By Frank Jossi
When oil giant Atlantic Richfield Co. (widely known as ARCO) merged with BP Amoco this April in a $27.6 billion deal, they created one of the largest oil companies in the world. But along with the big money came big job losses. Several thousand employees lost their jobs in the transaction, including all 650 people at ARCO’s principal technology center in Plano, TX.
While the merger did not require this group to turn over its enormous library of data and archives dating back more than 35 years, ARCO’s executives figured transferring the knowledge made good business sense.
This article originally appeared in the July/August 2000 issue of Inside Technology Training and appears on TechRepublic under a special arrangement with the publisher.
Preserving information in a usable format
Knowledge management—a formal procedure for capturing, storing, transforming, and disseminating employees’ expertise within an organization—can be a thorny problem even under the best circumstances. Most organizations subtly encourage a culture of knowledge hoarding by promoting and rewarding the employees who know the most.
Getting those same employees to make a sudden switch to openly sharing their expertise can be difficult, if not outright impossible. But if you think that’s a tough sell, try convincing employees to hand over their hard-won knowledge to a company that just gave them a pink slip.
“It was hard to convince people to sit down and transfer what was in their heads,” said Bill Nelson, who had to shut down the Plano facility. “Many people want to take that knowledge to their next job, but you don’t want that to happen. You have to think about what enforcement tools you have to get the job done. You can get people to do it for you without having to use a big stick.”
ARCO embarked upon this difficult path using customized knowledge management technology developed by a vendor, along with input from employees.
“We wanted a system that was easy to navigate,” Nelson said. “We didn’t want to just hand over 50,000 boxes labeled ‘stuff,’ which would never have any value at all.”
A mountain of information
In an age where information quickly becomes obsolete, one of the biggest roadblocks to effective knowledge management is determining which information to save and which to toss.
Before the merger with BP Amoco, ARCO stored data in three off-site locations, each with up to 100,000 boxes of archives ranging from 20-year-old soil samples to 10-year-old paper reports of drilling conditions in Kazakhstan. One Oracle database alone held 700,000 records. Another mountain of digital information existed in 40 data management programs that ARCO used during the past 20 years.
Why keep this mountain of data? “Because within the pile are gems of important information related to oil explorations, patents, and intellectual property,” said Mark Armentrout, who was manager of information technology for exploration and production in Plano. To figure out how to sort through the data, he appointed a six-person committee led by Nelson.
Getting outside help
Nelson’s group decided the job of sorting and categorizing the information was too big to do alone, so they hired RWD Technologies Inc., a knowledge management company in Columbia, MD. RWD’s software and interface allow companies to tie together existing databases, giving users a way to search for information stored in several different formats.
RWD’s executive director, Larry Myers, describes ARCO’s data as an iceberg with three layers. The highest level contains the most valuable assets. The second level is work in progress stored on employees’ computers in formats such as Lotus Notes, Word, and WordPerfect. The third part of the iceberg included older hardcopy reports and items like soil samples that can’t be stored electronically. This layer also includes information held in “meta-databases” such as Oracle, Access, and FileMaker.
During the ARCO/BP Amoco knowledge transfer, employees contributed to the second layer—the work in progress. Myers asked them to clean up their data, and submit information to a predetermined location on the server. Since the majority of this information was in text form, the Dataware software automatically indexed information once a day. In exchange for their efforts, employees received severance pay.
In the end, nearly all of the 650 permanent employees from the technology center took part in the effort.
A searchable knowledge base
Once the information is stored, a simple Web interface allows BP Amoco employees to search the collection and receive clustered hits with a relevancy rating. A search for information on oil drilling in Gabon, Africa, for example, would yield results from all of the company’s repositories.
“The data would arrive in clusters under various headings such as ’best practices,’ ’core samples,’ and so on,” Myers said, “with several hits under each heading.” Text-based documents appear the same on screen, regardless of whether they were originally developed in Lotus Notes, Word, or another program. Other results lead employees to hard-copy reports and seismic data, including their location and tracking numbers.
A growing industry
ARCO’s system arrives at a time when the knowledge management industry is poised to explode. International Data Corp. (IDC), a research firm in Framingham, MA,, says companies in the United States will spend $900 million this year on software, a figure expected to jump to $4 billion by 2003. Knowledge management consulting services will experience even greater growth, leaping from $1.3 billion last year to $8 billion in 2003.
IDC estimates the sector will grow more than 40 percent annually worldwide, as corporations begin to realize that having the right people with the right knowledge can make the difference between success and failure.
“It’s the number one issue for upper management and for leaders of companies,” said Greg Dyer, senior research analyst at IDC.
Capturing explicit and tacit knowledge
“Technology does a good job of accessing, organizing, and collecting ’explicit’ knowledge like the kind found in written documents,” he said, “but capturing the ’tacit’ knowledge found in the minds of employees is a more elusive goal.”
Luckily, the ARCO division was not starting from scratch. Armentrout had established a knowledge management program back in 1995. His goal was to shorten business cycles by giving scientists and oil exploration experts a quick and easy way to gather data before charging forward on projects. Within three years, Armentrout saw the cycle time for planning and launching projects drop from six months to only one month.
The transfer of information from ARCO to BP Amoco was a different matter, though. The ARCO committee and RWD felt pressure to get it right the first time.
“We were building a one-time application, and we wanted to give BP Amoco the benefit of ARCO’s technology,” Nelson said.
The project cost around $1 million. Its completion came with a bittersweet tinge. Nearly all the employees at the Plano technology center are gone. (Approximately 150 were offered other jobs within BP Amoco.) “They donated years of research and knowledge, in part just to ensure their hard work has a legacy at BP Amoco,” said Armentrout, who has since left the firm.
Do you have employees store their ideas in a central place? Does your company have a knowledge management system in place? Tell us what works for you when it comes to managing and preserving institutional information.
Frank Jossi is a freelance writer in St. Paul, Minn.