This is a key area for aligning your stakeholders. You are likely to make different choices if your top priorities are enabling rapid growth and access to new skills vs. cost reduction.
Knowledge of competitive market standards shows clients where existing services stand on the cost/quality spectrum, what opportunities for improvement exist and whether a proposed solution is economically viable. Negotiating expertise is needed to define requirements, evaluate proposals and craft a successful agreement. Knowledge of provider capabilities allows a client to identify and assess vendors best-suited to meet a particular set of requirements.
Minefield? Or Greenfield? Mid-Market Sourcing Strategies
Minefield? Or Greenfield?Mid-Tier Sourcing Strategies for Buyers and Providers December 11, 2012 Sponsored by: Wall Street Tech Conference & Expo Produced and Presented by: The Outsourcing Institute
Today’s Speakers Moderator Dan Goodstein Vice President The Outsourcing Institute Debora Card Stanton Jones Partner , Research and Subscriptions Analyst, Emerging Technology ISG ISG
• Located at outsourcing.com – Largest Professional Association of Outsourcers with 70,000 Members Globally• Gateway to Resources, Trends, Best Practices, Case Studies• Recently launched OTV, including new RPO Video Channel• Outsourcing Jobs Opportunities and Recruiting Services Through CMS Inc.• For Buyers: – Training Through OI University – Outsourcing RFP Builder Software and Related Tools – Vendor Matchmaker Service• For Providers: – Sponsorship and promotions – Marketing Campaigns for brand acceleration and exposure – Performance-based Integrated Sales and Marketing Programs for lead generation & business developmentFor more information contact us at:email@example.com or 516-279-6850 ext. 712 3
1 Sales Readiness 2013: What Outsourcing Wall Street Tech Conference Service Providers Need to Succeed in the New March 13, 2013 in NYC Year CIOs, CTOs and Tech Sourcing Execs in Banking, Financial January 29, 2013 in London, England Services & Insurance to Explore "T-5": Sourcing, Cloud January 30, 2013 in Dallas, Texas Computing, Big Data, Mobility, Security & Compliance - also known as "T-5", or the five critical technology- January 31, 2013 in Atlanta, Georgia related trends creating both opportunities and risk for banking, financial services and insurance organizations - The Outsourcing Institute’s Service Provider Summit Series is your will be explored at the Wall Street Tech Conference & ticket to more sales and stronger ROI. Each event in the series delivers Exhibition. powerful, actionable insights. Arrive hungry for time-tested strategies. Leave with hit-the-ground-running practices proven to propel your sales to the next level. You’ll discover… - What you need to know… - Who you need to know… - What you need to do… - How you need to do it… - Where you need to be… … to transform your top line and bottom line in 2013 – and beyond.To learn more and register for events visit www.outsourcing.com/events
Agenda1. Setting the stage2. Initial steps3. Beyond the basics4. Game Changers: Cloud and SaaS5. Keys to success 5
Setting the Stage: G2000 Sourcing ActivityWhile sourcing activity in the Forbes G2000 is relatively entrenched within the world’slargest 500 organizations, most smaller companies have not yet embraced sourcing. Market Penetration by Forbes Rank 2000 Companies Outsourcing Prior to 2008 Growth Since 2008 Market Potential 1 - 50 42 1 7 51 - 100 45 2 3 Forbes Global 2000 Rank 101 - 200 60 13 18 201 - 500 169 24 107 501 - 1000 180 49 271 1001 - 1500 109 39 352 1501 - 2000 75 21 404 6
Setting the Stage: G2000 Sourcing ActivityOver 450 service providers are winning deals among the Forbes 2000. While the growingnumber of providers reflects the increasing propensity to engage in specialized multi-provider relationships, it also points to a high degree of market complexity. A Field of 467 Providers Winning Providers by Forbes Ranking of Companies Total 467 Forbes Global 2000 Rank G1 - 500 252 G501 - 1000 118 G1001 - 2000 104 Non-G2000 327
Initial Steps: WhyUnderstanding and prioritizing your sourcing objectives will ensure that you make theright trade-offs as you evaluate your sourcing options. Cost Reduction Offload Enable non- rapid strategic growth Common functions Sourcing Objectives Access Access to new new skills technology
Initial Steps: WhatNot all activities are equally suitable for outsourcing; typically transaction andoperational services are stronger candidates. Application Development & Maintenance ADM Strategy Development Suitability For SourcingHigh Requirements Definition Strong retained candidate Strategic Application Architecture Possible outsourcing candidate Application QA Services Strong outsourcing candidate Application Testing Configuration Management Version Control Application BuildEnterprise Value Added Application Design Performance Testing Operational Services Application Coding Security Administration Technical Training 2nd Level Technical Support Application Maintenance 1st Level Technical Support User Training Transaction Services Basic Complexity of Interaction High
Initial Steps: HowThere are also choices regarding the type of target operating model (how) that will bebest suited to meet your primary objectives (why) and desired sourcing scope (what).
Initial Steps: Avoiding Common MistakesMid-sized organizations can learn from the mistakes made by larger organizations whohave gone before them. 1 Understand the existing environment 2 Expect the provider must make a profit 3 Big isn’t necessarily better 4 Don’t underestimate internal management requirements 5 Put the right team in place with the right tools 6 Focus on continuous improvement 7 Facilitate transformation
Beyond the BasicsBusinesses that have an established track record in the basics of outsourcing may aim totake the next step on the maturity scale and integrate multi-sourced models, governancemechanisms and process optimization into their environments. Getting Managing multiple multiple providers to contracts collaborate Responding Assessing to changes renewal or in the rebidding business options
Outsourcing and CloudCloud is increasingly a key component in an sourcing strategy. Companies are attractedto more flexible pricing structures, as well as the opportunity to dramatically lowersoftware and infrastructure provisioning times. Percentage of ISG Advised Contracts with Cloud in Scope 27% 20% 9% Number of Industrywide Contracts with Cloud in Scope* 2010 2011 2012 YTD ↑100% 300e 220 110 2010 2011 2012e *ISG Contracts Knowledgebase®
SaaS vs BPO: What is the Difference?The SaaS delivery model alone does not address buyer’s desire to outsource routinetransaction processing and other back office support processes. Software as a Service (SaaS) Business Process Outsourcing (BPO) Employee Portal Employee Portal Employee Contact Employee Contact Customer Managed Transactions Transactions Configuration Configuration Provider Application Application Managed Middleware Middleware Provider Database Database Managed Operating System Operating System Infrastructure Infrastructure 14
Keys to SuccessWherever a mid-tier organization is on its sourcing journey, essential success factorsinclude: Knowledge of Knowledge competitive of provider market capabilities standards Negotiating Expertise Sourcing Success
The Power of One: ISG-OneISG is a leading technology insights, market intelligence and advisory servicescompany, offering clients one source for support in driving operational effectiveness. The world’s leading sourcing data and advisory firm. the power A premier independent technology advisory of One serving the The premier independent U.S. public sector provider of business and IT benchmarking, performance improvement, data and analytics services. 16
Get Help When You Need It With AccessISG™?A subscription knowledge service that provides on-demand access to ISGdata, insights and experts Sourcing Portal ► Service provider capabilities database with requirements matching engine, detailed profiles ► In-depth research on market trends from geography, industry and service line perspectives ► Market Tutorials, best practices, data “nuggets” and “in the trenches” viewpoints ► Premium toolkits to help expertly manage your sourcing projects New Concierge Inquiry Service Custom Research ► On the Fly’ Inquiry ► You work with ISG experts to design a We poll our consultants for their expertise research project that gives you the precise ► Detailed Inquiry information you need. We mine our databases for specific answers ► We execute and deliver to your unique TPI IndexTM Compass Benchmarks specifications. Contracts KnowledgebaseTM DynamicRFITM ► Direct Access Connect with a functional domain expert
AccessISG™ Sourcing Portal On-demand information, instruction and tools that enable smart sourcing decisions Features ISG thought leadership and proprietary data and toolsets Creates a sourcing marketplace where buyers and service providers can interact
Questions? Contact Us Debora Card Stanton Jones Partner, Research and Subscriptions, ISG Analyst, Emerging Technology, ISG Tel: 586-677-6351 Tel: 281-795-2636 firstname.lastname@example.org email@example.com www.linkedin.com/in/Debcard www.linkedin.com/in/stantonjones https://twitter.com/stantonmjones www.isg-one.com www.isg-one.com Dan Goodstein Vice President, The Outsourcing Institute Tel: 516-279-6850 x717 firstname.lastname@example.org www.linkedin.com/in/danielgoodstein 19
Thank you for joining Minefield? Or Greenfield? Mid-Tier Sourcing Strategies for Buyers and Providers Dan Goodstein Stanton Jones Debora Card Vice President Analyst, Emerging Technology Partner , Research and SubscriptionsThe Outsourcing Institute ISG ISG This webinar was sponsored by the Wall Street Tech Conference & Exhibition in conjunction with The Outsourcing Institute.