Astin Thomas, Chief Information Officer of KBC Advanced Technologies plc, discusses the IT opportunities for the Oil and Gas CIO in 2015.
The headline-grabbing decline in global oil price is at the center of attention for every function in the oil and gas industry. IT is particularly well placed to mount a response. With margins under huge pressure, CIOs can use IT tools and applications to drive operational improvements and greater efficiency.
There are three steps CIOs must take to succeed:
1. Extract greater value from data
Data analytics provide CIOs with an excellent opportunity to drive business performance alongside the recovery in the oil markets. Companies in this sector have huge amounts of operational data – historical and real-time – aggregated across many systems. However, this rich seam of data isn’t currently being used to its fullest potential.
CIOs must ensure that the data is well mined, and that the results are linked to the business’s key performance indicators (KPIs). The information must be used to generate usable intelligence for the decision-makers and operational leaders who run the assets that most affect profitability.
Central to this task is enhancing the user experience. IT must partner with other business lines and design formats that can help inform the strategic perspective of executives and external stakeholders. Internally, management information dashboards can enable operational leaders to drill data down in rich detail. They can portray, for example, how the morning shift is performing against the afternoon shift, or where one specific asset is negatively impacting the operational excellence of an entire site. External stakeholders could be technical partners or even banks – if, for example, additional finance is being sought.
2. Maintain the flow of investment
Budgets will be squeezed this year, regardless of being set prior to the oil price decline. If CIOs are to drive improvements in the business, they must first secure the investment they need. Many CIOs are going to see existing projects canceled and new ones fail to get approval. With the number of redundancies in the industry, CIOs could find themselves working with a completely new set of stakeholders, each of which would need to be persuaded and convinced of IT’s strategic investments. These factors will present CIOs with a number of serious challenges.
For example, starting in the third quarter of this year, Microsoft is due to release an entire suite of new applications across the client, server and cloud services spectrum. Nearly all oil and gas businesses run on Microsoft systems and will want, or even be required, to upgrade some core solutions. This will be particularly true for those businesses that have switched to system-specific cloud infrastructure and services.
CIOs will need to convince executive leadership and finance directors of the business case for key investments, articulating why they are a “must-have.”
3. Explore closer business partnerships
CIOs must engage with their business’s leadership team or risk becoming sidelined and later being held accountable for IT’s perceived lack of attention to strategic goals and initiatives. Following the fall in the oil price, CIOs must forge much closer partnerships with their leadership teams.
They need to be represented at the top level with the key decision-makers and stakeholders in order to set out the operational improvements that IT can deliver. They need to explain which projects and investments IT can and cannot do without.
These conversations are crucial. CIOs who do not engage in them won’t be able to fulfill IT’s potential for mitigating some of the difficulties the sector faces. That would be a significant failing in an industry that needs strong CIO leadership more than ever.