Sign Up for FREE Daily Energy News
 
BREAKING NEWS:
Hazloc Heaters
WEC - Western Engineered Containment
Copper Tip Energy Services
Copper Tip Energy
Hazloc Heaters
WEC - Western Engineered Containment

The future of IT: An oil and gas perspective


The future of IT - An oil and gas perspective

Author:  KPMG

Across industries, CEOs are realizing the importance of agility in sustaining and growing their business. More than half acknowledge agility as the new currency of business and that growth relies on the ability to challenge and disrupt business norms. Despite this realization, just under half of global CIOs feel their organizations are better than competitors at responding to changes in the business environment. We see a similar perspective from CIOs regarding time to market for new products and services, indicating a lag in building agility into the fabric of the enterprise and IT.

As global geopolitical activities drive uncertainty and volatility in commodity prices, oil and gas CIOs continue to be seen as critical to enabling the business to deliver at potentially depressed prices with ongoing reductions to IT cost. In their role as a strategic enabler to the business, CIOs are delivering those cost savings through operational efficiencies and automation. With increasing pressure to reduce carbon emissions and drive renewables, the critical role of technology in Oil and Gas is only getting bigger. The CIOs in the oil and gas sector who will emerge as digital leaders are those who can rapidly deploy new technology and capability into the enterprise, at a low operational cost.

Board priorities & investment

Oil and gas companies remain more focused on cost cutting and operational efficiency than other industries and the data indicates a strong desire to improve business processes via, or in conjunction with, technology. We see increased interest in automation opportunities within the oil and gas sector, but similar to other industries, the degree to which automation has been implemented is still limited. And while agility and innovation lag slightly behind other industries they are still recognized as important areas for growth and keys to success. In oil and gas, however, the extent to which management is looking for IT to develop innovative new products and services is less than other industries.

Strategy & operating model

Oil & Gas CEOs are leading technology strategy for their organizations indicating a strong proliferation of technology across all aspects of the enterprise. Despite the increased focus on technology as strategic to the business, more than 1/3 of oil and gas CIOs see limited organizational effectiveness in using digital technologies to advance business strategy. We see this as a key opportunity area for industry CIOs to pivot how IT leads, supports and integrates with the business.

Delivering value at speed

While oil and gas companies continue to lead other industries in deploying new technologies across functions and geographies, all industries are seeing limited to moderate success in bringing a long-term product mind set to technology implementations and increasing the overall speed of project delivery. Across industries, more than half of companies surveyed have up to ¼ of their IT spend controlled or managed outside the IT function and ¾ of companies do not encourage IT spend controlled or managed outside the IT function. There is much less tolerance for this within oil and gas.

People & culture

71% of CIOs say a skills shortage prevents the organization from keeping up with the pace of change. This is on par with other industries but oil and gas sees a significantly larger shortage in business analysis skills. Additionally, while nearly all CIOs think AI could replace some of their workforce in 5 years, notably more Oil and Gas CIOs think the proportion of workforce being replaced is higher. Similar to other industries, confidence is high that new jobs will more than compensate for jobs lost to AI. The challenge for oil and gas is that the operating model likely isn’t ready for the impact of increased AI.

Analytics & insights

40% of oil and gas CIOs think delivering business intelligence/analytics is a key business issue the board is looking for IT to address but less than 1/3 of CIOs feel their organizations are very or extremely effective at maintaining an enterprise wide data management strategy or maximizing value from their data. KPMG sees leaders in this space employing a Chief Data Officer with a “Data as an Asset” approach in their broader enterprise strategy.

KPMG recognizes that CIOs and IT leaders in the Oil & Gas industry face increasingly complex demands and challenges. Today, IT must advance the business, not just support it, with boards increasingly expecting returns on digital investments and the implementation of successful digital transformation strategies that will drive up agility, responsiveness and enhance the customer experience.

For more information, download The future of IT: Oil & Gas industry insights or contact us.

Subscribe to KPMG Energy Insights



Share This:



More News Articles


New SHOWCASE Directory Companies

 

Challenger Geomatics
CDN Controls
Caliper Inspection
Insight Analytical
Canline Pipeline Solutions
Gemini Fabrication
Environmental Mats
DyCat Solutions