In the early 1990s, BP began looking at IT outsourcing as a way to reduce costs, gain flexible and ‘release value’ in its UK Exploration unit. Science Applications International Corporation (SAIC) was selected and a new ‘open book’ ‘risk/reward’ outsourcing model was tailored to BP’s needs. Subsequent generations of this model have been successfully applied, notably to BP’s Houston unit in March 2000 (Oil ITJ Vol. 5 N° 4). BP claims its IT costs were reduced by 40% globally over the first three years of the outsourcing engagement and have continued at a 10% annual rate. Now BP’s Houston unit has awarded SAIC a further $360 million contract to provide more IT infrastructure and managed services.
The new contract is for a four-year period to provide IT services to BP’s lower 48 upstream business units in Houston. SAIC will act as a single point provider or aggregator of IT services including data management, web development, applications support, and consultancy services.
Mark Pierson, SAIC senior VP and manager of SAIC’s Energy Technology and Services Group said, “SAIC has established a long relationship with BP around the world, and this new contract allows us to implement a new service delivery model and IT architecture enabling BP Houston to take the next major step in achieving cost reduction.”
Steve Peacock, VP of BP’s Upstream Digital Business organization added, “The new service delivery model does several things for BP - it rationalizes a complex suite of existing contracts and services, and brings a sharper strategic focus to what we source in-house versus acquire from the service industry. It also positions us to take advantage of future technologies that will leverage Web-based, externally sourced services.”