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Energy companies increased ICT spend in 2013

ICT spending in the energy sector rose in 2013, according to a recent Kable survey of 128 energy companies. The global survey found that a large proportion of energy companies (45%) have raised their ICT budgets in 2013, an increase of 8% compared to 2012. Further boosting the optimism in technology spending in the sector, the survey highlights a 6% decline in the proportion of respondents who reduced their ICT budgets in 2013 compared to 2012. In order to increase operational efficiencies, energy companies have also invested 50% of their external ICT budgets in hardware and software in 2013.

Analysis of the core technology investment priorities of energy companies reveals that spending on enterprise applications is central to their ICT strategies. The survey finds that 95% of energy companies are planning to invest in enterprise applications through to the end of 2014. The survey also highlights that the penetration level of enterprise mobility amongst energy companies is high (92%) and that 82% of respondents are planning to invest in this domain through to the end of 2014. The adoption of cloud computing is relatively low in the sector, although demand for such solutions is set to increase, as 76% of energy companies are planning investments here in the next two years.

“Energy companies largely prefer deploying technologies on-site rather than as a hosted service,” Tim Gower, a Kable research director, says. “As energy companies face several legal and regulatory compliance issues, the sector is witnessing a slow adoption of hosted services.”

The survey reveals that important decisions regarding ICT investments are mainly influenced by CIOs. With IT emerging as an essential tool for improving productivity, CEOs and CFOs have also been taking a more active role in ICT decision-making. Kable believes that favourable relationships at board level are necessary to develop suitable IT strategies for energy companies. This is important given the increasing reliance of these companies on technology.

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