The Oil and Gas (O&G) industry has been a moderate adopter of global sourcing. However, with declining oil prices and associated cost pressures, the industry is going through a transformative phase. Leading players have increased their focus on cost optimization to deal with declining revenues and profit margins. As a result, firms have started adopting emerging technologies (e.g., analytics, mobility, and IoT) to enhance operational efficiency. Moreover, players have also explored global services in upstream processes, that have traditionally been supported onsite and internally.

Scope

In this research, we have analyzed global sourcing trends in the oil & gas industry. The research covers:

• Key drivers for adoption of global sourcing in the O&G industry
• Buyer adoption trends for leading players (aggregated and differentiated by upstream vs. downstream line of business), covering:
• Functions/processes
• Locations
• Sourcing model(s)
• Technology landscape in the O&G industry – covering digital maturity of global services, extent of adoption, and investments in future growth areas by leading firms
• Growth outlook in next few years

Key findings

• Driven by a volatile market environment, multiple O&G companies have adopted the global services model – outsourcing and offshoring
• Amid the financial pressures surrounding the oil and gas industry, buyers are focusing on enhancing digital capabilities for increase in efficiency-/-productivity
• While at an industry level, firms utilize both Global In-house Centers (GICs) and service providers, and are skewed towards more resources in offshore/nearshore locations, there are variations based on lines of business (downstream vs. upstream), functions, and individual players
• SPs typically cater to IT services, even as the share of BPS continues to increase in outsourcing deals
• GICs deliver both IT and BP services. However, share of BP services FTEs is higher, with F&A and HR being the leading functions

Membership(s)

Catalyst

Market Vista