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CIOs in today’s oil and gas industry face increasing pressure to deliver innovative solutions that leverage digital technology and Internet of Things (IoT) capabilities to improve operations and enhance efficiency. Specific imperatives include gaining visibility into assets and performance, increasing productivity and capturing knowledge from an aging workforce.
While these requirements present a challenge under the best of circumstances, IT leaders in the oil and gas sector face some particularly vexing obstacles. For one thing, declining oil prices have depleted resources for investment in new initiatives, making any kind of new project a tough sell. For the traditionally conservative oil and gas industry, moreover, concepts like IoT and digital transformation are likely to be met with skepticism.
Moreover, business leaders within the sector often have a negative perception of IT, a perception based on experiences of ineffective execution and management of IT projects and, relatedly, limited ROI. Industry surveys show that close to half of all IT projects fall short of delivering anticipated results. While a number of specific factors are at play, a fundamental underlying issue is a failure to align project outcomes with business goals.
In the oil and gas sector, this IT/business alignment gap is partly a reflection of the complexity of day-to-day field operations, as well as the way in which projects are structured. CIOs can take the following four steps to address this gap – and in the process, regain credibility with the business as a strategic partner.
One: focus on business results. While that sounds obvious, the dynamics of project execution can make maintaining that focus a challenge. Many IT projects prioritize budgets and timelines, while business benefits take a back seat. As a result, projects are delivered on time and on budget can be disappointing in terms of business impact. By documenting business goals at the outset, and by building metrics for those goals into each phase of project execution, IT leaders can keep projects aligned with user priorities.
Two: manage the project from the perspective of day-to-day activity of end users. While conventional wisdom holds that IT strategy should be confined to boardroom discussions, effective strategy execution often requires a bottom-up approach that stays engaged with the requirements of the people doing the actual work. This enables a focus on the myriad details related to tools, processes and functions that are essential to any successful project.
Three: define a “bridge builder” role to maintain IT/business communication. IT projects often kick off with week-long workshops where subject matter experts communicate and define business requirements to users. The process typically yields a voluminous document that stakeholders approve but then rarely validate as the project proceeds. As a result, IT/business communication doesn’t extend into the execution phase, and the project team gradually becomes disengaged from business goals, ultimately leading to value leakage. By assigning a business subject matter expert to act as a liaison to IT throughout project execution, IT leaders can ensure that business priorities remain front and center.
Four: leverage Agile methodology. Research shows that, overall, Agile development projects are three times more likely to succeed than Waterfall projects. In terms of IT/business alignment, Agile’s iteration-based methodology, and focus on communication and collaboration between teams, enables the flexibility and responsiveness necessary for IT and business requirements to remain aligned during the course of project execution. Increased visibility is another advantage, as all steps of the project are transparent across teams throughout each phase.
In today’s challenging times for the oil and gas industry, CIOs can take advantage of these effective techniques to assume a leadership role in driving innovation and delivering significant business outcomes.