Structuring enduring strategic alliances: the case of Shell Australia and Transfield Services

摘要

Many large firms in Australia, the US and the UK are moving to service outsourcing which covers the sectors of information technology, business processing and engineering and facilities management (EFM). Whilst firms in the UK and the US have significant percentages of IT and business process services already outsourced, the Australian market is less developed.rnHowever, in the engineering and facilities management sector Australia is one of the most advanced countries in the world. When EFM outsourcing started in the early 1990s, it was primarily to reduce costs in non-strategic areas. Once these efficiencies have been gained, the next challenge for managers is to continue to build value in third party partnerships and leverage strategic skills that would not otherwise be available. Shell was one of the first to move into outsourcing EFM and their experience over 16 years is therefore worthy of study. Shell and their current partner Transfield face new challenges after having successfully built a relationship where considerable labor savings were made in the first phase. Phase two encompassed incremental innovation as part of their strategy to become one of the most efficient maintenance operators in the world as judged by the Solomon Ml index. As they move into a "third generation" arrangement, they face a challenge of how to continue to improve the alliance outcomes.rnShell's best practice approach is generally applicable to all organizations in the quest for competitive advantage in an increasingly competitive global environment. Firms first need to establish the necessary building blocks of trust, and demonstrate flexibility to enable a cooperative environment in the initial developmental phases of their relationship. This will lead to the next phase in the form of synchronizing the culture and processes to measure and delivering best in class outcomes.