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.
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Source: Best Practices in Oil & Gas, Petroleum PowerPoint Slides: Oil and Gas - Technology Procurement Transformation PowerPoint (PPTX) Presentation Slide Deck, Affinity Consulting Partners
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.
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Oil & Gas Integrated Financial Model Consulting Proposals Consulting Frameworks Consulting Project Management PowerPoint Diagrams Compilation Business Transformation Project Kick-off Sales Account Management Procurement Strategy Supplier Negotiations Decision Making Lean Management Cost Reduction Assessment Supply Chain Analysis Warehouse Management Consulting Sales IT Benefits Management Strategic Planning Energy Industry
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