Infosys (NYSE: INFY) a global Professional Services company recently acquired Noah Consulting, LLC, for their data and information management expertise in the oil and gas industry. This acquisition is intended to provide Infosys with deep oil and gas domain expertise to help solve the problems oil and gas companies face with managing the significant growth, diversity and complexity of various data types in the oil field that is required to generate meaningful analytics and better decision-making.
As oil and gas companies grew rapidly when oil prices were high, companies slapped software in place to perform functions like drilling and production but with little regard to information sharing, and as a result, silos of data have emerged. To further complicate matters, more data is being generated in the field as new devices are deployed, numerous new sensors are added, and real-time systems, G&G and GIS data are all coming together to overwhelm the IT department with data.
With the recent drop in oil prices, energy companies now strive to improve efficiencies and productivity and realize the value of having immediate, accurate information at their fingertips for deeper insight and predictability into operations performance. To accomplish this goal, oil and gas companies realize that this can only be accomplished by aligning processes and integrating applications and systems into a platform designed for managing data and analytics.
To develop such a platform, the biggest challenge for companies is finding the technical people that also have the necessary oil and gas domain expertise. Over the last few years, Noah Consulting built a niche business focused on developing data management platforms for oil and gas companies. As the volumes and variety of data in the oil field continue to grow rapidly so will the demand for resources with the technical and domain expertise to manage the data and develop high-impact analytics solutions. Because of the complexity of the knowledge and skills required, most companies prefer to leverage professional services companies, with this expertise, to develop their data management platforms. The exception are some major oil companies with the deep pockets to grow their own, but even they usually look for outside talent in areas they are weak or simply don't have the talent.
Most service firms have data management and analytics practices, but they usually focus on industries that they know best. While Infosys will have competition in this space, this acquisition should improve their position favorably by having both technical and oil and gas domain expertise. The challenge for the acquisition is if Infosys can successfully integrate and leverage Noah Consulting into their IT services operations and create value for their clients, including new areas of opportunity, or if the acquisition falls victim to culture, administration and bureaucracy. The stakes are high, but so are the potential rewards if they are successful. Wipro acquired SAIC oil and gas practice a few years ago which appears to have had a successful impact on their business, and Infosys appears to be executing a similar strategy as the vision of Big Data and analytics unfolds for oil and gas companies and their need to leverage technology to reduce costs and improve efficiencies and productivity.