In this world of volatile oil prices, energy companies are focusing more than ever on managing their profitability.
While the price of a barrel of oil is largely outside of their control, the cost to produce it is. With a maniacal focus on taking cost out of their enterprise and field operations, energy companies have begun the slow embrace of digital technologies to accelerate their cost efficiency goals.
Energy companies are keen to adopt new technologies. At the IQPC Operational Excellence & Risk Management Conference in Houston last month, one of the main focus areas for our customers was how to leverage the advancements in IoT to deliver increased asset reliability, and for good reason. When asset reliability factors go up, it has a direct impact to the bottom line via increased plant uptime and decreasing service and maintenance costs. Asset reliability is just the tip of the iceberg. Innovations in Data Science, Robotic Process Automation and Streaming Analytics will continue to transform the industry.
One of our customers, a major oil company, while committed to the introduction of digital technologies to accelerate operational efficiencies, was struggling with how it would align its IT application portfolio to support them. Between mounting IT operational costs, rogue implementations from project teams, duplicate systems performing the same capability and a growing list of applications no longer supported by the vendors, the critical question was how would the IT organization shift focus from legacy to innovation spend?
To overcome these challenges, it needed an IT portfolio management partner to inventory its existing applications, application dependencies and duplicative investments in similar capabilities. Once the initial inventory exercise was complete, they were able to align their IT portfolio to business priorities while identifying significant costs that could be eliminated and or redirected toward innovation projects.
In the end, the customer decided to redirect a material portion of the cost savings towards innovation projects, and taking the balance of the savings to the bank.
Success lies in being able to automate the IT portfolio management practice. Automation of this capability allows energy companies to support rapid change by allowing transparent insight into architecture, inter-dependencies of systems and minimization of duplicative investments in similar capabilities.
Just as important, transparent insight of the IT operating environment leads to large efficiencies in hours required to support KPI reporting and impact analysis for new technologies. Hours that could be better spent supporting the innovation the business requires to succeed in a volatile market and drive ever increasing levels of profitability.
That’s a good plan for profitability, don’t you think?