January 22 by Vikram Chakrabarty
The oil industry is a massive, multi-faceted environment that spans a number of different processes and occupations. Exploring the potential of information technology in this sector requires a deep understanding of the industry as well as a strong scope of developing technology trends.
It’s inevitable that many major industries, including oil & gas, will migrate to the cloud. The important question is which companies will seek to take advantage and which will play catch up.
Driving Forces Towards Change
Despite the current low prices now, global demand for oil is going to witness a major upswing. As of today we consume nearly 89 million barrels per day (mbpd) worldwide, which is expected to touch 105 mbpd by 2025. The main growth will come from Asian countries. Urbanization and growth of the consumer class in developing countries will, in turn, promote demand for real estate, infrastructure, cars, hi-tech goods and, as a result, energy resources.
The greatest surge in oil demand will come from the transportation
sector, for which oil is the principal energy source (over 90%).
Analysts expect to see significant growth in the number of cars as well as the development of sea, air and railway transportation. Freight cars and trucks will make a strong contribution to the growth in consumption of motor fuels. The total number of such cars is expected to grow by 140 million by 2025. According to reliable estimates, the aggregate global car fleet will grow by 670 million during the period 2015-2025. This will lead to an increase in fuel consumption of 9 mbpd. In addition to this, growth in demand for oil in developing countries will be further encouraged by the industrial sector, in particular, the
Encouraged by these statistics, it is not surprising to note that some of the largest players in the information technology industry have forayed in a big way in designing comprehensive solutions specifically targeted for the oil and gas industry. IBM is taking a swing with their Maximo for Oil and Gas and Microsoft Dynamics AX provides an ERP solution for oil and gas. But in order to keep pace with accelerating demand, companies need to pull their data out of the back end and moving to the cloud.
Making the Leap to the Cloud
No matter your placement in the supply chain – upstream, midstream, or downstream – effective multi-channel distribution and commerce require superior flexibility, scalability and visibility across all processes. The cloud provides this in spades. In fact, it is simply unmatchable in terms of managing ever-larger, more complex, and more geographically diverse ecosystems, suppliers, subcontractors and employees.
Nonetheless, the potential still remains vastly untapped and unexplored. It would require bold decisions, key strategic business alignment and management commitment to venture into and “verticalize” this industry, but the rewards are sure to be a lot more than just satisfactory.