Paul Dyson, energy expert at PA Consulting Group, has been quoted in an article in Information Age. Paul comments on the brace of IT outsourcing deals in the energy sector and how the industry can prepare for an uncertain future.
According to Paul, making sure service levels can be flexed up and down is another effective way to reduce the risk of over-investment.
Paul says: “I have seen deals that have the scope for four or five different levels of service, where the customer can drop down tiers of service if they need to save money. There are limits, but that allows you to control how much service you are actually buying and you’re not stuck with a single service level for the life of the contract.”
Paul goes on to comment that cloud-based hosting engagements, like HP’s deals with Centrica, have the potential to achieve the efficiencies that previous data centre outsourcing were supposed to deliver, but often did not. Paul says: “Four or five years ago, everyone was talking about outsourcing data centre operations. But when you look back now and ask whether those kinds of deals achieved what they set out to, the answer is probably not. In a lot of cases, the customers ended up hiring extra staff to do a lot of internal data centre management.” However, the IT services industry’s ability to live up to that potential, and the buy-side’s ability to evolve their systems to a point where cloud-based hosting is appropriate, are still both unproven, he adds.
Paul concludes that: “For the energy companies, it’s not just a case of lift and shift – there’s a huge amount of change that needs to be done around standardisation, and understanding exactly what it is they want their providers to deliver. Meanwhile, the vendors have some great marketing material but they’ve got very little track record delivering [cloud-based services]. So there’s a huge amount of potential, and with the right focus it could work, but it’s not without risk.”
You can read the article in full online here.
For more information on how PA can help your energy organisation prepare for an uncertain future, click here.