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Several years ago I saw a cartoon that I thought was very funny. What is not funny is that I see this picture being played out in the petroleum industry today.
A lone general stood at the crest of a hill brandishing his sword at the throng of enemy soldiers approaching with arrows and spears flying towards him from all directions. As he was assessing his seemingly impossible situation, he felt a tug at his uniform sleeve. It was a young soldier standing behind him with a Gatling gun in tow. Without looking at him, the general said, "Not now, son. Can't you see we are in the middle of a battle?"
All around the globe, petroleum company executives experience a similar onslaught of business challenges every day. Faced with constantly changing economic and political conditions, and strapped with limited budgets and resources, they must decide which opportunities to pursue, where and when to invest capital, how to contain rising costs, increase cash-flow, revenue, production and reserves, how to get products to market quickly and keep shareholders satisfied in the process. Integral to all decision making is timely access to complete and accurate information.
Business managers constantly make decisions much like the general with his sword. They access information with tools and methods they know and are comfortable with, which often means decisions are made without the full benefit of timely, complete and accurate information. This is ironic, since they have at their disposal the full power of information technology (IT), their Gatling gun, which can dramatically impact the outcome of their battle.
The problem? Too many petroleum industry business leaders do not yet fully recognize and appreciate the powerful role IT can play in meeting their business objectives. They still view IT as a technology issue rather than a business issue. Because they are under constant pressure to perform, they do not have the time or the inclination to assess and appreciate the true value of IT. Therein lies the big disconnect between business and IT.
Information is the lifeblood of an organization. On one hand, petroleum industry managers are frustrated. They do not get the kind of information they need in a timely manner to make decisions. At best, this creates frustration and impedes productivity.
On the other hand, the IT professionals are also frustrated. They know that tools are available for the efficient and effective delivery of mission-critical information when needed. What they need is the understanding of the business process and buy-in at top levels of company management that what they do is every bit as critical to success as exploration, drilling, production or any other business activity going on in the company.
Business leaders need to make the time to recognize that IT is another powerful tool at their disposal, integral to their operations and critical to meeting their business objectives.
To do so means that business leaders will begin to see IT as an integral part of their business. They will step up to the plate and take responsibility for it. Information technology issues will be addressed at the business level, not relegated to the IT department to be solved. IT decisions will rank among production, reserves and cash flow as critical factors for company success.
When this happens, energy company teams and decision makers can stop spending 60% to 70% of the time locating, organizing and accessing crucial data, and devote that time, instead, to productive activities that contribute directly to bottom-line success. Proper incorporation of information technology in business will help generate the step improvement in performance and value that our industry is seeking. Why continue to fight the battle with a sword when you have the Gatling gun in your arsenal?
Barry Irani, president and chief executive officer of The Information Store in Houston, has more than 28 years of experience in the oil and gas industry.