Why the Most Effective CFOs in Energy Are Starting IT Transformation Projects Now

Written by Hexstead | Jan 20, 2026 6:21:04 AM

Introduction

In the oil and gas and broader energy sector, a clear shift is emerging. The most effective CFOs are no longer viewing IT initiatives as back-office technology upgrades. Instead, they are treating IT transformation as a lever for commercial performance, operational efficiency, and financial control.

This change is being driven by a simple reality: the cost of inaction now outweighs the cost of change.

The Hidden Financial Risk in Legacy Systems

Many energy companies continue to rely on legacy IT systems, spreadsheets, and manual processes to manage production data, revenue forecasting, and operational reporting. While these tools may appear to work, they introduce material risks that are rarely visible on the balance sheet:

  • Limited confidence in production and revenue forecasts

  • Manual reconciliation between operations, commercial teams, and finance

  • Key-person dependency for critical spreadsheet models

  • Delayed decision-making during periods of market volatility

For CFOs, these issues translate directly into financial risk, governance risk, and strategic risk.

Why CFOs Are Sponsoring IT Projects

CFO-led IT projects succeed because they focus on outcomes rather than technology. When finance leads the agenda, IT transformation is framed around:

  • Forecast accuracy and scenario modelling

  • Capital allocation and asset performance

  • Margin visibility and cost transparency

  • Auditability and regulatory compliance

This business-led approach ensures that technology investments support better decisions, not just new systems.

From IT Cost to Capital Discipline

One of the most important shifts CFOs bring to IT initiatives is capital discipline. Well-structured IT projects in oil and gas clearly distinguish between:

  • Capitalisable software configuration and development

  • Operating expenses such as SaaS subscriptions and support

  • Measurable financial and operational benefits

This allows IT transformation to be evaluated like any other capital investment, with clear accountability for outcomes.

Commercial and Operational Benefits That Matter

When aligned with business priorities, IT transformation delivers tangible value across the energy value chain:

  • Faster and more reliable production and revenue forecasting

  • Improved scenario analysis during commodity price volatility

  • Reduced reconciliation effort across finance and operations

  • Stronger governance and reduced audit risk

  • Improved confidence in executive and board reporting

These outcomes directly support CFO priorities around control, confidence, and capital efficiency.

Why Independence Matters in Energy

Vendor-led IT implementations often optimise for software products rather than business outcomes. An independent business and IT consultancy brings a different focus:

  • Translating commercial and operational requirements into system design

  • Challenging legacy processes and assumptions

  • Protecting long-term flexibility and optionality

  • Ensuring governance, controls, and reporting are designed upfront

For CFOs, independence is critical to ensuring IT investments deliver sustained value.

Starting an IT Transformation Without Disruption

Contrary to common perception, embarking on an IT transformation does not require a multi-year, high-risk program. Many successful engagements begin with:

  • A targeted diagnostic of systems, data, and processes

  • A business-led IT roadmap aligned to commercial objectives

  • Identification of quick wins and phased implementation opportunities

This approach allows energy businesses to build momentum while maintaining control over scope, cost, and risk.

The Strategic Opportunity for CFOs

CFOs sit at the intersection of finance, operations, and strategy. This makes them uniquely positioned to sponsor IT initiatives that break down silos and improve decision-making across the organisation.

In an industry defined by complexity and volatility, IT transformation is no longer an IT decision. It is a commercial and financial one.

Final Thought

The most successful energy companies are not investing in technology for its own sake. They are investing in clarity, confidence, and control.

For CFOs, starting an IT transformation is not about becoming more digital. It is about becoming more deliberate — and better equipped to lead the business through uncertainty.