Shell has signed Master Service Agreements (MSAs) with AT&T (network and telecommunications), Deutsche Telekom’s T-Systems unit (hosting and storage) and EDS (end user computing and integration). The total value of the deal to the three suppliers will be in excess of $4.0 billion. The outsourcing of Shell’s IT and communications (ITC) services will kick-off in July 2008. The agreement will see some 3,000 Shell employees and contractors around the world transfer to the suppliers. Shell will retain ‘strategic management’ ITC staff.
Shell CIO Alan Matula said, ‘This deal is a major strategic choice for Shell and will enhance our ability to respond to the growing demands of our businesses. It allows Shell to focus on Information Technology that drives our competitive position in the oil & gas market, while suppliers focus on improving essential IT capability.’
Business transformation TPI of The Woodlands, Texas, advised Shell on the deal. TPI partner Elesh Khakhar commented, ‘By providing integrated services to more than 1,500 sites in over 100 countries, Shell’s approach combines all the advantages of decentralized service provision with the benefits and efficiency of a centralized governance structure. Shell will be able to exploit emerging commoditized services designed for the consumer market, such as email or internet phone services and integrate them within their services when they become robust enough for commercial use.’
EDS EMEA VP Bill Thomas added, ‘Our global presence and experience as integrator on large-scale IT outsourcing projects will help reduce management complexity in Shell’s IT environment.’
We led last month with a Microsoft announcement that also touched on Shell’s communications strategy. It’s not clear quite how all the new deals interrelate—but it sure would be nice to have a peek at the service level agreements that navigate from Shell, through TPI, EDS, T-Systems, AT&T, Microsoft and Nortel. That’s one heck of a phone call!
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