Why IT Must Have a Seat at the Table to Decide on Technology Investments?
The shift in mindset towards technology is driving innovation and pushing up demand for value added IT. What has led to this shift and where does it lead to, Rick Hatcher has an enlightening perspective.
Earlier, we shed light on the accelerated path to value in Oil & Gas, the value derived from several key decisions, within a short span of time. Let’s talk about role of IT in the buying process. Operators are keen to leapfrog into technology maturity and reduce the risk of suboptimal production with informed choice. At this juncture, IT teams should do the role of executive counsel, guiding the business through the software evaluation and buying process. Technology has evolved from being an enabler to business driver, directly impacting bottom line. IT leaders thus have a seat at the table to drive decisions for investing in turnaround technologies.
THE FINANCIAL SHIFT: TECHNOLOGY AS AN ACCELERATOR
During our last Evolve Digital we focused on the role of IT as the accelerator and a key driver for business value. Sowmya Murthy, Chief Customer Officer at Seven Lakes Technologies was in conversation with Rick Hatcher, Former CIO of Whiting Petroleum, discussing evolution and innovation in production software. Rick emphasized that an efficient oilfield production operation drives long-term valuation, better balance sheet, and increased cashflows. And as such, buying a production software is much more than shopping for a run of the mill solution. It is a strategic investment in accelerating path to value.
Buying technology has largely been an executive decision that rarely loops in IT. It typically involves months of vendor evaluation and solution comparison, mostly through colorful brochures and long sales presentations. Companies make top-level decisions around base management and production capacities. Because IT is not always included in this decision, the risk is high. A solution can fall flat on its face if it fails to adapt to the specific oilfield requirement.
Legacy systems have let down the operators. With uncertain markets and pressure on resources, investing in the right software eases the burden by optimizing cost and quickly providing upfront value. This definitely is a financial incentive to Oil & Gas companies.
THE TECHNOLOGY SHIFT: TRADTIONAL IT TO VALUE-ADD IT
“We first need to understand the difference between traditional and value-added IT. Traditional IT covers basic services such as infrastructure communications helpdesk, integrations, applications support, etc. Value-add IT on the other hand relates technology to the executive’s most critical issues such as bottom-line and innovation,” says Rick Hatcher. Technology that impacts your bottom line, relentlessly adds value, and drives positive financial transformation for your organization is the kind of value-add technology you need to invest in today.
As a veteran of the oil industry, Rick has driven meaningful change through transformative business strategy. He titles JOYN as a strategic mission-critical system. His team adopted JOYN to extend their efficiency, supporting financial transformation for the organization. It provides better base management and complete control over wells as an integrated IT function.
“JOYN gives you the platform to capture field data and get it into the hands of the decision-makers. You can mature to pump by exception as lease operators streamline their routes to the stops they must make during the day, versus hitting every well or stop. It tells you which well is impacting you the most; especially from an economic standpoint, by minimizing production loss or downtime”, Rick summarized.
THE RELATIONSHIP SHIFT: VENDOR TO INNOVATION PARTNER
Legacy systems have been content with delivering certain software and collecting an annual maintenance fee. Innovation to meet new realities is least of their worries.
Rick insists technology vendors have a more important role to play. “A partner should provide with improvements in software and innovative solutions down the road, with at least a three-year roadmap”, he says. “If a partner can come in as an extension of my IT team with innovation as part of their wheelhouse, I know they have a strong vision. I will get some great innovation and new technological tools without having to spend a lot of resources or time to do it”. He valued JOYN as a partner because JOYN complemented his team and supports their vision.
THE BUYING SHIFT: LONG CYCLES TO SAAS SPEED
For long, buying mission-critical systems for upstream Oil & Gas was a maze, difficult to navigate. “RFP process takes months and a lot of resources. It is finally based on vendor promises which are high risk because you’re making a major commitment upfront.” In contrast, SaaS will have you up and running in a fraction of time with demonstrated value. “I love the SaaS buying process as it’s agile, it allows you to get an answer on vendor and the solution in weeks. With an absence of SaaS, you are really hurting your chances to take solution to the market, fast”, Rick claims. The ready workflows, KPIs and a vast library of APIs make migration a breeze. Operators save time and resources.
Traditionally, companies incurred high cost in implementing and maintaining production software. JOYN has changed that completely. “You go to the JOYN website, enter the number and BOE per day and know exactly what you pay either on a monthly or annual type of subscription. I really love this pricing model”, says Rick.
Moving at SaaS speed you not only accelerate your time to market but also eliminate risk of committing to a solution that may not deliver to your needs. Instead of making upfront commitment based on vendor promise, you have the option to Buy As You Go (BAYG). “With JOYN if you only want to run 100 wells to begin with, well that’s going to be a much lower cost than if you were trying to bring on your entire base at the same time like you would with a commitment on the RFP process” explains Rick. He does advise against fake SaaS. Legacy system hosted on cloud does not qualify to be SaaS. Making the right choice demands a shift from RFP process to BAYG. Demand the best returns on your investment and believe what you see.
Do you want to eliminate the risk of making the wrong choice and take months off your RFP process? Sign up for JOYN Oil & Gas free trial and enjoy the freedom to Buy-As-You-Go.