How the IT Model Impacts Realities of Changing Economic Conditions | Sherpas in Blue Shirts

How CIOs can scale IT costs to fit challenges of oil and gas and other commodity businesses.

Businesses dealing with cyclical commodities face ongoing challenges from fluctuating market pricing forces. It’s easy to understand in the context of a business in the oil and gas industry today. The price of their product recently dropped from $110 a barrel to $30 a barrel. So they have an extreme need to scale down their IT and business environment to fit that new reality.

But incremental steps won’t achieve enough savings. For instance, a labor arbitrage tactic of shipping more work to India is interesting but unhelpful. It would achieve a 20 percent savings; but they need 60 or 70 percent savings to match the new reality.

Here’s the other part of the reality oil and gas and businesses in other cyclical industries face.

Read more at CIO online.

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