Nilf2012_Global IT Supply Chain Bryan Cruickshank- KPMG

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Nilf2012_Global IT Supply Chain Bryan Cruickshank- KPMG

  1. 1. Global IT SupplyChainBryan CruickshankNASSCOM 2012February 2012
  2. 2. The ITO businessEvolution of ITOResulting challengesEmerging trendsThe CIO collaborating with CxOsGlobalization
  3. 3. The ITO businessEvolution of ITO 2010 onwards Transformational solutioning 2000-09 ■ Integrated and collaborated global delivery of services Strategic offshoring ■ Leverage expertise from 1990-99 ■ Companies focus on core centers of excellence, alliance activities and source non-core partners and member firms Tactical outsourcing activities globally ■ Cost reductions obtained ■ Long term sourcing ■ Use of global partnerships to through labor rate arbitrage relationships redefine business offerings ■ Short term vendor-supplier ■ Long term view of sourcing and co-create new products relationships with partner firms ■ Immediate noticeable gains to the organizations Increased business value© 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent 2member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.
  4. 4. The ITO businessEvolution of ITO – technology driversEvolution of technology is driving changes in the ITO models Cloud computing Hosted/Co-located environment ■ Emergence of the ■ IT infrastructure ‘as a service’ Client Server management paradigm Architecture services provided by ■ Delivery of ■ Emphasis on third party providers IaaS, PaaS, and networking ■ Birth of the SaaS Rise of the PC infrastructure ■ Demand for ■ A move from ■ Rise in demand and outsourcing CAPEX to OPEX bandwidth began to penetration of the ■ Used for reducing Mainframes rise ■ Collaborative personal desktop costs and increasing ■ Rise in operational solutions that cater focus on core■ Start of the ■ Decentralized expenditure to real time activities Automation phase computing information ■ Introduction of ASP ■ Resulted in the■ Localized ■ Birth of the IT technology creation of large management infrastructure services Industry data centers ■ Utility computing ■ Dot Com revolution■ Expensive ■ Increased use of model Virtualization ■ High bandwidth requirements Pre 1970s 1980s 1990s 2000s Beyond 2010 Automation Decision support/virtual interfaces Borderless technologies & the virtual worldSource: KPMG’s The Cloud: Changing the Business Ecosystem, 2011© 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent 3member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.
  5. 5. The ITO businessEvolution of ITO – customer requirements Able to adapt to the customer’s local environments Analysts value global capabilities Large IT player are establishing capabilities across the “Accenture continues to deliver solid double-digit revenue globe growth and record bookings due to strength in management consulting, end-to-end and integrated business and technology offerings, vendor independence, thought leadership, deep domain expertise, and a 141k-strong low-cost Global Delivery Network (60% of Accenture employees).” Analyst report by Deutsche Bank, December 2011 Australia “HP Enterprise Services has announced the expansion of Best Shore – its global services delivery model – by designating six countries as global delivery hubs that will grow to support increasing client demand for cost- Key advantages customers are seeking efficient, scalable services that effectively meet business needs.” ■ Flexibility, up and down News reports, November 2010 Nokia Siemens sets up third global centre at Noida. The ■ Talent Management new centre complements the company‟s two GNSCs ■ Proven solutions (Global Network Solutions Centre) in Lisbon (Portugal) and Chennai. “We are pioneering a ■ Global reach unique, centralized, global delivery model through our integrated, multi-technology, multi-vendor central delivery ■ Cost competitive hubs – what we call the GNSCs – which provide global scale and drive the world‟s most efficient networks.” ■ Standardization of delivery News reports, 2009© 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent 4member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.
  6. 6. The ITO businessResulting challenges Regulation ■ Local regulators ■ Local taxation ■ Intellectual Property protection ■ Transfer pricing Resourcing globally Operating globally ■ Dispersed employee base Challenges ■ Functioning across time zones ■ Visa constraints facing the ■ Collating/consolidating ■ Complex reporting structures and industry information business processes ■ Tracking performance ■ Local autonomy v global consistency Competing globally ■ Increased competition among vendors ■ Industry insight ■ Customer centricity© 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent 5member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.
  7. 7. Emerging TrendsThe CIO collaborating with CxOs CxO‟s challenges driven by How CIOs can help mitigate the challenge globalization Increased ■ Capture, summarize and share risk information enterprise-wide regulatory and financial risk ■ Automation of risk and remediation processes Moving into new ■ Leveraging local capabilities into a global delivery model markets and services ■ Speed and agility in integrating acquisitions to fuel inorganic growth Improving ■ Automate existing manual processes to drive operational efficiencies business ■ Performance management tools that transform enterprise data into business efficiency intelligence ■ Consolidating infrastructure elements and providing a platform for data Data quality standardization ■ Supporting data management and governance Redundant ■ Technology enabled shared services and centers of excellence processes across geographies ■ Platform consolidation CxOs‟ reliance on CIOs is expected to increase in order to deal with the emerging challenges© 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent 6member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.
  8. 8. Emerging TrendsGlobalization of ITO Global ITO helping customers ITO Factors to meet Customer Factors global Increasing focus on industry challenges Technology assets/IP speeds specific solutions business transformation Greater levels of technology New & emerging technologies and business integration blurring business and Increasing use of core global technology distinction capabilities for local delivery Innovative pricing models and Globalisation driving ways to access consumers extended footprint in new Increasing Business looking at ITO to markets ITO delivery drive and enable business from an India hub Prospering in a more complex global ecosystem will require new approaches and new collaboration© 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent 7member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. 7
  9. 9. Thank you© 2012 KPMG LLP, a UK limited liabilitypartnership, is a subsidiary of KPMG Europe LLPand a member firm of the KPMG network ofindependent member firms affiliated with KPMGInternational Cooperative (KPMG International), aSwiss entity. All rights reserved.The KPMG name, logo and „cutting throughcomplexity‟ are registered trademarks ortrademarks of KPMG International Cooperative(KPMG International).

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