ADNOC Chartered Institute of Procurement & Supply PDV Assessment 1

Question: This assessment tests the learning outcomes and module content of:

Module: Driving Value through Procurement and Supply

Module: Managing Expenditures with Suppliers

Task Identify a product, service or category of spend and outline its importance and impact to your organisation’s stakeholders. Prepare a brief market analysis and demonstrate how your procurement function will produce value for money outcomes.

Your final submission should also review the current approaches to managing prices and costs for the product, service or category you have identified, as well as highlighting the impact of markets to secure cost savings for your organisation.


Table of Contents      

Executive Summary. 3

1.0 Introduction. 4

1.1 Introduction to Abu Dhabi National Oil Company (ADNOC) 4

1.2 Procurement Division of ADNOC. 4

1.3 Scope of the Report 4

2.0 Stakeholder Analysis for ADNOC. 5

3.0 The Relevance of the Area of Spend to Stakeholders. 6

4.0 The Impact on Procurement from ADNOC Perspective. 6

5.0 Research and Market Analysis. 7

5.1 Data Analysis- History of Spend. 7

6.0 Market Analysis. 9

6.1 Market Analysis. 9

6.2 Market Position. 10

6.3 Variables used in IT Equipment Procurement in ADNOC Market 10

6.4 Marketing Mix. 11

6.5 Level of Industry Competition. 11

7.0 Current Approaches. 12

8.0 Best Practices. 13

9.0 Techniques for Analyzing the IT Equipment Market 13

9.1 PESTEL. 13

9.2 Kraljic Analysis. 14

9.3 SWOT Analysis. 14

9.4 Porters Five Forces. 15

10.0 Conclusion. 15

11.0 Recommendations. 16

References. 17

Appendices. 18

Appendix 1: ADNOC Procurement Workflow.. 18

Appendix 2: ADNOC Group Supplier Temporary Registration Request Workflow.. 19

Appendix 3: ADNOC Organisational Structure. 21

Appendix 4: ADNOC Procurement division Organisation Chart 22


Executive Summary

This report represents an evaluation of the ADNOC procurement of IT hardware equipment in UAE as a category of spend. My positionality informs the rationale for selecting the area of spend in the procurement division through active involvement in contracts, purchasing, commercial directory department, strategic sourcing, in-country value, and group procurement operations. Hence, individual position in the organisation offers the author with sufficient knowledge of the company contracting by the organisation. In the process of evaluating the procurement strategies in the identified area of spend, this report equally provides an evaluation of the relevant of ADNOC stakeholders in tandem with procurement and supply. This also includes an evaluation of how they influence price management and value addition. In the research, the market analysis in a quantitative and qualitative approach was used in offering appropriate data on ADNOC approach in sourcing the most appropriate IT hardware. As part of the process, data analysis, category analysis, market mix, market positioning and the level of the industry have also been analysed. To analyse the IT hardware procurement, tools such as PESTLE analysis, Kraljic analysis, SWOT analysis, Porter analysis and Ansoff elements are utilized. The techniques are used in highlighting the relevance of study and outcome.  This study concludes that the IT and hardware procurement in Abu Dhabi, UAE for ADNOC company is still in its growth phase and as such fewer companies engaged in the procurement. In recommendations, this study has suggested ADNOC Company set relevant procedures for implementation of the procurement procedures, improving the relationship between the management and stakeholders, practical approach in organisation resources management and development and an effective policy-making process.



1.0 Introduction

1.1 Introduction to Abu Dhabi National Oil Company (ADNOC)

The Abu Dhabi National Oil Company (ADNOC) is a world leading energy producer established in 1971 and headquartered in Abu Dhabi. Its operations are anchored in the overall hydrocarbon value chain through a network of fully-integrated businesses with diverse interests ranging from exploration, production, storage, refining and distribution of a wide range of petrochemical products. The company objectives are creating improved efficiencies through benchmark performance, integrating a balanced scorecard approach in the entire group and aligning with their key performance indicators. The company vision is working collaboratively in harnessing energy resources in services for the nation. Similarly, their mission is operating through partnership, innovation and a relentless focus on high performance and efficiency in maximising value for energy resources.

1.2 Procurement Division of ADNOC

ADNOC is committed to develop and maintain a competitive and sustainable supply chain for all their partners and the service providers. The company operations are effective and characterized by online and real-time supplier registration system for all potential suppliers, consistent tracking of prequalification statuses online, and tender invitation of all potential suppliers. It is a requirement for all the suppliers to complete a one-time registration on the ADNOC commercial directory for doing business with any of the ADNOC group companies. These strategies offer an ideal opportunity for the ADNOC Company for collaborative, web-based tools for procurement department and suppliers in implementing tendering and bidding activities online. However, all the procurement strategies are implemented with strict adherence to the roles and activities, pricing, risks and timelines set by the organisation.

1.3 Scope of the Report

The scope of this report has been narrowed from a broad perspective of modernisation of operations in ADNOC to procurement of hardware and IT equipment from the different suppliers in the UAE. In this case, the IT hardware and equipment represent the category of spend. From this angle, this study delves deeper into the evaluation of the impact of ADNOC stakeholders in line with the procurement and supply area. This has been attained through a focus on the provided course content techniques and process that are relevant to the procurement and supply in different areas of spend. Part of the analysis would also be inclusive of an evaluation of strategies set in place by ADNOC for prince management and value addition. This would be inclusive of an analysis of the proximity of the suppliers, level of modernization required, customers to be served and best practice to harness value for money.

2.0 Stakeholder Analysis for ADNOC

As noted by Manetti (2011) study, the stakeholders represent the groups with a direct influence or get influence from organisation actions, objectives and set policies. From a general point of view, the stakeholders in any particular organisation include the creditors, directors, employees, government, owners, suppliers, unions and communities. As such, the stakeholders vary and are dependent on the company and their industry of operation. Nevertheless, they can be categorised into the internal stakeholders, connected stakeholder, and external/ secondary stakeholders (CIPS Model 1, 2008). Taking into account the ADNOC operations, the internal stakeholders include the partners involved in the onshore and offshore processing, management, all employees. The external stakeholders include the community, regulatory bodies, non-governmental bodies and global energy companies such as Shell, Total, BP, JODCO and Exxon-Mobil companies. Their subsidiaries include ADCO, ADMA-OPCO, ZADCO, Al Yasat, Al Dhafra and NDC. Lastly, the connected stakeholders include the government, suppliers, competitors and the shareholders. Some of the stakeholders in this level include purchasing department manager, contracts department manager, strategic sourcing management and commercial directory department managers.


Figure 1: ADNOC Stakeholders

3.0 The Relevance of the Area of Spend to Stakeholders

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