1. VENDOR MARKET ANALYSIS PROCUREMENT OUTSOURCING SHELL GERMANY, DECEMBER 2009 1

2. INTRODUCTION Oil Market Q408 marked an inflection point* Lower oil & 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

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

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

5. OBJECTIVES INTERNAL VENDOR SELECTION IMPLEMENTATION SG&A Ratio Top vendors Selection criteria Work plan Posible Characteristics Recomendations engagement Locations scenarios Clients ADVISORY VENDOR ANALYSIS REPORT 5

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

7. COMPANY Deutsch Shell Holding GmbH OVERVIEW Shell Germany AG -> lack of corporate information Deutsche Shell Holding GmbH Annett Buchholz (Shell Deutschland Oil GmbH Exploration Information und Presse) ...thanks! & Production Manufacturing, transportation and marketing of hydrocarbons Revenue 2008: 2,200 mEuro Oil Sands Gas & Power COGS: 1,800 mEuro SG&A: 110 mEuro * Procurement Pers.: 100-120FTE 7

8. COMPANY SG&A Ratio OVERVIEW Company SG&A Sales/rev. SG&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-> Reach Benchmarks 8

9. COMPANY SG&A Ratio OVERVIEW SG&A Sales/revenue SG&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-> Reach Benchmarks 9

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&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

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

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

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 & B Supply Chain USA Solutions *According Rank Procurement Vendors, Source: The Black book of Outsourcing, Brown-Wilson Group 13

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&A EBIT 2009 Name 1 Genpact India 37000 1040 619.2 166.4 254.4 14

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&A EBIT 2009 Name 2 Infosys India 106000 4700 2803 645 1252 15

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&A EBIT 2009 Name 3 Accenture USA 186000 23170 16329 3948 2893 16

17. VENDOR MARKET Mayor Players 2009 IBM Global Services *USA *IBM Global Services has the modest goal of making a smarter planet *Operates in about 170 countries. *Global Technology Services (GTS) encompasses IBM's business process outsourcing, infrastructure support, and product maintenance offerings; Global Business Services (GBS) Key Clients: TBD Locations: Asia Pacific, North America, Central America, South America, Africa, Europe, including Germany and UK. Rank Company Country Employees Revenue (2008) COGS SG&A EBIT 2009 Name 3 Accenture USA 186000 23170 16329 3948 2893 17

18. VENDOR MARKET Mayor Players 2009 Capgemini *France *One of the world's largest information technology, transformation and management consulting, outsourcing and professional services companies *91,000 people operating in 36 countries. Key Clients: Syngenta , Prudential Locations: Asia Pacific, North America, Central America, South America, Africa, Europe, including Germany and UK. Rank Company Country Employees Revenue (2008) COGS SG&A EBIT 2009 Name 9 Capgemini France 91000 12678.3 9429.4 1246.0 2002.9 18

19. VENDOR MARKET Mayor Players 2009 COGS SG&A EBIT Employees 70000 200000 180000 60000 160000 50000 140000 Revenue USD 120000 Employees 40000 7.5% 100000 30000 80000 4.5% 5% 20000 60000 3.3% 3% 40000 10000 20000 0 0 Genpact Infosys Accenture IBM Global Capgemini (Services) Vendor % of Revenue from PO Sources: Annual Reports of each company, financial statements 2008 19

20. VENDOR MARKET Chilean Player Sonda, Chile Sonda is the leader IT Service center in Chile and one of the most important in South America, with operations in Argentina, Brazil, and Mexico between others. Has clear expertise in the IT Outsourcing field in Chile, and in last years started some small PO services projects in Chile and Argentina. Key Clients: Shell Chile, Esso, Banco Chile, Miscrosoft Locations: Chile, Argentina, Mexico, Guatemala, Colombia Rank Company Country Employees Revenue (2008) COGS SG&A EBIT 2009 Name Sonda Chile 50000 872.0 679.0 87.0 106 20

21. VENDOR MARKET Mayor Players 2009 COGS SG&A EBIT Employees 5000 120000 4500 100000 4000 3500 80000 3000 Employees Revenue 2500 7.5% 60000 2000 40000 1500 4.5% 1000 1% 20000 500 0 0 Genpact Infosys Sonda Vendor % of Revenue from PO Sources: Annual Reports of each company, financial statements 2008 21

22. VENDOR SELECTION Weighted selection CRITERIA Criteria Summary Weight 1=very bad, 3=avg, 5=very good BPO1 BPO2 BPO3 BPO4 BPO5 BPO6 Experience and 40% 4.525 4.2 4.3 4.3 4.35 2.5 reputation Capabilities and 15% 4.2 4.2 4.4 4.4 4.5 2.55 knowledge Cost and contract 25% 4.3 4.3 3.7 3.7 3.6 2.4 Cooperation and trust 20% 4.05 4.05 4.1 4.1 4.55 2.6 Sum 100% 17.075 16.75 16.5 16.5 17 10.05 Capabilities and Knowledge Weight 1=very bad, 3=avg, 5=very good BPO1 BPO2 BPO3 BPO4 BPO5 BPO6 IT and SAP capabilities 30% 5 5 5 5 5 3 Consulting Capabilities 10% 4 4 5 5 5 4 Industry Expertise 10% 5 5 4 4 4 1.5 Process Expertise 30% 4 4 4 4 4 3 Language Capabilities 20% 3 3 4 4 4 1 Sum 100% 21 21 22 22 22 12.5 **Expertise, Culture,language, PO capabilities, SAP 22

23. VENDOR SELECTION Weighted selection CRITERIA 5 4.5 4 Cooperation and trust Cost and contract 3.5 Capabilities and knowledge 3 Experience and reputation 2.5 2 BPO1 Genpact 1.5 BPO2 Infosys 1 BPO3 Accenture BPO4 IBM Global (Services) 0.5 BPO5 Capgemini 0 BPO6 Sonda BPO1 BPO2 BPO3 BPO4 BPO5 BPO6 23

24. VENDOR SELECTION Workplan proposal CRITERIA Phase December January February March Agreement on RFP &Long list Send RFP Select short list and send notif. Bidders conference/one-one meetings Submission final offer Negotiations/due Diligence/site visit Final decision/contract closing Based on Offshoring Institute approach 24

25. FINAL PO- Vendor market analysis RECOMENDATIONS Analysis usability SG&A and economical downturn Expertise, cultural and language fit, market participation Different engagement options should be evaluated +25% costs savings as base PO-growing market-control required-Shadow Operations CPI (Country and from Vendor provider)->Negotiation structure 25

26. END Thanks! Questions?? How can Company objectives regarding BPO project affect the vendor selection? 26

27. END Thanks! References Global Sites http://www.shell.com/ http://www.wikipedia.com http://www.genpact.com http://www.capgemini.com/ http://www.accenture.com http://www.infosys.com http://www.theblackbookofoutsourcing.com/ https://www.ebundesanzeiger.deNews/ News/Blogs sites http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=n ews_view&newsId=20090707005016&newsLang=en http://logisticstoday.com/mag/outlog_story_5576/ http://www.outsourcing-journal.com/dec2009-chile.html http://www.everestresearchinstitute.com/Product/10972 27