Freeze on IT spending

September 10, 1999, 10:00 CEST

New information technology investment in Statoil has been frozen until 2001.

In addition to PCs, printers and telephone systems, this decision covers the Lotus Smart Suite and Lotus Notes office support products.

The group is planning an overall upgrade in 2001 to meet its future requirements, with a new possibly four-year freeze due to be imposed in 2002.

The spending ban is expected to yield a gain of NOK 150 million in the first two years by comparison with the 1998 accounts.

Statoil expects the overall financial benefit from the freeze to reach NOK 160 million over the four years from 1999 to 2002, including the cost of a full upgrade in 2001 and reduced operating costs in the following year.

"We've steadily been cutting the cost of IT jobs through a purposeful pursuit of standardisation, centralised management and efficiency improvements," says Nina Udnes Tronstad, vice president for the information technology unit.

She believes Statoil has good computer solutions, and says that the challenge will now be to secure the benefits of the investment already made, cut costs even further and prepare the group for the future.

Accepting existing solutions until 2001 reduces Statoil's commercial flexibility to exploit new technology, Ms Udnes Tronstad admits. So until that year is the longest it can wait before efficiency begins to suffer.

Exemptions from the freeze decision include systems being introduced in connection with the BRA programme for better, faster administration or further development of subsea technology in the Statoil core (Score) project.

It would be up to the relevant technical teams to decide on a similar investment ban in these areas.

Since communication is a priority for the group, further development of its inter- and intranet solutions is also exempted from the freeze.