As the price of oil drops, projects have slowed down and the majority of upstream companies have shifted their attention to developing a sustainable cost and productivity strategy, which is essential to achieving their immediate and long-term objectives.
A new study from IDC Energy Insights, “Cost Reduction, Efficiency, Security, Modernisation and 3rd Platform are Top of Mind IT initiatives for Oil and Gas CIOs for 2016”, examines what CIOs at US oil and gas companies are doing to prepare for the coming year. Conclusions are drawn from interviews with leading CIOs in the US as well as the data from IDC’s Vertical IT and Communications Survey and other relevant IDC surveys and research reports.
With the current economic situation, CIOs have their hands full, determining how to be more productive while reducing costs at the same time. Companies are now taking a practical approach to modernising their IT environment and doing all they can with what they currently have.
The approach is to tune existing applications and processes to realize a solid IT foundation for each business unit. In addition, companies are updating and replacing specific applications that help automate and optimize processes and workflows where applicable. The number of mobile applications is growing rapidly along with moderate cloud growth as companies realize the value of rapid application development and deployment moving to the 3rd Platform.
According to the report, another reason for building a solid IT foundation is to develop a big data and analytics platform on top of reliable systems to efficiently and effectively organize and manage critical data from multiple sources for a deeper holistic view and management of operations performance.
Additional key findings of the new report include:
* Companies are being practical in their approach to evolving to the 3rd Platform by focusing on the basics and reserving money for innovative investments in big data and analytics, cloud, mobile applications, and automating processes wherever possible.
* CIOs are selectively investing in technologies and approaches that help optimise processes, increase productivity, promote security, and reduce costs.
* The top IT initiatives vary by segment, but common themes for most include security, mobility, business intelligence and analytics, cloud, and application modernisation.
* Companies are making the most of what they already have and tuning and updating their existing applications to automate functionality and improve workflows to help build a solid and reliable IT foundation for information and a platform for big data and analytics.
* Industry-specific and security applications are ranked as top priorities for software purchasing, further validating the need to securely establish a solid IT foundation for each business unit, and many are becoming available as cloud and mobile solutions, giving credibility to their acceptance.
* Despite cuts, investment in innovation continues as energy companies strive to be more agile, efficient, and productive while reducing costs. As a result, there is a trend toward acceptance of cloud, mobility, Internet of Things (IoT), analytics, advanced analytics, and cognitive with high expectations.
According to Chris Niven, IDC Energy Insights research director: “Oil and gas companies are faced with intense pressure to deal with low oil prices. Now is a good time to tighten the belt and focus on becoming more efficient and working smarter. The companies that will survive and prosper are the ones that know how to leverage enabling technologies like cloud and mobility to help automate and optimise processes and apply analytics to improve operations output. If a company does not have operations excellence, they need to get it.”
IDC Energy Insights asserts that energy companies need to be practical, and recommends that CIOs develop a solid IT foundation for each business unit to provide immediate, accurate information. Having a solid IT environment improves workflows and provides meaningful data for good decision making and the base foundation to develop platforms of the future.
Additionally, IDC Energy Insights recommends taking a practical approach to first align people, processes, and technology and make do with what you have but tweak the functionality of each core software application to get the most use out of it.
The new report notes it may be helpful to obtain third-party help in assessing the IT environment to determine requirements for improvement. Finally, IDC recommends that while it’s important to manage the budget, companies should set some aside especially to build a platform for analytics and create an enterprise architecture, a road map, and a plan to ensure you have a good understanding of what you have, where you want to go, and how to get there before you start.