BOKO/G Plc Company - Integration of Smart Glass Devices - Case Study Example

Executive Summary BOKO/G Plc Company still remain one of the largest company in the United Kingdom in the exploration and production of oil and gas. However, with the competition in energy sector rising and many companies coming up, there is a need to incorporate new technologies in the operation of the company. Smart glass devices are one of the new technologies industries in the exploration and production of oil and gas uses to enhance their production. However, there is a lot of resources needed by the companies in order to implement the technology into their production especially in terms of skills and knowledge. This paper gives how the use of smart glass device is likely to enhance revenue generated by BOKO/G Plc Company. Analysis of the market, human resources, technical resource and financial feasibility is done in order to assess how the new technology can be incorporated. Table of Contents 1.0 Introduction 3 2.0 Market Feasibility 3 2.1 Experienced Challenges 4 3.0 Technical Feasibility 5 4.0 Human Feasibility 7 5.0 Finance Feasibility 8 Payback 10 Breakeven 11 Return on investment (ROI) 11 6.0 Conclusion 11 Bibliography 12 Appendix A 13 Appendix B 14 Integration of Smart Glass Devices 1.0 Introduction BOKO/G plc is one of the leading oil producing company based in London and Iran with operation in over 17 countries and territories in the world. It has more than 37,500 employees and ranked among the fortune 500 companies in the world. This business plan intends to give a road for the possible large scale production of gas by BOKO/G plc through the use of smart glass devices in different parts of the world. As the issue of climate change becoming one of the major concern for both oil and gas exploration and production companies and government, ways of limiting the amount of emitted greenhouse gas is critical. Currently, major companies concentrate on oil and gas exploration and production with only small companies left with the role of producing the gas. As a result of this, different customers from various parts of the world do not get the gas and instead use oil as the major source of energy (Phillips, Stone, and Phillips, 2001). The use of smart glass devices in the mining of oil and gas is becoming of great use by most of big energy companies. BOKO/G plc as such can take advantage of implementing this plan into action. Through the incorporation of smart glass devices in the mining of major sources of energy, BOKO/G plc is likely to capture over 8% of the total market in the next three years of the implementation. This business plan looks at market, technical, financial and human resource feasibility and gives ways of how best the project can be undertaken (Vincenzini, In Righini, International Conference on "Smart Materials, Structures, and And Systems" 2008). 2.0 Market Feasibility BOKO/G plc is one of the largest company dealing with oil and gas exploration and production. Based in London (European headquarter) and Iran (The Middle East headquarter), the company operate in more than 17 countries and territories in the world. BOKO/G plc generated over $82.6 million for 2015-2016 financial year. Though the market for oil and gas exploration and production is becoming more competitive with some more coming up, concentrations of BOKO/G Plc Company in the production of gas which is more environment-friendly will see it increase its market share to over 8% in the first three years of implementation. Drawing its customers from over 17 countries and territories of its operation, BOKO/G plc need to look for a better technology of enhancing its gas production in large to meet the need of the growing customers. With the government regulation on the use of oil as the major source of energy in different parts of the world, more customers are likely to be registered by BOKO/G Plc Company over the world (Vittas and World Bank 2000). 2.1 Experienced Challenges Production of gas is getting more obstacles with the issue of environment concern emerging. The cost of producing a gas, the efficiency of technologies used, and the safeness of the end product of the gas are among the challenges different companies struggle to meet. Furthermore, as have been observed in different oil and gas producing companies, there is a decline in the production rate due to lack of knowledge and expertise needed to run the current technology used in the exploration and production. With the highly skilled workforce retiring and the younger workers taking over the role, meeting the customers’ specification is becoming a major challenge for most of the companies. The cost of deploying the use of technology such as smart glass devices is very high for small companies dealing with the exploration and production oil (Frank 2013). Government rules and regulation on the production of oil and gas is also a challenge for most of the oil and gas companies. According to these regulation and climate issue challenge, companies are required to leverage on the production of greenhouse gas which most of the small companies find very difficult to meet. Furthermore, BOKO/G Plc Company operate in different countries in the world and each has legal system on trade. Meeting these requirements while at the sometimes maintaining its position in the world market means reducing the cost of production and producing quality and safe gas product in large scale. Though competition has been observed in the oil and gas production sector, new competitors find it very difficult to emerge. The cost of producing a safe and quality oil is very expensive for these starting companies. With the focus being given to the environment-friendly gas, using traditional technique is being removed and more advanced technology such as smart glass devices used. These equipment are very expensive for the small scale company (Babusiaux 2004). 3.0 Technical Feasibility For large scale production of gas which is more environment-friendly and easy to explore, smart glass devices will be used. Due to the fact that smart glass devices is a new technology in oil and gas production and exploration, there is need to have a full a design done by the company itself in all the 17 countries and territories of operation. However, this requires a lot of training for the employees on the use of this technology. Experts in the use of smart glass devices are required to help in training and overseeing the implementation of the technology in all areas of operation of BOKO/G Plc. Management and maintenance of the technology are done by the equipment providers as the employees from the technical departments undergo the training on the same (Faulconbridge and Ryan, 2003). The production of gas through smart glass devices will be done by BOKO/G Plc Company in all the areas it operates. BOKO/G plc remains the largest explorer and producer of oil and gas in the world with a major focus on the production of a more environment-friendly gas. Currently, BOKO/G Plc Company uses distributors and sale representatives to channel their oil and gas products to the customers located in various parts of the world. This is done through a legal way according to the countries of operation trade agreement requirement. (Bret-Rouzaut, Favennec, and J.-P 2011) BOKO/G Plc Company is a large organization with over 37,500 employees with different skills in oil and gas exploitation and production. Though equipment with capable human resource, BOKO/G plc’s employees lack relevant skills on the use of smart glass devices in the exploitation and production of gas. This calls for training of its employees on the use of the technology. BOKO/G plc will use the raw materials it has for the exploitation of oil and gas with a major focus being on the production of quality and safe gas. Components and equipment on the smart glass devices will be supplied in all the 17 countries and territories of BOKO/G plc operation by Smart glass international company based in Dublin, United Kingdom (Vittas and World Bank 2000). Various laws and regulation are used in the exploitation and production of gas of which majority are industry standard or regulation and environment liability. With the issue of the climate change becoming a point of focus by most government and international bodies, ways of producing a more quality and safe gas is critical. Industries standard and regulation in all the oil and gas producing countries all focus on the equipment used for production. The traditional equipment which is inefficient and enhance the emitted carbon gas are discouraged by the industries. With the emergence of more companies using the new technology of smart glass devices in the production of gas and oil, there is likely to be a stiff competition arising in the sector. However, the cost of using this technology is quite expensive for some of the company making it difficult for them to venture into the business (Argonne National Lab, United States, United States, Veil, and Environmental 2007). 4.0 Human Feasibility The use of smart glass device in the exploitation and production of safe and quality gas require technical and management experience. BOKO/G Plc Company has been in operation for quite sometimes with its employees having diverse experience in oil and gas production. However, there is a lot of training needed for the employees to enable them manage and efficiently use the new technology in their operation. For the introduction of smart glass devices, entrepreneurs, managers, and technical experts have a role to play as shown (Konate 2010). Owners Roles Management Approving on the use and purchase of the smart glass devices. Requesting for the training of employees from the experts of smart glass devices. Introducing the technology into BOKO/G plc company Acting on the Reviews expanding the use of smart glass devices Technical team Introducing the new technology (smart glass devices) into the company Testing the products of the technology Extending the use of smart glass devices into entire company with the help of the management Experts (suppliers) Training the employees on the use of smart glass devices Detail of the purchase Consultants Reviewing the performance of the new technology and product The manpower requirements entail those with relevant skills in the energy sector and on the use of smart glass devices. Currently, BOKO/G Plc Company have enough manpower with experience in the exploitation and production of oil and gas. However, with the introduction of new technology and the need of the company to focus on the exploitation and production of a safe and quality gas which is environment-friendly, there is need to train the employees on the use of the technology. The introduction of the technology will see the revenue generated by BOKO/G Plc Company increasing to £8.2 in the next three years. Employees reward in terms of increase in salary and knowledge in the use of modern technology will be given based on the role each play on the overall productivity of the company (Konate 2010). As a way of assessing the quality of the products, evaluations will be done to determine whether the new devices meet the set objectives of producing quality and safe gas. Different stages will be evaluated along the project development in order to examine possible risk with appropriate mitigation taken where risk is observed. For the purpose of managing and maintaining the quality of the products, the company will adopt the use of Post Implementation Review (PIR) with a focus based on providing documentation for future. Organization structure will definitely change with the replacement of the traditional technology with smart glass devices. A major focus will be on the technical department of the company with the number of employees on the exploitation sites reducing. The career path will change for most of the BOKO/G plc company’s employees with necessary skills in the use of smart glass devices increasing among the employees (Konate 2010). 5.0 Finance Feasibility The use of smart glass device for the exploitation and production of environment-friendly gas is approximated to grow by 12% of the market share with net income of £8.2 in the next three years. His will see BOKO/G Plc Company attaining a return on investment (ROI) OF 6.3 at the end of the three years. According to the report by Tractica, annual wearable device shipments is likely to increase from 85.0 million units in 2015 to 559.6 million unit in 2021. This represent about 36.9% of the compound growth rate (Lantz, Leventhal, Baring-Gould, and National Renewable Energy Laboratory (U.S.) 2013). Based on the analysis of the market on the use of smart glass device, selling price per unit cost £ 600 with a total expected revenue being £ 840,000 in the estimated three years. The below cost structure below shows cost structure, variable costs, gross margin per unit, fixed costs per unit and net margin per unit. For the effective exploitation and production of oil and gas majoring in environment friendly gas, investment in experts, equipment, research and development, legal and operating expense prior to breakeven. Before the payback period which last for one year and three days, the company will have to take the cost of operation. There is legal requirement depending with the country of operation when it comes to incorporation of devices which the company must consider in the budgeting Lantz, Leventhal, Baring-Gould, and National Renewable Energy Laboratory (U.S.) 2013). The incorporation of smart glass device in the operation of BOKO/G Plc Company will have great financial risk for the company. The devices are very expensive and as such, there a lot of finance to be used for training and purchasing the equipment. Since these devices uses electricity, power shortage can lead to breakdown in the system operation. However, the risk associated with these business plan is less compared to the reward from the investment. The investment in the use of smart glass devices is the best option for enhancing the company competition anywhere in the world Lantz, Leventhal, Baring-Gould, and National Renewable Energy Laboratory (U.S.) 2013). The major source of finance for the deployment of smart glass devices will be BOKO/G Plc Company’s stakeholders. BOKO/G Plc Company is a large company with capital needed for the investment. Furthermore, there high possibility of the company getting back the invested money in one year and three days according the calculated payback period. The company will have to consider rolling out the use of smart glass devices in its base of operation before expanding to other branches to enable evaluation process to be done (Phillips, Stone, and Phillips, 2001). Payback Payback for BOKO/G Plc Company investment on smart glass devices is as shown Payback = Year Cash Flow (£) Cumulative Cash Flow (£) 0 840,000 840,000 1 800,000 80,000 2 1,450,000 1,420,000 TOTAL 3,090,000 2,340,000 Payback = = 1.3205 I year and three days Breakeven Breakeven for the table below is as shown Break-even quality = FC/ (average price per unit-variable cost per unit) FC= 840,000/ (600-120(480)) = 1750 Return on investment (ROI) Gross revenue £ Net revenue £ 600,000 985,500 500,000 7,566,950 800,000 16,950,000 Total net revenue £13,847,450 ROI= 13847450-840,000/840000 = 15.49 6.0 Conclusion The incorporation of smart glass devices in the operation of BOKO/G Plc Company especially in the mining of oil and gas will likely to enhance the revenue generated to significant extent. BOKO/G Plc Company in itself is a very big company with all the required resources for implementation of the new technology. However, for the expected objectives to be achieved, much need to be done on training of the existing employees on the usage of the device. Good management both from the company side and suppliers is critical for smooth roll-out of the device to all branches of the company. Bibliography Argonne National Lab, United States, United States, Veil, J. A., & Environmental, S. D. 2007. Trip report for field visit to Fayetteville Shale gas wells. Washington, DC: United States. Office of Fossil Energy. Babusiaux, D. 2004. Oil and gas exploration and production: Reserves, costs, contracts. Paris: Editions Technip. Faulconbridge, R. I., & Ryan, M. J. 2003. Managing complex technical projects: A systems engineering approach. Boston: Artech House. Frank, R. 2013. Understanding smart sensors. Konate, B. N. 2010. The feasibility of introducing strategic human resource management in a non-western organisation: The case study of the parliament of Burkina Faso. Bonn: Scientia Bonnensis. Lantz, E., Leventhal, M., Baring-Gould, E. I., & National Renewable Energy Laboratory (U.S.). 2013. Wind power project repowering: Financial feasibility, decision drivers, and supply chain effects. Phillips, J. J., Stone, R. D., & Phillips, P. P. 2001. The human resources scorecard: Measuring the return on investment. Boston, MA: Butterworth-Heinemann. Vincenzini, P., In Righini, G. C., International Conference on "Smart Materials, Structures, & And Systems". 2008. Smart optics: Proceedings of symposium B "Smart optics" of CIMTEC 2008-3rd International Conference "Smart Materials, Structures and Systems", held in Acireale, Sicily, Italy, June 8-13 2008. Vittas, D., & World Bank. 2000. Pension reform and capital market development: "feasibility" and "impact" preconditions. Washington, DC: World Bank, Development Research Group, Finance. Appendix A Start-up Expenditure and Expenses Item Cost £ Beginning inventory 840,000 Capital equipment 4,567,845 Licenses and permit 287,500 Startup supplies 1,860,500 Utility hookups and installation 343,000 Other 650,000 Total 7,898,845 Appendix B Start-up Operating Expenses ITEM COST £ Employees’ salary, wages and benefits 8,655,500 Supplies and postage 780,050 Vehicle expenses 830,000 Maintenance 354,000 Other 1,220,500 Total (total cash requirements plus 10% safety factor) 11,840,050 Read More