BP taps HP for IT ops Oil giant BP looks likely to make cuts in its European and US IT departments to help allay the costs of the Deep Water Horizon disaster in the Gulf of Mexico. BP International Ltd announced today that it has expanded an IT outsourcing deal it has operating in the United Kingdom to cover all of the oil company's operations in …
There are really only two ways that outsourcing can produce genuine savings while providing reasonable profits to the outsourcing supplier:
[1] if there are substantial economies of scale - hardly likely for an outfit the size of BP; or
[2] if the existing setup is already FUBAR - in which case fire the dolts* responsible and employ someone who knows what they're doing.
Of course the beancounters and suits are only worried about the next quarter's numbers (maybe next year's, if you're lucky enough to have really 'far-sighted' management) and like the swift cash injection from the 'sale and leaseback' part of the outsourcing agreement.
* And if you can't manage your own internal IT operations, what the hell makes you think you can manage outsourced IT operations. And if you think that outsourced operations don't require careful and attentive management, you're setting yourself up for an absolutely epic fail.
You only have to use BP's current helldesk to see how outsourcing works.
My friend recently joined them on contract and had to provide their own PC, which no-one in the company seemed to be able to help set up the applications on.
Each time they called the helpdesk, the operator asked the problem, suggested a fix, then closed the logged call even if the fix didn't work.
Result? The stats show the helpdesk are very busy and fixing lots of problems. Examine it more closely and you potentially have multiple contractors sat on their backsides waiting (in this case) two weeks for someone to finally configure the require apps.
False economy and incorrect reporting.
My friend was on the brink of walking offsite to take a contract where the IT department actually gave a sh1t.
What I find amazing is that how come these companies think that devaluing your IT overhead is gonna make things better?
You cant have better for cheaper. Thats not my rant, thats a universal law.
IT - Its like gas water and electricity - its an essential overhead.
400M deal ? - 400m is like less than 1% of BP's turnover ? They can earn that in a single EXPRO day.
I was working at a Bank - and this Senior guy was saying ' in the 1970's we were the biggest Bank in the World - and we did it all without computers. And its this thinking and the promises of suppliers to cut costs that fules outsourcing.
Until this culture of old thinking dies then this will happen - but it must be time for a company to increase its IT - invest in itself and WANT to do better.
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