Shell's IT outsourcing plans lambasted

Rumours of oil giant Royal Dutch Shell outsourcing more than 3,000 tech jobs have been met with anger and caution by key industry bodies who are concerned about the impact the decision may have on both IT staff and IT itself.

Industry union Unite (formerly Amicus) is believed to be considering legal action over Shell's redundancy packages, which offer IT staff up to £50,000 - a sum that is somewhat overshadowed by the £200,000 up for grabs when oil rig workers are made redundant.

While - in a warning that has wider industry implications for other companies keen to embrace the cost savings and other benefits on offer from outsourcing - National Outsourcing Association (NOA) is concerned that the move could potentially devalue the perceived role of IT in the company.

Outsourcing best practice is key, with the need for companies like Shell to involve unions right from the start at the top of the list, according to Martyn Hart, the NOA's chairman.

"What is of interest here is how Shell seems to treat its IT workers, in comparison to their oil rig workers. Shaving 75 per cent off their redundancy package looks like a fiscal kick in the teeth. And it's not just a monetary issue. This action could undermine the importance of IT's role within the company. IT is fundamental to the functioning of all organisations and Shell - and other companies - would do well to remember that," he said.

HR and procedures need to be "watertight" with communication and transparency being critical when it comes to outsourcing, according to Hart.

Furthermore, he said, when companies outsource they often experience issues with staff that remain.

"Shell would also be wise to remember that it hasn't offshored all IT jobs - the company is bound to retain an element of its IT personnel in the UK," he said. "How will the remaining staff be feeling? Not only will they feel undervalued, they could also feel a sense of uncertainty towards their future with Shell. Morale will be low."

News of Shell's outsourcing plans, which put AT&T, EDS and T-Systems in the frame, came to light via an internal company email forwarded to an unofficial site dedicated to providing news and insider information about Shell.

Shell hasn't yet put out an official announcement about its final IT outsourcing plans, but Michiel Brandjes, the company's secretary has responded to an email he received from the site where the rumours surfaced.

"The email is authentic," he said in an email. "It is not a matter of a leak though. Shell is currently in the midst of finalising contract negotiations with selected suppliers to outsource IT Infrastructure. This has been public knowledge since the announcement of a study to outsource a substantial part of IT Infrastructure to a few selected suppliers in Oct 2005. This decision has been the outcome of a transparent process involving employees and relevant works council."

IT PRO contacted Shell regarding the issue and a spokeswoman reiterated the areas outlined in Brandjes' email.

However, she was unable to officially confirm the number of employees that may be affected or provide any additional specific details or respond to the NOA's comments and proposed action by Unite.

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