The upstream oil and gas sector has received a dressing down from UK-headquartered market researcher Ovum. In its annual ICT enterprise insights survey, Ovum found that a majority of companies in the upstream are lagging in their use of IT. While they invest more in IT than other verticals, most E&P companies are ‘stuck with legacy practices’ and fail to exploit cloud computing and analytics.
The number of oils planning to increase IT spend by over 6% this year has doubled since 2012 and 40% of respondents plan to replace or overhaul IM systems in the next 18 months. Target areas for expenditure include enterprise performance management, data management and integration and data warehousing systems. However, ‘a majority plan only minor enhancements or simply to maintain their existing tools.’ This, according to Ovum’s Warren Wilson, ‘is not a recipe for long-term success.’
Digitization and analytics are changing E&P. Companies need to re-examine their partnership strategies, prepare for strategic IT and put analytics centre stage. Vendors can support this by understanding that they are playing to a mixed audience and tailor their products and value propositions accordingly.’ Warns Warren, ‘Preparing for strategic IT means eliminating paper records, modernizing IT platforms, and consolidating disparate application and data silos.’ More from Ovum.
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