Loozen joined Vopak’s Commercial Excellence program in spring 2007, with the task to start executing new strategic initiatives of which Business Intelligence was one. The “Business Intelligence network” was kicked off in September 2007, and in the same conjunction, an intelligence software tool was set up to serve as the centre point of the Business Intelligence program from the beginning.

The Business Intelligence Network at Vopak consists of members from each of the company’s 6 divisions, and the network has 1-2 workshops each year in addition to a teleconference held on a monthly basis. Each member in the Business Intelligence network has 20% of their time allocated to intelligence work, and they report to their respective supervisors. Rene Loozen’s supervisor reports to the CEO.

Developing Intelligence Activities at Vopak with the Help of the World Class Market Intelligence Roadmap

Level 1 ““ The Inauguration of Intelligence Work at Vopak in Mid-2007

“We started the journey towards more systematized intelligence operations in 2007, says Loozen, who describes the starting situation as follows:

  • Market information was scattered over the different Vopak divisions and business units
  • No policy existed on how to share this information/knowledge
  • The perception prevailed that the effectiveness of the intelligence process within Vopak had to improve in order for the company to become more competitive

At the same time, a number of market developments suggested that bringing the intelligence activity to the next level was in order:

  • The pace of change in the market is accelerating every year > increasing market dynamics
  • The oil and chemical industry is increasingly globalized > Linkages between different regions are essential
  • Emerging economies play an increasingly important role in Vopak’s business
  • The number of competitors is growing
  • Vopak seeks strong organic growth, for which an effective intelligence process is needed
  • Vopak’s Board of Directors had identified 17 strategic improvement initiatives of which Business Intelligence was one

“As a result, we understood that we needed to take an approach to intelligence development where different aspects were developed in parallel”, Loozen says. “M-Brain (formerly GIA)’s World Class Market Intelligence Framework seemed to fit the purpose well”, he continues.

Level 2 ““ End-2007

Having completed the very first tasks such as intelligence status analysis and the formulation of Business Intelligence objectives and working principles, Vopak had an initial idea of how the intelligence activity should be developed, going forward.

A “Business Intelligence mission statement” was articulated as “to increase our competitiveness through a better decision making process, which is based on better analysis of and maximum insight in our business environment”. Also, at Vopak “We don’t want to be surprised” gained support as a tagline for the intelligence activity.

The main goals for Business Intelligence were identified as:

  • To ensure efficient communication mechanism for sharing knowledge
  • To coordinate and improve Business Intelligence at Vopak in order to take more proactive and better informed decisions and to become more competitive
  • To become a serious business partner for customers, both internal and external

“One obvious step in the initial phase was of course to structure the use of external business information sources”, Loozen says. “We had a number of information sources in use throughout the company, and we tried to identify the best ones that could be used throughout the company.”

The Business Intelligence network described in the beginning was also set up in the same conjunction, and since it was soon understood that an intelligence platform was also needed to support the intelligence process, a software tool was selected and implemented to serve the purpose. “We definitely didn’t want to start developing something from scratch in-house, simply to save time and effort for more important things. That’s why purchasing a software product was an obvious choice for us”, Loozen comments.

Level 3 ““ An Expanded Intelligence Scope Yields An Increasingly Comprehensive Understanding Of Market Dynamics

Rene Loozen describes the evolution of the Intelligence Scope at Vopak: “We understood that the scope of the intelligence activities must be rather broad if we were to really understand change and to identify emerging business opportunities. Naturally the scope also needed to link to the expertise areas of the members in the Vopak Business Intelligence Network.”

Business Intelligence efforts were subsequently organized around the following topics:

  • Competitor Intelligence
  • Product Flow Intelligence
  • Market Intelligence
  • Customer Intelligence
  • Major Trends in the Business Environment

The portfolio for Intelligence Deliverables has also come a long way since mid-2007:

  1. In early 2008, a Competitor and Market database was launched that includes information about market definitions, size, share and growth. Vopak also had to identify which terminals would be viewed as competitors and which ones would not.
  2. Based on the above database, Competitor Profiles were developed. This was also the start of strategic competitor benchmarking on a regular basis.
  3. Product Flow Intelligence was developed to provide analysis of the global market dynamics for different products like benzene, methanol or biofuels.
  4. Quarterly Market Share presentation was set up for the executive Stratcom committee that consists of Vopak’s Board and divisional presidents.
  5. Global Market Reports provide insight into customers’ market dynamics and strategies.
  6. Trends in the business environment describe major macro and micro level trends that may have an impact on Vopak’s business.
  7. Global Customer Survey is now being conducted in which 2,600 customers and 1,400 third parties (service providers for customers, agencies, trucking companies, shipping companies) are surveyed for their perception of Vopak’s services.

Level 4 ““ Continuous Development

“I believe now that we are on level 4 on M-Brain (formerly GIA)’s World Class Market Intelligence Framework”, Rene Loozen says in February 2009. “We have all the fundamental elements in place, and have now shifted the focus on raising the level of analysis of our deliverables, and on developing the “˜soft’ issues such as the culture of knowledge sharing within the organization.”

One particular current initiative is to survey all intelligence users at Vopak for their perceptions about the quality of the Business Intelligence function. In addition, tighter integration of the Business Intelligence output into various business processes is very much on the agenda at this stage. An increasingly collaborative approach has been taken here, with arranging Business Intelligence workshops and regular meetings and teleconferences among Business Intelligence representatives and the end users within the different business units.

“To conclude, it is my feeling that we now have a broad scope but also analytical depth in what we produce”, Rene Loozen says. “We are future oriented in our approach and frequently use scenario analysis in combination with forecasting as methods to understand the future dynamics of our industry. One example is that we have a project focusing on as far as the year 2035″, Loozen continues. “We have an intelligence network in place and are producing deliverables that have been tied into our strategic and operational business processes. We also have an Intelligence platform to collect, store and share our business information and intelligence reports.”

Areas for Improvement

Intelligence culture: “People are sharing more and more knowledge, and we also enjoy the strong support of our Board to the intelligence operation”, Loozen says, “but I still think we could do even better. I guess the challenge is that people are on different levels of experience with regards to intelligence, which does influence their willingness to share market information.”

Marketing of the Intelligence Activities: “One of the tools to enhance the Intelligence Culture is definitely marketing, which in our case is a quarterly Newsletter that our Commercial Excellence department publishes. Business Intelligence plays a big role in the publication already, but we still need more concrete examples of success stories”, Loozen explains.

Lessons Learned at Vopak

Step by step development process: It is important to focus on one step at the time, and to do it according to a proper intelligence implementation plan of which the World Class Market Intelligence Framework is a useful example in our experience. Good contacts with management in order to prioritize the work are of course also essential.

Well defined Intelligence deliverables: Delivering valuable intelligence output is the key to the success of the entire intelligence program. “We started with the intelligence software tool as the first “deliverable” in the sense that it made intelligence something tangible that could be used by many different groups within the company”, Loozen says.

Proper Business Intelligence network management and Personal contacts: Expectations need to be managed in a Business Intelligence network where people participate in on a part time basis and always have their own division as their first priority. Training is also required to bring the Business Intelligence network members to the same level. At the same time, it helps tremendously to have an extensive network of people in the company that goes far beyond those that actually have intelligence included in their job description.

Support from the board: It is of course vital to have the top management’s support, and as few layers between management and the intelligence operation as is meaningful.

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