Economic and Organizational

Effects of Business ICT Systems`

Evolution in Oil and Energy Sector

Mr. Sc. E. Tijan

Faculty of Maritime Studies
University of Rijeka
Studentska 2, Rijeka 51000, Croatia
Phone: +385 51 338 411 Fax: +385 51 336 755 E-mail: etijan@pfri.hr

Mag. oec. S. Aksentijević, univ.spec.oec, ICT Court Expert

Saipem Mediteran Usluge d.o.o.
Alda Colonnella 2, Rijeka 51000, Croatia
Phone: +385 51 651 844 Fax: +385 51 651 783 E-mail: sasa.aksentijevic@saipem.eni.it

Dr. Sc. B. Hlača

Rijeka Port Authority
Riva 1, Rijeka 51000, Croatia
Phone: +385 51 351 111 Fax: +385 51 331 764 E-mail: bojanhlaca.ri@portauthority.hr
 I. Ongoing trends in data management

1. Data compression
2. Database consolidation
3. Data archiving
 II. System complexity and increase of capacities

1. Consolidation
2. Virtualization
3. Replacement
 III. New ICT trends in oil and energy companies

1. Users expect “total connectivity”

2. Paradigm change site working -> mobile working
3. Across-team collaboration and Intranet social networking
4. Open source technology “behind the scenes”
5. Target for software deployment becomes The Cloud
6. En vogue technologies: virtualization, SaaS, Storage as a Service,
Infrastructure as a Service, Platform as a Service, Database as a Service, Application as a
service, Grid computing ->>> EaaS!!!
 IV. High cost of compliance

Containment tactics:

Strict data governance policies

Strict policies of data retrieval and disposal
Record management (not only in regard to electronic data)
Centralization of security policy management across enterprise
V. Total Virtualization
 ICT CA PITA L EXPENSE DESCRIPTION OF COST TYPE t ransit ion phase maintenance phase

VI. How much does it I nves tments to hardware

I nves tments to telec ommunic ation hardware and s oftware
high C A P E X
high C A P E X
low C A P E X
low C A P E X

cost? 1. 1. IN V EST M ENT S

I nves tments to s tandard des ktop environment s oftware
I nves tments to additional applic ation s oftware pac kages
no major c hange
no major c hange
no major c hange
no major c hange
I nves tments to s trategic I C T s tudies and applic ation development projec ts high C A P E X low C A P E X
I nves tments to development projec ts of I C T infras truc ture high C A P E X low C A P E X
I nves tments to telec ommunic ation development projec ts high C A P E X low C A P E X
SUM OF ICT CA PEX COSTS high CA PEX low CA PEX

ICT OPERA TIVE EXPENSE COST TYPE

C os t of I C T Strategic Studies high O P E X low O P E X

C os t of external applic ation development high O P E X low O P E X
C os t of applic ation management s ervic es no major c hange no major c hange
2 .1 . A P P LI C A T I O N S
C os t of applic ation SW maintenanc e fee no major c hange no major c hange
C os t of rental of applic ation s oftware no major c hange no major c hange
L eas ing of applic ation s oftware no major c hange no major c hange
T O T A L A P P L I C A T I O N C O ST S high OPEX no major change

C os t of development of I C T infras truc ture high O P E X low O P E X

C os t of c us tomer s ervic e des k high O P E X low O P E X
C os t of infras truc ture s ervic es (s ervers , works tations and printers ) high O P E X high O P E X
C os t of applic ation s erver s ervic es no major c hange no major c hange
C os t of E nterpris e Res ourc e P lanning S erver s ervic es (E RP ) no major c hange no major c hange
2 .2 . I T I N FRA ST RU C T U RE C os t of outs ourc ed I T profes s ionals s ervic es high O P E X high O P E X
C os t of hardware maintenanc e fee no major c hange high O P E X
C os t of bas ic s oftware maintenanc e fee no major c hange no major c hange
C os t of purc has e/rental of bas ic s oftware no major c hange no major c hange
2. C os t of rental and leas e of hardware high O P E X low O P E X
N on- c apital expenditure purc has e of hardware not applic able not applic able
T O T A L I C T I N FRA ST RU C T U RE C O S T S high OPEX no major change

T elec ommunic ation infras truc ture development c os t high O P E X low O P E X

C os t of L oc al A rea N etwork (L A N ) maintenanc e s ervic es no major c hange no major c hange
C os t of fixed voic e s ervic es (fixed fees and traffic ) no major c hange low O P E X
C os t of mobile voic e s ervic es (fixed fees and traffic ) no major c hange low O P E X
C os t of data trans mis s ion s ervic es high O P E X low O P E X
2 .3 . T E L E C O M M U N I C A T I O N C os t of I nternet s ervic es high O P E X low O P E X
C os t of other telec ommunic ation s ervic es not applic able not applic able
C os t of telec ommunic ation hardware maintenanc e fee no major c hange no major c hange
C os t of telec ommunic ation s oftware maintenanc e fee no major c hange no major c hange
C os t of rental of telec ommunic ation equipment no major c hange no major c hange
N on- c apital expenditure purc has e of telec ommunic ation equipment not applic able not applic able
T O T A L T E L E C O M M U N I C A T I O N C O ST S no major change low OPEX
SU B T O T A L O F T E C H N I C A L A RE A S

2 .4 . O T H E R I C T c ons umables no major c hange no major c hange

TOTA L ICT OPEX COSTS high OPEX low OPEX
L A BO U R C O ST Standard labour c os ts of permanent I C T s taff no major c hange higher level
VII Conclusion

The biggest mid-term gains and savings in oil and energy companies, derived from the new technologies based on virtualization,
streaming and deployment of “everything as a service” concept can be expected in the telecommunication part of ICT costs,
due to development of technology and falling prices of telecommunication services (data links, voice, roaming). There is no
specific and easy conclusion what will be the impact of new evaluated technologies on the overall ICT budget of oil and energy
majors. There are contributing factors strongly influencing overall structure and total value of ICT costs and investments:

• Size of the consolidated company and number of users

• Achieved level of technology adoption, consolidation and services
• Work in remote and difficult areas
• Work offshore
• Ratio of internal ICT development, maintenance and support versus outsourced services
• Internal rules and regulations for use of ICT assets and resources

Therefore, it is not easy to predict the impact adoption of new technologies will have on the overall ICT budgets. However, they
will surely impact the quality of services, enabling more flexible service utilization, prevent fixed licensing, ensure better
alignment between real need for ICT services and resources by usage of the cloud computing and virtual infrastructure.
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