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Giving Start-Ups a Chance
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Wednesday, November 07, 2001



 
In 1887, Northwest Ohio was America's oil production center, and Marathon Oil -- then the Ohio Oil Company -- formed to take advantage of the boom. However, not even the fourteen independent oilmen who financed the company could have foreseen how rapidly Ohio Oil would move from regional player to international powerhouse. In 1889, it became part of the Rockefeller oil empire. In 1911, it became independent once more. And, as oil began to play an increasingly important part in the global economy, Marathon Oil (as it was renamed in 1962) soon found itself maintaining business interests on six continents.

In order to execute on its mission -- "to find, produce and deliver petroleum, natural gas and other energy-related products" -- Marathon has to build and maintain complex infrastructure worldwide and is daily faced with the challenge of how to handle the vast number of documents and drawings that accompany construction. Mike Strathman, Marathon's director of global eBusiness, illustrates a dimension of this problem. "E-mail has increased the ability to send documents around. When you create multiple copies for users, each copy can take on a life of its own. But when a drawing changes, other people need to know that. Or what if you don't send it to everyone on the team? You have a disconnect."

When it came to finding a solution, Marathon had several choices: an established pure-play like Documentum, a broad solution from an ERP vendor (like SAP's mySAP Product Lifecycle Management), or start-ups.

The decision came down to core competence, and Marathon decided to go with two humble start-ups from Houston, PointCross and Wellogix. PointCross offers a project collaboration application, Orchestra, that addresses some of the problems inherent in "getting everyone to know everything they need to know about," as Strathman puts it. For example, when it comes to e-mail, "Orchestra integrates a 'smart' email and conferencing system. It sorts and files emails to the appropriate project context detail, whether an objective, requirement or a response," according to the PointCross website. Wellogix is a more specialized vendor focused on collaboration surrounding complex engineering services.

Why go with start-ups in the current environment? "Wellogix and PointCross are both start-ups started by people who came from the business they were trying to build an e-business around," says Strathman, impressed with the oil industry credentials of the start-ups' founders. "E-Business is about making sure you get connected to the best of the best of every function. If SAP doesn't have the best tool for complex services, I should find the people who do."

While mySAP PLM has customers in the same vertical as Marathon -- Shell and Pacific Gas & Electric -- Strathman is still inclined to distrust a packaged solution offered by a company whose background isn't oil. "It's not a question of vertical expertise, it's a question of focus. ERP software began as financial accounting systems -- it was built because different systems couldn't talk to each other -- and added on different bits of functionality. Now there are so many aspects to SAP, PeopleSoft, and the rest," Strathman says.

Part of the issue is customization. While mySAP PLM might be configurable to do exactly what Wellogix does, Strathman doesn't necessarily want to go through that process. "Wellogix is a unique product for exploration and production. They get into geology, pressures and temperatures of where you're drilling, whether it's water or land," he explains.

While admitting that Marathon could obtain the kind of solutions offered by PointCross and Wellogix from other, bigger vendors, Strathman is leery of them on another front. "The deeper you get hooked into a single vendor, the less opportunity you have to uncouple. That's the price you pay with single vendors," Strathman opines. What Strathman prefers to do is "plug and play" with vendors like PointCross and Wellogix so that their removal or addition won't affect the rest of the company's systems. This sort of problem-free unplugging is something he feels would be much more difficult if the products were from the SAPs or PeopleSofts of the world.

Responding to Strathman's perception of bigger vendors and their point solutions, SAPMarkets VP Peter Graf is adamant that, "Locking people in isn't the intention. Companies have already made a lot of investments in best-of-breed vendors, and we just want to help them integrate these systems." As far as Strathman's visualization of a "plug-and-play" process by which e-business modules can be replaced, Graf thinks such processes are in danger of turning into "rip-and-replace" debacles. According to SAP, a single infrastructure doesn't lock an enterprise into having to deal with a single e-business vendor.

Strathman admits that Wellogix and PointCross are still undergoing Marathon's review process. "Within a year we'll have figured out which ones we like and we'll build them deeper into the organization," he predicts, while noting, "We haven't bet our company on them." However, Strathman does take Wellogix and PointCross seriously enough to admit that over time, Marathon may standardize on them. "In the past, you had fewer options as a brick-and-mortar company. In today's software world, there are far more options."

Demir Barlas' story is part of a series looking at real e-business implementation experiences. If you have a story you'd like to share, contact us at prinbox@line56.com -ed


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