BG Group drives cost optimization with a governance framework and IT standardization

TCS played a pivotal role in helping BG Group, an international natural gas company to adopt an integrated planning and scheduling approach to integrate IT plans more closely with its business plans.

The Customer
BG Group plc is an international natural gas exploration and production and liquefied natural gas (LNG) company. The company is involved in the discovery, extraction, transmission, distribution and supply of oil and natural gas to existing and developing markets around the world. It has operations in more than 20 countries across Africa, Asia, Australia, Europe, North America and South America. Founded in 1997, BG Group is headquartered in Reading, the United Kingdom.

Business Scenario
In 2014, BG Group was faced with unfavorable production forecasts and a drop in overall profitability. This galvanized the company to deliver its business plans using an integrated planning and scheduling approach to streamline operational planning and forecasting, as well as reduce operational costs. As part of this initiative, the company's Global IT group was given two objectives: the first was to integrate IT plans with business plans and the second was to reduce IT operational expenses.

To integrate IT plans with business plans, Global IT needed a standard approach to engage with the business and institutionalize the deployment of standard IT capabilities at key business milestones along the lifecycle of strategic business units. On the other hand, to reduce operational expenses, Global IT had to first establish an accountability framework for managing IT across a complex matrix of business functions and business units spread across 23 countries.

TCS’ Solution
The TCS team began by taking stock of the existing IT landscape. Extensive workshops with different stakeholders from Global IT — solution architects, IT service owners and subject matter experts (SMEs) — helped identify and create a master catalog of applications. This exercise enabled the rationalization of the existing application catalog in the Enterprise Architecture repository by 50 percent. Applications that were redundant or had outlived their utility were noted.

The next stage of the program was to create a structured approach for IT to engage with business functions. A governance framework was created to facilitate each business function's accountability and ownership of IT applications. The TCS team worked closely with Global IT's Enterprise Architecture team to create functional IT toolkits and to align these toolkits with the master catalog of applications. Key applications were identified and classified as 'core' or 'specialist.' Application attributes such as user footprint, application lifecycle and IT service category were also recorded.

The functional IT toolkits became the basis of discussions between business and IT. This paved the way for an engagement model through a governance board comprising Business, IT Service Management and Enterprise Architecture for ownership of IT estates. The TCS team identified toolkit-specific IT requirements such as applications and infrastructure, and linked them to cost drivers to enable future cost optimization on application portfolios. Cost visibility enabled fact-based decision-making and governance and shall facilitate future IT cost optimization.

Key Benefits

  • Rationalization of the applications catalog in the Enterprise Architecture repository by 50 percent
  • Determination of areas for cost optimization across the IT landscape
  • Identification of focus areas for discussions on accountability and ownership of core business and IT applications
  • Gap analysis of standard reference IT architecture across functions to drive efficiency and consistent IT standards

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