Energy industry CIOs shift IT focus to cost, survey finds

Chief information officers within the energy industry will be shifting their focus to cost-cutting when considering information technology solutions for their companies.

By the Oil & Gas Journal Staff

HOUSTON, Dec. 5 -- Chief information officers within the energy industry will be shifting their focus to cost-cutting when considering information technology (IT) solutions for their companies.

Energy companies also are ramping up efforts to standardize and simplify their IT environments. And companies are looking beyond the efficiencies gained through the successful -- and costly -- implementation of enterprise resource planning, or ERP, systems.

These were some of the key findings of a joint study conducted by strategy and technology consulting firm Booz Allen Hamilton and Houston-based research consultancy Zeus Development Corp.

The survey was conducted to gain insight into how the energy industry was using information technology and to gauge changes in spending priorities and strategies. Study results were released Wednesday at a Zeus Development-sponsored interactive energy conference in Houston.

Study findings
Overall, CIOs were found to possess a nearer-term horizon for investment in IT. "Capital constraints and over-optimism in e-commerce and other 'sea-change' technologies has led management to limit investments to those with more secure tangible returns," the study said.

'Innovation fatigue' was also noted among those surveyed as being a prominent problem. "The willingness to place large bets on innovation has slowed as management have grown cautious of the promises of big-win technologies," the study said.

Managers also have begun focusing on "internally focused investments" that will have measurable, near-term return on investment. High-priority investments for the upstream sector will include data warehousing and standardization, supervisory control and data acquisition (SCADA) and advanced repair and maintenance systems, and improvements to existing ERP systems, the study found.

Among the investments considered a "moderate" priority are geologic and geoseismic imaging and spatial-visual centers for exploration, project collaboration, and mobile workforce management.

"Energy management prefers internally focused investments with tangible, near-term returns using committed resources and leveraging from tested infrastructure," the study said.

Downstream, investments considered a high-priority include data cleansing and business intelligence, improvements in ERP systems, and SCADA and advanced repair and maintenance systems. Those investments considered more moderate in priority included supply-chain management, collaborative design systems, and advanced quick-reaction, decision-support systems.

Companies interviewed by the surveying firms included BP PLC, CMS Energy Corp., Conoco Inc., Coral Energy LLC, Kerr-McGee Corp., and Marathon Oil Corp.

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