Oil and Gas - Technology Procurement Transformation (PowerPoint PPTX Slide Deck)

BENEFITS OF DOCUMENT

1. Oil and Gas
2. Technology procurement program
3. Large scale technology sourcing

DESCRIPTION

This product (Oil and Gas - Technology Procurement Transformation) is a 15-slide PPT PowerPoint presentation slide deck (PPTX), which you can download immediately upon purchase.

This document presents a comprehensive multi-year Technology Transformation program tailored for a prominent multinational Oil and Gas company. The overarching objective of this program is to optimize the utilization of information and information technology, thereby fostering superior performance and growth.

Under the purview of this extensive technology transformation program, the client's procurement team received a directive to enhance vendor performance. In response, the Vendor Sourcing Program (VSP) was established with the mandate to identify global opportunities and opportunities across Business Units, expedite the development of sourcing strategies, engage incumbent vendors in negotiations, and institute sustainability plans.

The VSP initiative boasts a broad scope, encompassing various domains, such as Hardware, Software, Network/Carrier, Consulting, Staff Augmentation (temporary contractors), and Technology Technical Services.

In tandem with the primary objective, the program encompasses several secondary objectives, namely:

Fostering Stronger Vendor Relationships: Cultivating more robust relationships with vendors to garner greater support in executing the client's technology strategy within the Oil and Gas industry.

Rationalizing the Supply Base: Streamlining the supply base by reducing the number of vendors and contracts, thereby facilitating more efficient procurement practices.

Attaining Market Competitive Rates: Ensuring that the procurement of products and services is carried out at competitive market rates.

Establishing a Global Vendor Network: Setting up an established set of vendors capable of catering to global, regional, and local requirements.

Enhancing Service Delivery and Invoicing Processes: Enhancing service delivery capabilities and refining invoicing procedures to ensure accuracy and efficiency.

Strengthening Organizational Sourcing and Procurement Governance:

This document provides an illuminating insight into the strategic planning and execution of a technology transformation program geared towards optimizing the client's operational performance and achieving sustainable growth within the dynamic Oil and Gas sector. Through a combination of meticulous planning, strategic vendor engagement, and refined procurement practices, this program represents a compelling blueprint for organizations seeking to navigate the complexities of technology transformation and vendor optimization.

Source: Best Practices in Oil & Gas, Petroleum PowerPoint Slides: Oil and Gas - Technology Procurement Transformation PowerPoint (PPTX) Presentation Slide Deck, Affinity Consulting Partners

PPT SLIDE DEEP DIVES

Strategic Vendor Negotiation for Cost Reduction

This PPT slide outlines a case study where a Value Solutions Provider (VSP) successfully negotiated a contract with a security vendor, achieving significant cost savings of approximately $4 million, which equates to a 20% reduction. The project context highlights the evaluation of 5 IT vendors by Downstream LCG to manage support for over 125 custom applications. Initially, the service model was based on staff augmentation, with a clear goal to transition to managed services. The management's primary focus was on reducing total costs while maintaining service quality, especially for systems that directly impact revenue.

In the negotiations strategy section, the VSP's approach is detailed through 7 key levers. These included reducing rates based on industry benchmarks, securing multi-year discounts, and lowering transition costs. The strategy also emphasized the importance of providing efficiency gains over time, optimizing Project Management Office (PMO) costs, deferring Cost of Living Adjustments (COLA), and securing additional investments. The prioritization of rate reductions and other investments during negotiations with Tech Provider B is particularly noteworthy.

The results section quantifies the outcomes of these negotiations. It reports a reduction in application development rates for near-shore resources in Mexico by 7-9% and for off-shore resources in India by 10-20%. Additionally, prior transition costs and investments negotiated by the business unit, valued at $1.7 million, were preserved. This case study serves as a compelling example of effective vendor negotiations that can lead to substantial cost savings while ensuring quality service delivery.

Structured Vendor Sourcing Strategy Over Time

This PPT slide outlines the structure and phases of the VSP program, emphasizing a systematic approach to vendor sourcing over time. It is divided into several key sections, starting with "Quick Wins," which highlights initial tech providers and consultants engaged between February and April. This phase focuses on immediate opportunities for cost savings and efficiency improvements, showcasing a range of vendors from tech providers to consultants.

As the timeline progresses into the "Wave 1" and "Wave 2" phases, the slide illustrates a more comprehensive strategy. Wave 1, occurring in July and August, includes a broader array of vendors, indicating an escalation in both the complexity and scale of sourcing efforts. This phase introduces additional tech providers and infrastructure vendors, suggesting a focus on enhancing operational capabilities.

Wave 2, scheduled for September and October, continues this trend with an even wider selection of vendors, including security and data management services. The structure indicates a cascading approach, where each wave builds on the previous one, allowing for a more strategic alignment of vendor capabilities with organizational needs.

The financial metrics presented at the bottom provide insight into the potential addressable spend and in-year savings, with figures increasing significantly from the initial phases to the later waves. This suggests a well-thought-out plan aimed at maximizing value over time. The estimated results for Year 1 highlight the anticipated financial impact, reinforcing the program's potential effectiveness in transforming procurement strategies. Overall, the slide conveys a clear narrative of progressive vendor engagement designed to optimize procurement outcomes.

Enhancing Strategic Partnership with Tech Provider B

This PPT slide outlines a strategic initiative aimed at enhancing the partnership between an Oil & Gas (O&G) client and Tech Provider B. The primary motivation for this initiative is to improve commercial terms for IT services that are frequently acquired from Tech Provider B, such as consulting and application support. There’s a clear intention to leverage services from Tech Provider B that have not been utilized on a large scale, particularly in areas like systems integration. Additionally, the initiative seeks to reposition Tech Provider B to take on work from vendors that may be displaced due to vendor rationalization.

Expected outcomes include the initiation of negotiations by the client’s procurement team with Tech Provider B. The goal is to secure more favorable rates that reflect current market conditions and align with the O&G client’s historical and projected spending volumes. An updated Master Services Agreement is anticipated, which will feature improved terms and conditions. The alignment of Tech Provider B’s roles and rates with the client’s business requirements is also emphasized.

Implementation planning is crucial for ensuring continuity within the O&G client. This involves supporting ongoing project negotiations with Tech Provider B, regularly updating stakeholders on negotiation statuses, and assessing the organizational impact of the new partnership. Guidelines for utilizing Tech Provider B effectively and tracking benefits to understand ongoing savings are also highlighted.

The timeline for the initiative includes key activities for June, July, and beyond, focusing on contract negotiations, stakeholder education, and benefit tracking. This structured approach aims to maximize the value derived from the partnership with Tech Provider B.

Enhancing Procurement Efficiency through Strategic Collaboration

This PPT slide outlines a collaborative approach taken by the VSP across various business units to enhance the procurement operating model. It emphasizes leveraging existing global contracts, which are critical for optimizing vendor relationships and ensuring cost-effectiveness. The left section details how the VSP intends to utilize previously negotiated agreements with specific tech providers, indicating a strategic focus on maximizing existing resources. This approach not only streamlines procurement processes, but also fosters collaboration on ongoing initiatives with other vendors.

The middle section highlights the support for major Arabian business units in their sourcing initiatives. It provides a timeline for capturing initial savings, segmented into various strategies such as LSN/Frame Agreements and eSourcing. The estimated timeframes for these initiatives range from one month to 6 months, suggesting a phased approach to implementation. This structured timeline indicates a clear path for achieving financial benefits while also setting expectations for stakeholders involved.

On the right, the slide discusses the development of a common procurement operating model. It identifies visible components such as processes, organizational structure, and accountabilities, which are essential for ensuring alignment across business units. The emphasis on agreed procurement operating standards and the inclusion of people, systems, and measurement underscores the importance of a holistic approach to procurement transformation. This comprehensive strategy aims to create a unified framework that enhances efficiency and accountability within the procurement function. Overall, the slide presents a clear roadmap for improving procurement operations through strategic collaboration and structured initiatives.