IT's Pivotal Role in Addressing Oil and Gas Industry Challenges
By Bill Miller, CIO, EMS USA Inc.
It is no secret that dramatically lower oil prices have had a profound impact on IT departments in energy companies throughout the U.S. From sector giants to mid-market enterprises; everyone is feeling the pressure to manage the impact of declining prices on revenue and departmental budgets. The harsh reality is that many companies are often highly dependent on oil prices to fund their internal spending, and lately that dependency has wreaked havoc on IT and corporate budgets.
“IT should enable business users to act as self-service consumers, to remove IT from basic functional processes where possible”
In addition to the pressure on IT budgets, other corporate departments face similar challenges to do more with less. This pressure leads department leaders to ask IT for assistance in automating key processes to reduce costs, while IT is being asked to cut the very same resources that can deliver the required automation. This conundrum leaves CIOs facing a very daunting question.
How can IT deliver the necessary system and process improvements for other departments, while managing an overstretched IT team that is facing its own resource and funding challenges?
Listed below are some ideas from the front lines of this battle. And for those who are not part of the energy sector, here is a chance to glean some insights to apply when times inevitably get tough in your own industry.
Deploy IT automation tools
Automation offers the promise of truly “more for less.” By investing in a technical tool, IT departments can potentially reap big rewards. Examples abound in this area, such as monitoring, system testing, and database management. In the right circumstances, automation can replace time spent by critical resources on highly redundant tasks, and CIOs need to be very familiar with opportunities in this space to gain leverage and time for their resources.
However, automation is not a panacea. Automating a bad process will not help; the process needs to work well to be automated. And be prepared for the inevitable perception that IT is focusing internally, instead of on critical business needs.
As a result, CIOs will need to ensure they are communicating the priority of these investments, and why they are predecessors to other business projects that are coming. By freeing up key resources through automation, those resources can then be re-deployed on more value-add projects, creating a winning formula for IT and the business.
Leverage business self-service
Virtually every CIO is familiar with the criticism that IT is a process “bottleneck”. Those outside of IT see our critical governance and compliance protocols as a nuisance and obstacle to getting “real” work done.
In order to combat this mindset, consider putting key business users in the driver’s seat, where it makes sense. IT should enable business users to act as self-service consumers, to remove IT from basic functional processes where possible. Naturally, this needs to be balanced against maintaining appropriate internal controls and governance. However, if applied effectively, self-service can dramatically reduce IT workload while enabling it to focus on other, value-added initiatives.
Time is money, and decisiveness equals speed. If you can drive true decisiveness in your organization, you will reduce time wasted on unnecessary analysis, or possibly even eliminate entire unnecessary initiatives.
While you certainly should not force your executive team to make a decision just for the sake of it, you should focus on fostering a process that will lead to accurate, rapid, one-time decision-making. Get your facts straight before your meetings. Ensure you have all of the details. Prepare for the inevitable questions you will face, and have the answers. Bring the right people, and don’t offer to take things “off-line” which will delay getting the answers you need. Drive for the decisions, document them, and communicate them to the appropriate stakeholders. Take swift, bold action, and show leadership. Difficult crises like we face today require extraordinary leadership. Take this opportunity as a CIO to show you have what it takes to be a true executive leader, and help others to do the same. You need to be a business leader, not just the leader of IT.
Governance and transparency are always critical, but in this environment, truly every dollar counts. CIOs need to spend significant time and energy communicating with their peers on priorities, and need to include internal IT projects in the mix, as mentioned previously.
Priorities need to be set using an objective methodology. While virtually every CIO has been inundated with “business case” models, a significant effort should be made in simplifying the approach to get to decisions accurately and quickly. Partner with your finance peers to create a simpler, more effective model which drives to the value proposition of the project. When the project is complete, take the time to measure performance against the business case. Otherwise, you are short-changing the entire process.
If there is any doubt regarding your current priorities, you should be communicating more. Be certain you have the executive stakeholders at the table. If the biggest IT critics in your company are not willing to engage in the dialog, go spend time with them.
Every crisis brings opportunities. This is a time where you can challenge your staff to do more, and enable them to grow into more capable professionals. While every person is obviously different, your stars should be able to take advantage of resource gaps to grow new skills, or hone existing ones. By laying down the challenge to your team, you will give them a chance to accelerate their own professional development. When the crisis ends, your team is then better positioned to deliver solutions across a broader spectrum of requirements.
For CIOs, IT leadership comes with tremendous visibility to corporate strategy and objectives. You should be looking for opportunities for personal development beyond IT, as this will help foster your own growth, increasing your value to the enterprise.
Conclusion – Taking advantage of the crisis to move IT forward
CIOs in energy companies face significant challenges in meeting the growing demands of their businesses, particularly in this cost-cutting environment. However, by taking the steps listed above, CIOs can take advantage of this challenging downturn. You can ultimately emerge not just as the manager of the IT department, but as a senior executive and trusted business leader, who leads and influences the overall organization far beyond the narrow definition of IT. When the inevitable rebound comes, then you will be positioned to broker far stronger outcomes for yourself, your teams, and your company.