Baseline 500: Company ProfilesBy Baselinemag | Posted 2006-10-15 Print
Chesapeake Energy, Ruby Tuesday and others explain why they made the rankings.
Chesapeake Energy: Looking Out For No. 1
Headquarters: Oklahoma City, OK
2005 revenue: $4.7 billion
2005 net income: $948 million
Chesapeake Energy has ridden the roller-coaster oil-and-gas industry with hands in the air and a mile-wide smile. But there's nothing cavalier about the way the company makes decisions. From the chief executive on down, managers rely on information technology to bring them deep and refined data to make the right choices.
Chesapeake's stock price has climbed and plunged along with industry oil prices since the company's founding in 1989—including a bracing drop from $34 to 63 cents during a two-year span in the 1990s. But Chesapeake has flowered from a startup led by two 29-year-olds with $50,000 to a $4.7 billion powerhouse today. From zip to 24,000 drilling locations across six states, it's now the third-biggest producer of natural gas in the U.S.
That advancement demands a new level of discipline and management that, Chesapeake executives say, would have gotten in the way early on. But the company still scraps: Ranked No. 1 in the Baseline 500 this year, Chesapeake outpaced larger competitors such as Anadarko Petroleum, at No. 46, and ConocoPhillips, at No. 78.
"We haven't lost the entrepreneurial spirit, with fast-paced, decisive management," says Cathy Tompkins, chief information officer at Oklahoma City-based Chesapeake. "It's a real refreshing environment for most I.T. people." She joined Chesapeake two years ago from Devon Energy, a close rival.
Chesapeake topped our ranking last year, too, and has since taken on several enterprise technology projects designed with one goal: to put information in the hands of executives who have to make go or no-go decisions on everything from where to drill to how to hedge oil prices to whether to buy another company.
The centerpiece is a new data warehouse built on Oracle's Real Application Clusters, or RAC, database for high availability. Tompkins wants to create a single repository for all sorts of data used across the company, including output metrics associated with geographic information systems (GIS) maps of gas wells, as well as accounting data and legal information.
Tompkins is quick to note that although the warehouse is now set up, her staff and the business-unit managers they serve aren't yet done populating it or building all the applications they want for it. "We have implemented a data warehouse," she jokes, "which is not to be confused with 'we have finished a data warehouse.'"
Surrounding the warehouse are three kinds of applications for sharing information: business intelligence tools, content management software and Web portals. These all carry data and analysis that company managers need to make fast decisions.
Aubrey McClendon, Chesapeake's CEO and co-founder, contends that the company's extraordinary management of information year after year comes from one thing: viewing Tompkins' tech group as a help, not a nuisance.
"I've never thought of it as a cost center," he says. "Without a first-class I.T. effort with plenty of talent and equipment, the rest can bog down."
Chesapeake's tech staff numbered just 45 in 2004, the first time the company made the Baseline 500 (at No. 2). Then, the group largely oversaw PC deployments and Microsoft Excel and Access applications. In staffing the new projects, Tompkins has nearly doubled her department, from 120 late last year to 220 now.
"We're maturing as an I.T. organization, for sure," she says. As long as her group doesn't outgrow the thrill of roller-coaster rides, McClendon won't mind. By Kim S. Nash
To learn more about Chesapeake Energy's I.T. success, read the extended interview with CEO Aubrey McClendonon on working without an I.T. budget.
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