The Old and the New

Yes...the oil companies operate on a decentralized basis...the legacy of the oil company is that it has, predominantly and rightly so, the mindset of the petroleum engineer. This combination of attributes has meant that many of the decisions and processes of oil companies have historically been architected and overseen and the business unit level. Near the drillbit or within the refinery. However, in the mid- to late-1990's the seeds of change were planted. The oil companies bought SAP and, as a result, significant investments were made in SAP. The investments were so substantial that the CIO took on a new level of import within the enterprise.

General information technology was previously viewed as something that was outsourced. It was not petroleum engineering. As the wheels of SAP began to turn, the reliance on the CIO began to increase. As such, there began a centralization of decision making regarding things that were "IT." Software solutions that may have been never been seen by corporate are now becoming the domain of corporate. CIO's are asking..."what are our business processes and what can SAP do and not do?" This is where some of the investment opportunity resides.

I think we are going to see continued empowerment of the CIO. I think we are going to see near-term definition of gaps in the general IT stack as it relates to general business process and a search for solutions to fill those gaps. The question then becomes will IT budgeting still reflect the apprehension of a volatile industry or can it plow new ground?