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<ul><li> 1. VENDOR MARKET ANALYSIS PROCUREMENT OUTSOURCING SHELL GERMANY, DECEMBER 2009 1 </li> <li> 2. INTRODUCTION Oil Market Q408 marked an inflection point* Lower oil &amp; gas prices; weak energy demand Prudent approach to economic downturn Standardization , cost reduction and process optimization is required Outsourcing *Source: Shell Annual Report Q109 2 </li> <li> 3. INTRODUCTION Vendor Market BPO services increasing in quality, accuracy, efficiency Tradicional BPO market increasing CAGR 24%, $450Bn by 2012* Vendors are getting better...market is growing Vendors Specialization *Source: Infosys Market Report, 2009 3 </li> <li> 4. AGENDA 1. INTRODUCTION 2. OBJECTIVES---METHODOLOGY 3. PROCUREMENT OUTSOURCING (PO) 4. GENERAL COMPANY OVERVIEW-WHY TO IMPROVE? 5. BPO ENGAGEMENT SCOPE-MAIN SCENARIOS 6. PO-VENDOR MARKET INSIGHTS 7. FINAL COMMENTS 4 </li> <li> 5. OBJECTIVES INTERNAL VENDOR SELECTION IMPLEMENTATION SG&amp;A Ratio Top vendors Selection criteria Work plan Posible Characteristics Recomendations engagement Locations scenarios Clients ADVISORY VENDOR ANALYSIS REPORT 5 </li> <li> 6. PROCUREMENT PO Highlights Procurement processes Activity %SSC Direct- Indirect Procuremet Transactional Processes Catalogue 80% Captive vs. BPO solution Management Supplier Help Desk 90% Supplier Credit Check 90% Quantity Transactional 90% Purchasing Small Item Purchasing 90% Nature Value Ordering 95% Frecuency 6 </li> <li> 7. COMPANY Deutsch Shell Holding GmbH OVERVIEW Shell Germany AG -&gt; lack of corporate information Deutsche Shell Holding GmbH Annett Buchholz (Shell Deutschland Oil GmbH Exploration Information und Presse) ...thanks! &amp; Production Manufacturing, transportation and marketing of hydrocarbons Revenue 2008: 2,200 mEuro Oil Sands Gas &amp; Power COGS: 1,800 mEuro SG&amp;A: 110 mEuro * Procurement Pers.: 100-120FTE 7 </li> <li> 8. COMPANY SG&amp;A Ratio OVERVIEW Company SG&amp;A Sales/rev. SG&amp;A ratio Rank BP 15,412 361,143 4.27% 3 EXXON 15,873 459,579 3.45% 1 MOBIL DUTCH SHELL 17,028 458,361 3.71% 2 SHELL 110 2,200 5.00% 4 GERMANY Cost Savings Oportunities-&gt; Reach Benchmarks 8 </li> <li> 9. COMPANY SG&amp;A Ratio OVERVIEW SG&amp;A Sales/revenue SG&amp;A ratio 500,000 10% 450,000 9% 400,000 8% 350,000 7% Revenue (mEur) 300,000 5.00% 6% 250,000 4.27% 5% 3.45% 3.71% 200,000 4% 150,000 3% 100,000 2% 50,000 1% 0 0% BP EXXON MOBIL DUTCH SHELL SHELL GERMANY Company Cost Savings Oportunities-&gt; Reach Benchmarks 9 </li> <li> 10. BPO ENGAGEMENT Procurement Process Costs (PPC) SCOPE Procurement Process Costs (PPC) are 1.49% of COGS (2008) Europe segment Income for 2008 corresponds to 8,809 mEuro, which represent the 33.25% of the total Income of the period for Royal Dutch Shell*. Shell operation in Germany will be estimated considering**: Revenue 2008: 2,200 mEuro COGS: 1,800 mEuro PPC = 0.0149 x 1,800 = 26.82 mEuro SG&amp;A: 110 mEuro ** Procurement Pers.: 100-120FTE *Source: Shell Earnings by Business Segment and Identified Items 2008, Financial reports, shell.com **Informed by communications department of Deutsche Shell Holdings GmbH 10 </li> <li> 11. BPO ENGAGEMENT Scope SCOPE Procurement processes in Scope Activity Employees and Costs Procurement Process Catalogue Management 26.82 M Costs (yearly basis) Supplier Help Desk FTE in Scope 120 FTE Supplier Credit Check Average Tenure 11.5 years Transactional Purchasing Fully Fringed Costs 56,500.00 Small Item Purchasing Retained FTE 15%*** Procurement expected Ordering +25%* savings Countries /Locations 1 location Germany (Hamburg) *Source: http://logisticstoday.com **Informed by communications department of Deutsche Shell Holdings GmbH ***Similar businesses retained FTE 11 </li> <li> 12. BPO ENGAGEMENT Scope SCOPE 20000 10000 0 1 2 3 4 5 Investment -10000 -20000 -30000 -40000 -50000 -60000 -70000 -80000 50%Savings Scenario At least 5 years Contract 12 </li> <li> 13. VENDOR MARKET Mayor Players 2008-2009 2009* Company Name Country 1 Genpact India 2 Infosys India 3 Accenture USA 2 1 4 ICG Commerce USA Europe 5 IBM Global USA USA 6 Ariba USA India 7 7 Oracle BPO USA 8 Corbus USA 9 Capgemini France 10 D &amp; B Supply Chain USA Solutions *According Rank Procurement Vendors, Source: The Black book of Outsourcing, Brown-Wilson Group 13 </li> <li> 14. VENDOR MARKET Mayor Players 2008-2009 Genpact *India *It was formerly a GE owned company called GE Capital International Services or GECIS. *37,000 people in various locations,30 languages on a 24/7 basis. Key Clients: Philips, Shell, Allianz, and Akzo Locations: United States, Mexico, Guatemala, Netherlands, Poland, Hungary, Romania, Spain, Morocco, South Africa, India, China, Philippines Rank Company Country Employees Revenue (2008) COGS SG&amp;A EBIT 2009 Name 1 Genpact India 37000 1040 619.2 166.4 254.4 14 </li> <li> 15. VENDOR MARKET Mayor Players 2008-2009 Infosys *India *Second-largest IT company in India, 106,000 professionals *Offices in 22 countries and development centers in India, China, Australia, UK, Canada and Japan Key Clients: Tesla Australia, Phillips, DHL Locations: Asia Pacific, North America, Europe (Belgium,Denmark, Finland, France, Germany, Stuttgart, Milano, Poland, The Netherlands, Spain, Sweden, Switzerland and UK) Rank Company Country Employees Revenue (2008) COGS SG&amp;A EBIT 2009 Name 2 Infosys India 106000 4700 2803 645 1252 15 </li> <li> 16. VENDOR MARKET Mayor Players 2008-2009 Accenture *USA * It is said to be the largest consulting firm in the world. *186,000 people in 52 countries. *Accenture's clients include 96 of the Fortune Global 100 and more than three quarters of the Fortune Global 500. Key Clients: Microsoft, ING, BC Hydro, Deutsche Bank, Roche, Bayer MaterialScience, Royal Dutch Shell Locations: Asia Pacific, North America, South America, Africa, Europe, including Germany and UK. Rank Company Country Employees Revenue (2008) COGS SG&amp;A EBIT 2009 Name 3 Accenture USA 186000 23170 16329 3948 2893 16 </li> <li> 17. VENDOR MARKET Mayor Players 2009 IBM Global Services *USA *IBM Global Services has the modest goal of...</li></ul>