I understand that this is probably old news, but I just finished reading the press release from Royal Dutch Shell plc (NYSE: RDS-B) regarding their efforts to outsource a significant part of its IT infrastructure & telecommunications services to AT&T, T-Systems and EDS. I find that I need to vent a little bit as this will impact approximately 3,000 IT staff worldwide:
"The move is part of the company's initiative to achieve top quartile performance in its businesses and functions in support of its "More Upstream, Profitable Downstream" strategy.
As well as significant improvements in efficiency and productivity, the initiative will deliver important financial benefits for Shell over the first five years. Over the same period, the total value of the Agreements to the three suppliers will be in excess of $4.0 billion."
While they expect to transfer the majority of their IT staff to the service providers, there will assuredly be a reduction in headcount...there always is.
According to the press release, they've signed Master Service Agreements (MSAs) to outsource the provision of its IT infrastructure and telecommunications services in 3 service bundles, starting 1st July 2008:
- AT&T will be supporting network and telecommunications
- T-Systems will be responsible for hosting and storage
- EDS will be handling end user computing services and operational integration of the infrastructure services
I understand that outsourcing is here to stay, but while it always looks good on paper I find myself wondering how much cost savings have actually been realized when all is said and done. Also, is Shell really hurting financially these days or any big oil company for that matter? Okay, my rant is done. Now it's time for the BPO people to pummel me.
Comment Preview