Shell outsources IT for $4 billion

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Shell have announced five-year global deals worth over $4 billion (£2 billion) with AT&T, T-Systems and EDS to outsource its IT and telecom services.

Shell said they wanted to outsource its IT to cut costs and significantly improve efficiency and productivity. It said that the majority of affected staff would move to the other service providers, with 'minimal' redundancies and consultation with employee representative bodies.

AT&T will be used for network and telecommunications, T-Systems for hosting and storage, and EDS for end user computing services and for operational integration of the infrastructure services.

The news had been expected since an unofficial Shell news website released details of an internal company email it had been forwarded.

Under the Master Service Agreements, Shell will outsource the provision of its IT infrastructure and telecommunications services in three service bundles, which start in July of this year.

"This deal is a major strategic choice for Shell. Partnering with EDS, T-Systems and AT&T gives us greater ability to respond to the growing demands of our businesses," said Alan Matula, Shell's chief information officer.

"It allows Shell IT to focus on Information Technology that drives competitive position in the oil & gas market, whilst suppliers focus on improving essential IT capability."

IT PRO reported back in January about how the National Outsourcing Association(NOA) and the industry union UNITE expressed fears that Shell's outsourcing plans would devalue the role of IT in the company.

At the time the union was concerned that the redundancy packages offered to IT staff would be dwarfed by that given to oil rig workers.

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