02/04/2008

Royal Dutch Shell has just signed a new outsourcing agreement worth $4.2 billion (£2.1 billion) that will make significant improvements to the company's efficiency and productivity.

The five-year deal is with three global IT and telecommunications suppliers - T-Systems International, AT&T and Electronic Data Systems - and is one of the largest outsourcing contracts of the past five years.

Under the terms of the agreement, T-Systems, a subsidiary of Deutsche Telekom, will assume control of Shell's hosting and storage operations, EDS will provide business support, end-user computing services integration and infrastructure services, while AT&T will assume responsibility of network and telecommunications systems.

Shell plans to retain just 600 IT infrastructure employees once the contract is underway, transferring around 3,000 IT jobs to the three service providers from July.

Alan Matula, Shell CIO, said that signing the outsourcing agreement will enable Shell to "focus on information technology that drives competitive position in the oil and gas market, whilst suppliers focus on improving essential IT capability".

Shell has insisted that the three-part outsourcing deal will ensure that layoffs will be kept to a minimum. Most parts of the contract come into force on July 1st 2008, providing services to 150,000 Shell users across 100 countries.