Shell has outsourced over 8,000 back office posts to cheaper offshore locations over the last five years.
The figure was announced by the oil giant today as it said it had slashed a total of $4 billion (£2.5 billion) from costs over the last two years, a time period in which it cut jobs and standardised processes and systems globally. The six shared services centres mainly employ IT and finance processing staff.
In 2008, Shell signed £2 billion worth of outsourcing deals with T-Systems for hosting and storage, AT&T for networking and telecoms, and EDS (now HP) for end user computing services and for infrastructure integration, with 3,200 IT staff migrating to those companies. Shell also has an application support deal running with IBM, Logica, Wipro and Accenture.
In 2009, the company said it was attempting to make individuals more accountable for successful project delivery and for the performance of different functions. It created a new arm, focused on project management and delivery, and combining all of its project capabilities including the services and technology focused on individual projects.
Today, Shell announced it had almost doubled its annual profits to $18.6 billion (£11.5 billion), as oil prices rose and the company increased production. Chief executive Peter Voser said Shell had “a strong focus on continuous improvement, reducing costs, enhancing [its] operating performance, and rebalancing the portfolio for profitable growth”.
Shell is also targeting “further multibillion dollar savings” in the “near future”, from its continuous improvement plans, which include further offshoring, establishing global contracting and procurement functions, and bringing about more simplification and standardisation.
Shell is driving a massive process standardisation programme, and is using Lean development to speed up technology rollouts. The company expects that in some cases this will cut years from development and testing.
Additionally, it is using more off-the-shelf products. Shell is mainly Microsoft Windows-based, but also runs Linux platforms to support exploration and production systems, and it runs some Unix systems. Its key applications are hosted out of Amsterdam, based on SAP and Oracle software.