FRAMINGHAM, Mass.--(BUSINESS WIRE)--Please replace the release dated March 23, 2015, with the following corrected version due to multiple revisions.
The corrected release reads:
DESPITE REDUCTIONS IN IT BUDGETS AMONG OIL AND GAS COMPANIES, IDC ENERGY INSIGHTS REPORTS CUTS LOWER THAN EXPECTED
Forward Thinking Oil and Gas Companies to Invest in Automation and Analytics, Big Data, and Cloud to Mitigate Impact of Lower Crude Prices
While oil prices have dropped under $50/barrel and 60% of oil and gas companies expect reductions in their 2015 IT budget, cuts are lower than expected and are not across the board as companies are more focused in their decisions. Based on an IDC Energy Insights flash poll of CIOs from 20 non-OPEC (Organization of the Petroleum Exporting Countries) oil and gas companies, a new report, Business Strategy: The Impact of Lower Oil Prices on Oil and Gas IT Budgets Is Not as Much as Expected, (Doc #EI254699) examines the impact of low crude prices on oil and gas companies' IT budgets. The report serves as a guide to understanding what oil and gas sectors' IT investments are most impacted, and what technology investments companies are making to mitigate lower oil prices. Essential guidance is provided on planning within the context of uncertainty.
- ClicktoTweet: Despite Reductions in IT Budgets, @IDC #EnergyInsights Reports Cuts Lower than Expected for #Oil&Gas- #BigData #Cloud to Mitigate Impact
The flash poll indicates that although there will be cuts in IT budgets in 2015, these will not be across the board. Cuts will be more selective as 75% of respondents reported a reduction in internal staffing. There is also a positive net projection for external data services, external services, and telecommunications. Oil and gas companies are strategically evaluating the costs and value of their IT departments to make good decisions about what budgets to cut, and how much.
Key findings of the report include:
- Line of business areas with the largest IT budget cuts are the knock-on effects of reduced investment in exploration activities such as finding oil and drilling oil; line of business areas with the largest potential IT budget increases are production and midstream.
- While drilling activities are slowing down, some oil and gas companies continue drilling to take advantage of lower drilling costs and also for adhering to lease agreement requirements.
- The biggest IT budget cuts will be in internal staff.
- External data services, telecommunications, and software ranked high in importance for potential budget increases.
- Oil and gas companies plan to invest strategically in automation and analytics, Big Data, and cloud to mitigate the impact of lower crude prices.
In 2016, IDC Energy Insights believes that the focus will shift to applying a more disciplined approach for evaluating and selecting IT products and services that improve business performance and help to reduce costs.
"The impact of lower oil prices on oil and gas IT budgets is not as much as expected, and cuts are not across the board as companies are more strategic and disciplined about reductions. The challenge for CIOs is to understand the company's plans going forward and present the role of IT to help successfully implement these plans," said Chris Niven, Research Director, IDC Energy Insights.
To navigate the current state of IT successfully, IDC Energy Insights recommends to CIO's:
- Focus on immediate goals and objectives and identify what resources and tools are necessary.
- Be prepared to cut, reduce, and postpone investments to accomplish these goals in the short term.
- Identify which IT areas are core to the business, which can be outsourced and which can be dropped.
"Oil and gas companies need to spend their investments wisely to help them become agile and operationally efficient. The software vendors and service providers that help them achieve these objectives will be successful," concluded Niven.
For additional information about this report or to arrange a one-on-one briefing with Chris Niven, please contact Sarah Murray at 781-378-2674 or email@example.com. Reports are available to qualified members of the media. For information on purchasing reports, contact firstname.lastname@example.org; reporters should email email@example.com.
About IDC Energy Insights
IDC Energy Insights assists energy businesses and IT leaders, as well as the suppliers who serve them, in making more effective technology decisions by providing accurate, timely, and insightful fact-based research and consulting services. Staffed by senior analysts with decades of industry experience, our global research analyzes and advises on business and technology issues facing the utility and oil and gas industries. International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology market. IDC is a subsidiary of IDG, the world’s leading technology, media, research, and events company. For more information, please visit www.idc.com/energy, email firstname.lastname@example.org, or call 508-935-4400. Visit the IDC Energy Insights Community at http://idc-community.com/energy.
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