Reinventing It at BP Essay Examples

In the first quarter of 2008, Dana Deasy (a four month old first Global CIO at BP) learned about BP’s continuous drawbacks and the lacking competition against counterpart oil and gas competitors. The CIO decided to contribute to the company by saving almost 33% of the annual spend of about $3 Billion on IT. It was not late for Deasy to realize the non-value add spends on 2,000 IT vendors and 45% contractors.
Deasy decided to go ahead with an overhaul of the entire IT structure of the organization and planned effective resource allocation, reaching to a total of $400 million savings in two years. A major step towards rejuvenation was to refresh the talent pool by bringing newer and more productive resources in the management and the executive streams. The resource allocation was not only done to improve the performances, but decentralization of the decision making was also among the thoughts that invited this step. The IT vendors, in number were around 4200 when Deasy took over, however the structure was updated and the number reduced to 2200 odd by 2009. Deasy’s initiative of rebidding $1.5 billion is expected to save around $900 million in the coming years as due to rebidding they were able to cut 1200 suppliers in new contracts.
The primary reason behind this turnaround is explained to be the power to take strong decisions and to move out of the comfort zone by getting into newer contracts and starting fresh. The requirement is to move out of that temptation of running is the same delivery process which sustains and slows down; success can be achieved by repeatedly renewing the contracts and managing expectations.