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Adventures in Shell ‘Matulaland’

Posting on Shell Blog by IT4me on Jun 11th, 2010 at 11:27 am

IT COST SAVING IDEA #317: STOP FIDDLING WITH THE SUPPLY SIDE.

If you’re a CIO and you’re bored, one of the things you might do is to fiddle with the supply side. Changing all your suppliers overnight makes a nice splash in the media and marks you out as a thrusting and dynamic leader.

Thus we learned a few years back that Shell IT now had just 4 ‘Key Application Suppliers’ globally: IBM and WIPRO for the ‘oily rag’ stuff (sourcing mainly from India) plus LOGICA and ACCENTURE to talk persuasively and rack up impressive dry-cleaning bills. They how I understood it, anyway.

This setup fits the CIO’s vision of how the world should be, but it’s not how the world is. Most adventures in ‘Matulaland’ run years late and some never work at all. In the meantime, ‘legacy’ IT experts are needed to keep systems running and fix the damage done by unqualified (and constantly churning) offshored workers. Legacy IT experts are mostly locked into earlier supply arrangements – reinvoicing agencies that operate on margins of just 3%, so couldn’t be any cheaper.

How are these 2 worlds reconciled ? Easy ! The legacy agencies are forced to work through LOGICA or ACCENTURE to maintain the illusion of 4 suppliers. The policy makes these workers an eye-watering 30% MORE EXPENSIVE for no discernable gain, least of all in the dry-cleaning department. ‘It’s only transitional’, you might argue, but some of these arrangements are now in their 3 year.

COST-SAVING is clearly a tricky business. With charades of this sort tolerated at boardroom level, what chance does Peter Voser have further down the tree ?

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