by Staff Reports • @IBMinsights

BP, IBM, and SAP link to drive fuel giant’s enterprise IT strategy

Published October 24, 2014


NEWS BRIEF--Energy giant British Petroleum has selected IBM’s consulting arm to provide application development services for the gas company’s use of SAP technology.

BP is tapping IBM's globally integrated consulting models to develop and deploy an enterprise systems portfolio across the fuel multinational’s main tactical areas—including BP’s Upstream, Downstream and Global Functions.

The confluence of three leading global firms illustrates the dovetailing priorities of the tech- and energy-focused world economy. IBM and SAP have both attempted to reposition themselves as leading providers of the most talked-about technology—cloud services—while they struggle with changing demand and products that grow stale.

Meanwhile, BP aims to manage over 80,000 employees and 14 refineries around the world—a mammoth effort that surely any executive would be quick to support with investments in the latest IT solutions.

At once competitors and partners in a dynamic marketplace, IBM and the German-based SAP have a long history of shared ingenuity. IBM has been working with SAP to enable the cloud-based HANA software on IBM System x. IBM will help BP create a platform that aims to streamline a strong pipeline of projects and opportunities that capitalize on BP’s strengths. IBM’s 30 years of expertise in SAP consulting will be leveraged to help BP gain the most value from its SAP investments by simplifying, standardizing, and consolidating its IT software applications globally.

“Through this contract, IBM will help BP to accelerate the implementation of SAP across the organization and lower our overall cost base,” says Mike Gibbs, BP Group CIO. “IBM has been a valued partner in providing IT services to BP, and we look forward to further improvements to be delivered by IBM in the SAP Applications Development space.”

The news comes as IBM must respond to disappointing financial results in 2014. Insight Magazine reported earlier this week that, “net income for the [third] quarter from continuing operations was $3.5 billion, down 17 percent from $4.1 billion in the third-quarter of 2013. The company’s third-quarter diluted earnings from continuing operations of $3.46 per share is down 8 percent from earnings of $3.77 per share in the third-quarter of 2013.”

“We are disappointed in our performance,” IBM’s Ginni Rometty says in a statement. “We saw a marked slowdown in September in client buying behavior, and our results also point to the unprecedented pace of change in our industry. While we did not produce the results we expected to achieve, we again performed well in our strategic growth areas—cloud, data and analytics, security, social, and mobile—where we continue to shift our business. We will accelerate this transformation.”

SAP, too, has experienced staff changes throughout the year, with several executives moving on, including Vishal Sikka and marketing head Jason Rose.

With expectations high for Big Blue to restore its performance as a revenue-making IT leader, IBM has consistently met high standards for quality delivery as well as creating tangible business value for BP.

“It is a privilege to serve BP with our global presence, relentless focus on service and our drive for continuous innovation,” says David Marley, IBM Managing Director. “Looking to the future, we will continue to bring together IBM’s integrated services management, research capabilities, and innovative technologies to provide BP the right mix of skills and capabilities they need to support their business and drive future growth.”



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