Technology Sourcing in the Oil and Gas Sector (PowerPoint PPTX Slide Deck)

BENEFITS OF DOCUMENT

1. Technology Sourcing
2. Global Sourcing of Technology
3. Oil and Gas

DESCRIPTION

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

This deck summaries an approach and key topics for technology vendor sourcing in the Oil and Gas industry.

The objectives of the approach were to

1. Develop stronger relationships with vendors and greater support in executing O&G client's technology strategy

2. Provide the client with a simplified supply base with fewer vendors and fewer contracts

3. Ensure that the client enjoyed market competitive rates for products and services

4. Assist the client with setting up an established panel of vendors to serve global, regional and local requirements

5. Ensure that the client achieves better cost efficiency, service delivery and more accurate invoicing procedures with its technology vendor base

6. Ensure that the organization deveops and maintains Technology sourcing as a global capability, and in the process provide a career pathway for its staff involved in this critical function and the operations of governance in global sourcing and procurement processes more generally

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

PPT SLIDE DEEP DIVES

Cost Reduction Strategies in IT Vendor Negotiations

This PPT slide outlines a case study of a negotiation led by the VSP for a contract with Security vendor X, resulting in approximately $4 million in cost savings. The left side presents the project context, detailing the evaluation of 5 IT vendors by Downstream LCG to support over 125 custom applications. Initially, the service model was based on staff augmentation, with a clear objective to transition to managed services. The management aimed to lower total costs while maintaining service quality, particularly for systems that directly impact revenue.

The slide notes that the project narrowed down proposals from Tech Provider B and Tech Vendor V, with a preference for a mixed staffing solution. The VSP was engaged to negotiate further reductions in Tech Provider B's bid.

On the right side, the negotiation strategy is detailed, highlighting 7 key levers that the VSP focused on during discussions. These included reducing rates based on benchmarks, securing discounts for multi-year commitments, and lowering transition costs. The strategy also aimed to provide efficiency gains over time and optimize PMO costs. Additionally, it included deferring cost of living adjustments and securing other investments.

The results section summarizes the outcomes of these negotiations. It notes a reduction in application development rates for near-shore resources by 7-9% and for off-shore resources by 10-20%. Furthermore, prior costs and investments worth $1.7 million were preserved, showcasing the effectiveness of the negotiation strategy employed by the VSP.

Phased Approach to Technology Vendor Sourcing

This PPT slide outlines the structured approach of the VSP program in sourcing technology vendors over multiple waves. It categorizes the sourcing process into distinct phases, starting with "Quick Wins" and progressing through "Wave 1" and "Wave 2." Each phase lists specific tech providers and consultants involved, indicating a systematic escalation in vendor engagement over time.

The "Quick Wins" section highlights initial vendors, including Tech Provider F and BCM, emphasizing early gains in efficiency and cost savings. This phase appears focused on securing immediate benefits, likely to build momentum for the program. The subsequent waves show a more comprehensive engagement with a broader range of vendors, including hardware and software providers, as well as systems integrators. This suggests a strategic layering of vendor relationships, allowing for a gradual increase in complexity and potential savings.

Financial metrics are also presented, detailing addressable spend and in-year savings across the waves. For instance, the addressable spend grows from $170-205 million in the initial phase to $460-480 million in Wave 2, reflecting an expanding scope of sourcing activities. In-year savings are projected to fluctuate, indicating the varying impact of each wave on overall financial performance.

The final section summarizes the estimated results for Year 1, projecting a total of $830-905 million in addressable spend and $40-57 million in savings. This encapsulates the program's effectiveness in achieving its financial goals while establishing a framework for future vendor sourcing activities. Overall, the slide conveys a methodical and phased approach to technology sourcing, which can be critical for organizations looking to optimize their vendor relationships and drive cost efficiencies.

Integrated Procurement Strategy for Arabian Business Units

This PPT slide outlines a collaborative approach taken by the VSP across various Business Units to enhance the procurement operating model and identify opportunities. It is divided into 3 main sections: leveraging global contracts, supporting sourcing initiatives for major Arabian business units, and developing a common procurement operating model.

The first section emphasizes the importance of utilizing existing global agreements that the VSP has negotiated with tech providers. This includes collaboration on ongoing initiatives and vendor development, which suggests a strategic focus on maximizing the value from established partnerships. The mention of specific tech providers indicates a targeted approach to procurement, aiming to optimize resources and capabilities.

The second section details the support for major Arabian business units in their sourcing initiatives. It provides a timeline for capturing initial savings, indicating that the process is designed to be efficient. The timeframes range from approximately one month to 6 months, depending on the sourcing strategy employed. This structured timeline reflects a methodical approach to achieving financial benefits quickly, which is critical in a competitive environment.

The final section focuses on developing a common procurement operating model. It outlines visible components such as processes, organizational structure, and accountabilities. The diagram suggests an integrated framework that encompasses people, systems, and measurement, highlighting the need for alignment across various facets of procurement. This holistic view is essential for ensuring that all units operate cohesively towards shared goals.

Overall, the slide presents a comprehensive strategy aimed at enhancing procurement efficiency and effectiveness across the organization.

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. It is structured into 3 main sections: rationale, expected outcomes, and implementation planning.

The rationale highlights the need for improved commercial terms for IT services, specifically those frequently procured from Tech Provider B. It emphasizes leveraging previously underutilized services, such as systems integration, and positioning Tech Provider B to take over work from vendors who are being phased out due to vendor rationalization. This indicates a proactive approach to optimizing vendor relationships and maximizing value.

Expected outcomes detail the anticipated benefits from ongoing negotiations with Tech Provider B. The procurement team aims to secure more favorable rates that reflect current market conditions and align with the O&G client’s historical and projected spending. An updated Master Services Agreement with improved terms is also a key goal, along with better alignment of Tech Provider B’s roles and rates with the client’s business requirements.

Implementation planning focuses on ensuring continuity within the O&G client. This includes supporting in-flight project negotiations, regularly updating stakeholders on negotiation statuses, and assessing the organizational impact of the new partnership model. It also outlines the development of guidelines for utilizing Tech Provider B effectively and tracking benefits to measure ongoing savings.

The timeline presented for June through August indicates a structured approach to contract negotiations and stakeholder engagement, ensuring that all parties are informed and aligned throughout the process. This comprehensive strategy aims to foster a more effective and beneficial relationship between the O&G client and Tech Provider B.