The gulf separating offshore companies' operating management and information technology (IT) departments has created a monster called unrealized business value. IT assets, though implemented and working, are producing far less than business case value for the company.
The typical problem is too few people working on either the IT or user side to vest these IT assets. It is a shame, when one considers the millions of dollars spent on acquiring these assets and the huge role IT plays in the industry.
While a company might dismiss the idea that their business is technology driven, it is difficult to imagine today's offshore E&P industry without the blizzard of exploration software and worldwide, online collaboration.
Operating management and even some IT departments must remember that IT investments are just as bottom-line real as investments in offshore platforms or other hardware. For example, operating management understands that offshore platforms are designed to specification, controlled by the oper-ator, and carefully managed to generate a profit.
IT investments are not seen in the same light by operating management. Frankly, they just don't push to get the same return on investment (ROI) from IT dollars that they demand from other investments. Instead, IT assets are considered important to have, but the province of people who speak an alien language. Because they don't understand IT, it is hard for them to properly manage.
As sad as it may seem, that's only half the story. IT departments are so accustomed to working in a mystical environment where only they know how the magic works that they can baffle virtually anybody with jargon. Often they do this without even trying. The specialized vocabulary has no place in the business arena and only widens the gulf between IT and management.
Nothing will change until management recognizes the problem and realizes this missing ROI affects the entire company. Key to this recognition is the idea that while IT is the technical implementer, management is responsible for integrating these important capital assets into daily operations.
It comes down to leadership. Business leaders must step up to the challenge and use IT as a capital asset in their business. Only top management, with a clear understanding of IT's potential can ensure that there is an ROI for dollars invested in this business tool.
In fairness to the IT side, they are not blind to this problem. They see the waste every day. They provide competent technical management to get new systems into play, only to watch the user community take less than full responsibility for getting IT assets into daily use. IT knows who their customers are, but it's the users who just don't "get" their responsibility.
IT's responsibility is to consult with user management about hardware and software requirements, then discuss how this should perform and how it will make money for the company. Putting feet to the fire, they also need to have management hold them accountable for the technology decisions made, just as that same management holds itself accountable for fully using the IT assets.
What a concept. Company management steps in to become ringmaster rather than spectator. That move alone could stop many companies from buying an unbroken string of high-dollar toys. Turning the entire money-wasting process on its ear, management walks the extra mile and makes IT their partner in getting ROI on technology investments.
If objections remain that business executives can't lead because they don't understand IT, consider what is involved in building an offshore platform. Most business people know little or nothing about structural mechanics, but they can take blueprints, performance specifications, and a budget to a builder and soon have a new platform floating out to sea. Business management must command its IT resource in the same way, directing it to solve specific problems and demanding cost-effective solutions.
Dutch Holland, PhD
Founder and CEO
Holland & Davis LLC
This page reflects viewpoints on the political, economic, cultural, technological, and environmental issues that shape the future of the petroleum industry. Offshore Magazine invites you to share your thoughts. Email your Beyond the Horizon manuscript to William Furlow at [email protected].
