e-fill at the Shell

It has been said that no business hides its gems like the utility business, and for Shell Australia, the current lack of inertia with their bid for Woodside petroleum has been offset by yet another e-commerce acquisition for the petrochemical giant.

Announcing the acquisition of 50 percent of e-fill, Shell Australia’s Bruce Rosengarten said today, “This acquisition provides the technological infrastructure and business competencies to help us launch our own e-business solutions in the future.”

The deal sees Shell Australia take a fifty percent stake in the ecommerce fulfilment service e-fill, and will also see the multinational roll-out touch screen terminals in all of its subsidiary outlets around the country, a project currently being trialled in Victoria. The pick-up proposal is similar in nature to the agreement between BP and Wishlist, which saw service stations act as pick-up points for customers who had ordered products from the e-tailer.

Shell has been an active player in the electronic commerce environment, and 2001 has seen the petrochemical multinational already spin off part of its business into a wholly independent software and e-services firm. Kalido Data Warehousing is the product of this venture, a spin-off from Shell’s IT services arm. Earlier this year Shell undertook a mammoth overhaul of its information technology systems when it signed off on a global IT infrastructure overhaul, due to be completed by 2002. Shell estimates cost savings of 30 percent over the total cost of ownership of its computer infrastucture worldwide.

Shell has also set itself other e-commerce targets to streamline its business using the web, and it has actively been pursuing global procurement contracts, attempting to achieve a streamlined and automated web-based supply chain process, rationalise its telecommunications functions and networks and rationalise, or spin off, it’s information technology services.

Shell’s research suggests it can shave $640 million a year from its operations in Australia through a two pronged strategy, outlined by Eric deMeer, Vice-President of eCommerce, who last year outlined the company’s approach to using the internet to reduce costs, announcing the formation of eShell, described by deMeer as a “Division with a mandate to create and grow new business opportunities beyond the boundaries of our existing business sectors.”

This followed on from Shell’s involvement with CommerceOne, where the company took a share of the electronic marketplace, to establish a procurement exchange for the petroleum industry. Other partners in the venture include BP Amoco, Conoco, Dow Chemical, Equilon Enterprises, Mitsubishi Corporation, Motiva Enterprises, Occidental Petroleum, Phillips Petroleum, Repsol YPF, Statoil, Tosco, TotalFinaElf and Unocal.

It is estimated that total procurement costs for the companies involved are in the order of $125 billion annually, with 40 percent spent in the North and South American continent, 40 percent in Europe and Africa and 20 percent in Asia and the Middle East.

Shell has also used the web to streamline its communications and ordering systems with its rural Australian customers, launching Optibuy in 1999, a procurement one-stop for service station owners, with an auction site and a service called FreightMatch, which provides an online venue for customers to match freight loads with unused capacity as listed by freight companies, enabling customers and freight companies to cut down on costs and unused freight space.

In Europe, Shell has established a free ISP, called 12move, utilising its service station network in Holland, Belgium, Denmark and Germany to distribute sign-up packages. The move is typical of Shell’s internet plays, being a joint venture with the WorldOnline ISP and establishing a presence for the company in a new technology market. “This model allows the venture to operate quickly in the ISP market place, while

ensuring sufficient ownership with the retail business.” Said deMeer of the 12Move business, adding that “The venture has not only established Shell as a credible ISP, but has also been a useful learning experience in how to operate in B2C internet space”.

Shell Australia’s retail deal with Harris Scarfe is entirely consistent with the company’s global plan and sees Shell’s retail outlets in Australia operate in the first instance as pick-up points for goods ordered through the retailer’s d-store network. There are over 8200 service stations in Australia, with around 3000 run through franchise-operated subsidiaries of the oil refining companies.

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