This document discusses outsourcing, offshore outsourcing, and IS suppliers. It provides an overview of why companies outsource IT functions like reducing costs and risks. While outsourcing can help lower costs, there are also transition costs involved and companies still face strategic, operational, and other risks. Offshoring moves some operations overseas for additional cost savings, with locations like India initially popular but the landscape is now more complex. Case studies examine outsourcing arrangements between companies and how suppliers provide services using an optimal mix of onshore, nearshore and offshore resources.
Prudent enterprises are reviewing and optimizing their IT resources and practices to maintain a
competitive edge in today's global economy. The current economic climate has accelerated the
underlying structural shifts in IT usage and delivery models, driving IT purchasing decisions to be
critically evaluated at multiple levels and CFOs to emphasize the decapitalizing of IT. It is, therefore, little wonder that the majority of organizations are looking at total cost of ownership (TCO) as one of the metrics to ascertain the impact of any IT investment on their overall financial bottomline. TCO is a measurement of the total life-cycle costs of an IT investment, including acquisition, implementation, management and retirement. This IDC Analyst Connection takes a closer look at the key parameters in establishing the appropriate financial objectives in an organization's decision-making framework. The document also explains why CIOs should stop focusing on the initial capex costs and pay greater attention to the more significant life-cycle costs to operate, manage and run a particular technology. Other indirect costs like user productivity and soft issues like ease of use are also key factors to consider when determining the TCO of operating systems.
Managing the the Technical Debt lifecycle. In this presentation we explore the evolution of the metaphor, the value it brings to organizations and challenges to successful adoption.
The full audio and video can be viewed at http://blog.acrowire.com/td-webinar.
In this webinar, Steve Hall, author of "Managing Global Development Risk,” discusses the challenge of aligning vendor SLAs with long term business value. Steve discusses how you can build healthier and transparent relationships between vendors and customers by incorporating application structural quality measurement and practical, meaningful metrics to mitigate risk. You’ll learn how you can avoid vendor lock-in, improve production support activities and align metrics between vendors and project managers.
To view the webinar, visit http://www.castsoftware.com/news-events/event/vendor-management?gad=ss
Prudent enterprises are reviewing and optimizing their IT resources and practices to maintain a
competitive edge in today's global economy. The current economic climate has accelerated the
underlying structural shifts in IT usage and delivery models, driving IT purchasing decisions to be
critically evaluated at multiple levels and CFOs to emphasize the decapitalizing of IT. It is, therefore, little wonder that the majority of organizations are looking at total cost of ownership (TCO) as one of the metrics to ascertain the impact of any IT investment on their overall financial bottomline. TCO is a measurement of the total life-cycle costs of an IT investment, including acquisition, implementation, management and retirement. This IDC Analyst Connection takes a closer look at the key parameters in establishing the appropriate financial objectives in an organization's decision-making framework. The document also explains why CIOs should stop focusing on the initial capex costs and pay greater attention to the more significant life-cycle costs to operate, manage and run a particular technology. Other indirect costs like user productivity and soft issues like ease of use are also key factors to consider when determining the TCO of operating systems.
Managing the the Technical Debt lifecycle. In this presentation we explore the evolution of the metaphor, the value it brings to organizations and challenges to successful adoption.
The full audio and video can be viewed at http://blog.acrowire.com/td-webinar.
In this webinar, Steve Hall, author of "Managing Global Development Risk,” discusses the challenge of aligning vendor SLAs with long term business value. Steve discusses how you can build healthier and transparent relationships between vendors and customers by incorporating application structural quality measurement and practical, meaningful metrics to mitigate risk. You’ll learn how you can avoid vendor lock-in, improve production support activities and align metrics between vendors and project managers.
To view the webinar, visit http://www.castsoftware.com/news-events/event/vendor-management?gad=ss
Will They Blend? - Agile, TOGAF and Enterprise ArchitectureITpreneurs
Do you offer TOGAF / EA / Agile training or consulting?
Is TOGAF really the best approach for enterprise architecture? Danny Greefhorst will provide insight into these questions by showing how agile, enterprise architecture and TOGAF relate and overlap.
Content by Danny Greefhorst
What's covered:
- The TOGAF Approach to EA
- Do Agile, EA and TOGAF Relate?
- Do Agile, EA and TOGAF Overlap?
- When to Use Which Framework
- How to Generate More Business by using Agile, EA and TOGAF
The above article was published in the May 2008 edition of FEDTECH Magazine. It summarizes the key priorities of Federal CIOs as captured in the Information Technology Association of America's (now Tech Amercia) Survey of Federal CIOs, dated February 2008, entitled "Transforming IT to Support the Mission." The article is one in the series I write entitled "The Business of IT."
This independent survey was commissioned by
Savvis and conducted with 550 CIOs, IT Directors,
Heads of IT and Senior IT Managers of global large
enterprises based in the USA (200), UK (100),
Germany (100), Japan (50), Hong Kong (50) and
Singapore (50), and was completed in August
2012. The research was conducted by Vanson
Bourne, a research based technology marketing
consultancy offering clients analysis and advice
based on incisive, rigorous research into their
market environment. The research used a
combination of online fieldwork methodology and
telephone interviewing. All research carried out by
Vanson Bourne adheres to the latest MRS Code
of Conduct. Demographic detailing respondent
communities includes industry sector, country
in which the respondents were based, and size
of business.
In today's economy there is a driving need to cut costs. Yet the uncertain and changing environment makes business agility more critical than ever. To successfully address both these challenges companies must reduce maintenance costs and lead times for their existing mainframe systems and core application portfolio. They need to find ways to renovate the right pieces of their existing applications. Minimizing risk by retaining the majority of the code, yet reducing maintenance costs and improving agility by modernizing critical components. Service-Oriented Architectures deliver the framework to successfully transform core IT assets, and companies are rightfully embracing the approach. But more is needed.
This presentation covers applying Decision Management, SOA and Business Rules Management Systems to renovate your existing applications. Used together these approaches dramatically reduce maintenance costs and increasing business agility. You will see how to use the techniques and technologies to identify critical components, externalize them and make them easier and cheaper to manage and change. Illustrated with real customer stories, this webinar will show you how to increase agility and reduce costs.
IBM Rational Software Conference 2009: Modeling, Architecture & Construction ...Kathy (Kat) Mandelstein
Track Keynote for the Modeling, Architecture & Construction Track at the IBM Rational Software Conference 2009
Software development is a business process requiring many different talents to implement effectively. The software architect and the software developer are key roles for successful software delivery. The architect is responsible for turning requirements into analysis and design models built on a sound architecture. Software architecture is crucial for designing reliable, flexible, and maintainable software systems, and helps communicate the high-level design to the various stakeholders at a level of detail that is meaningful to them. It also allows developers to create software systems that enable reuse and integration with legacy and third-party systems. Developers create the reality of the architecture ideas and models through building, modernizing, extending, integrating, and deploying software. Sessions in this track explore the benefits of a well-architected system, present the tips and techniques of organizations that have made software architecture an important part of their software delivery process, and show how both visual and code-centric development can help organizations adopt the right paradigm for their particular development needs. This track is for architects and developers interested in best practices and the latest innovations in methodology and tools for supporting architectural design, discovery, and control, and software construction and assembly.
Track Keynote for the Enterprise Architecture Management Track at the IBM Rational Software Conference 2009
Today's organizations need to make faster, better-informed decisions in order to seize business opportunities. Enterprise Architecture (EA) delivers enterprise blueprints for change and transformation, with visibility across strategy, business architecture, IT architecture and technology. Further, EA helps organizations prioritize IT investments to support business goals in order to maximize the business value from IT investments by installing a powerful communication and collaboration platform between business and IT stakeholders. Organizations that practice EA report more effective decision-making, improved business and IT alignment, IT cost savings, better insight during organizational transformations, and improved time-to-value of in their IT investments. EA also improves the success of IT Governance, SOA and Business Process Management (BPM) initiatives.
This track focuses on the management aspects of EA and therefore balances two areas of concern: Building an EA, and using an EA. Building the EA applies modeling notations, processes, methodologies, and tools surrounding various forms of business and solution architecture, addressing both current and future states. Using the EA addresses how those activities and associated artifacts are linked to solution requirements, software development, and application deployment processes. By addressing both building and using concerns, participants learn how to makes EA more actionable -- integrating strategy and solution delivery -- thereby improving time-to-value for affecting transformation and overall business results.
Participants who will find the greatest value from this track include: Business LOB Executives, IT Executives, Business Strategists, Enterprise Architects, Business Architects and Business Analysts. This track will also benefit IT Architects, Solution Architects, Software Architects, Data Architects and Project managers who are interested in best practices, real-world experiences, and the latest innovations in enhancing organizational agility and the communication and collaboration between business and IT.
Liam Friedland and Jon Innes popularized the concept of user experience strategy starting in 2003. These slides are from their workshop which has been attended by hundreds of professionals in three continents at major UX related conferences.
This is the shorter talk version of Repositioning User Experience. This version contains some updated content. It was used by Jon Innes in talks at eBig, CHIFOO, and User Friendly in 2007.
Will They Blend? - Agile, TOGAF and Enterprise ArchitectureITpreneurs
Do you offer TOGAF / EA / Agile training or consulting?
Is TOGAF really the best approach for enterprise architecture? Danny Greefhorst will provide insight into these questions by showing how agile, enterprise architecture and TOGAF relate and overlap.
Content by Danny Greefhorst
What's covered:
- The TOGAF Approach to EA
- Do Agile, EA and TOGAF Relate?
- Do Agile, EA and TOGAF Overlap?
- When to Use Which Framework
- How to Generate More Business by using Agile, EA and TOGAF
The above article was published in the May 2008 edition of FEDTECH Magazine. It summarizes the key priorities of Federal CIOs as captured in the Information Technology Association of America's (now Tech Amercia) Survey of Federal CIOs, dated February 2008, entitled "Transforming IT to Support the Mission." The article is one in the series I write entitled "The Business of IT."
This independent survey was commissioned by
Savvis and conducted with 550 CIOs, IT Directors,
Heads of IT and Senior IT Managers of global large
enterprises based in the USA (200), UK (100),
Germany (100), Japan (50), Hong Kong (50) and
Singapore (50), and was completed in August
2012. The research was conducted by Vanson
Bourne, a research based technology marketing
consultancy offering clients analysis and advice
based on incisive, rigorous research into their
market environment. The research used a
combination of online fieldwork methodology and
telephone interviewing. All research carried out by
Vanson Bourne adheres to the latest MRS Code
of Conduct. Demographic detailing respondent
communities includes industry sector, country
in which the respondents were based, and size
of business.
In today's economy there is a driving need to cut costs. Yet the uncertain and changing environment makes business agility more critical than ever. To successfully address both these challenges companies must reduce maintenance costs and lead times for their existing mainframe systems and core application portfolio. They need to find ways to renovate the right pieces of their existing applications. Minimizing risk by retaining the majority of the code, yet reducing maintenance costs and improving agility by modernizing critical components. Service-Oriented Architectures deliver the framework to successfully transform core IT assets, and companies are rightfully embracing the approach. But more is needed.
This presentation covers applying Decision Management, SOA and Business Rules Management Systems to renovate your existing applications. Used together these approaches dramatically reduce maintenance costs and increasing business agility. You will see how to use the techniques and technologies to identify critical components, externalize them and make them easier and cheaper to manage and change. Illustrated with real customer stories, this webinar will show you how to increase agility and reduce costs.
IBM Rational Software Conference 2009: Modeling, Architecture & Construction ...Kathy (Kat) Mandelstein
Track Keynote for the Modeling, Architecture & Construction Track at the IBM Rational Software Conference 2009
Software development is a business process requiring many different talents to implement effectively. The software architect and the software developer are key roles for successful software delivery. The architect is responsible for turning requirements into analysis and design models built on a sound architecture. Software architecture is crucial for designing reliable, flexible, and maintainable software systems, and helps communicate the high-level design to the various stakeholders at a level of detail that is meaningful to them. It also allows developers to create software systems that enable reuse and integration with legacy and third-party systems. Developers create the reality of the architecture ideas and models through building, modernizing, extending, integrating, and deploying software. Sessions in this track explore the benefits of a well-architected system, present the tips and techniques of organizations that have made software architecture an important part of their software delivery process, and show how both visual and code-centric development can help organizations adopt the right paradigm for their particular development needs. This track is for architects and developers interested in best practices and the latest innovations in methodology and tools for supporting architectural design, discovery, and control, and software construction and assembly.
Track Keynote for the Enterprise Architecture Management Track at the IBM Rational Software Conference 2009
Today's organizations need to make faster, better-informed decisions in order to seize business opportunities. Enterprise Architecture (EA) delivers enterprise blueprints for change and transformation, with visibility across strategy, business architecture, IT architecture and technology. Further, EA helps organizations prioritize IT investments to support business goals in order to maximize the business value from IT investments by installing a powerful communication and collaboration platform between business and IT stakeholders. Organizations that practice EA report more effective decision-making, improved business and IT alignment, IT cost savings, better insight during organizational transformations, and improved time-to-value of in their IT investments. EA also improves the success of IT Governance, SOA and Business Process Management (BPM) initiatives.
This track focuses on the management aspects of EA and therefore balances two areas of concern: Building an EA, and using an EA. Building the EA applies modeling notations, processes, methodologies, and tools surrounding various forms of business and solution architecture, addressing both current and future states. Using the EA addresses how those activities and associated artifacts are linked to solution requirements, software development, and application deployment processes. By addressing both building and using concerns, participants learn how to makes EA more actionable -- integrating strategy and solution delivery -- thereby improving time-to-value for affecting transformation and overall business results.
Participants who will find the greatest value from this track include: Business LOB Executives, IT Executives, Business Strategists, Enterprise Architects, Business Architects and Business Analysts. This track will also benefit IT Architects, Solution Architects, Software Architects, Data Architects and Project managers who are interested in best practices, real-world experiences, and the latest innovations in enhancing organizational agility and the communication and collaboration between business and IT.
Liam Friedland and Jon Innes popularized the concept of user experience strategy starting in 2003. These slides are from their workshop which has been attended by hundreds of professionals in three continents at major UX related conferences.
This is the shorter talk version of Repositioning User Experience. This version contains some updated content. It was used by Jon Innes in talks at eBig, CHIFOO, and User Friendly in 2007.
Transform Your Application Portfolio - and Keep Your Focus!Software AG
Application Portfolio Management is a discipline used to justify and measure the business value of each application in comparison to the cost of maintenance and operations. But Enterprise Architecture Management http://www.softwareag.com/corporate/products/aris_platform/aris_design/business_architect/capabilities/default.asp also plays an important role in solving this challenge. How do these two disciplines fit together? Is Application Portfolio Management a pure IT-related topic? Find out how Software AG’s ARIS Enterprise Architecture Management solution provides the methodology, the tools and best practice to answer these questions. To watch the full video, visit the Software AG resource center http://www.softwareag.com/corporate/rc/rc_perma.asp?id=tcm:16-105334.
We studied successful private and hybrid cloud projects at over 150 companies in order to uncover their secrets of success. By looking at what worked at other organizations, you can answer questions that help you get your cloud project right the 1st time.
What are typical pre-requisites for a successful effort? What are critical dependencies during your project? What solution capabilities fit common use cases? Where should you focus your POC efforts? What are common friction points to avoid? What are typical results?
Attend this session to cut through the cloud clutter and learn from other top-performing IT organizations. This isn't a marketing gimmick or sales pitch. This is real research based on rigorous analysis of hard data from a broad range of companies like yours.
More and more companies are closely examining IT operations, and IT leaders are constantly under pressure to provide more service with less. Research shows that corporate IT spend as a percentage of revenue ranges from 3.46% to 0.89%, and industry analysts predict IT departments will face 5-10% budget reductions in the coming fiscal year. What can be done to alleviate some of these pressures?
When companies are able to align IT costs to business objectives, it significantly increases the strategic value of the company's IT investments. Learn how IT leaders are applying Lean Six Sigma to align IT costs with overall business objectives. Compare typical approaches to IT cost reduction and the advantages/disadvantages of each and hear case studies from other companies implementing Lean Six Sigma in IT.
Learn how to get started with Lean Six Sigma in IT and how to effectively assess your current IT operations.
SilverStorm "Credibility and Collaboration to achieve excellence in IT Govern...SilverStormSolutions
"Credibility and Collaboration to achieve excellence in IT Governance"
So how are we at SilverStorm helping CIO´s Transform IT?
For us it´s simple, Transforming IT means raising the credibility of IT to gain the collaboration of others throughout the organization.
The first step: Increase “CREDIBILITY”.
The second step: Increase “COLLABORATION”.
Without “Credibility” there can never be “Collaboration”
We are helping our customers achieve measurable benefits by combing processes, people and technology.
Trends in the commoditisation of information technology and the need for stra...Alan McSweeney
Understand exactly what is meant by the commoditisation of information technology and define a framework for achieving optimal business benefits from appropriate exploitation of commoditisation
Andreas Pöschl, Senior Solutions Architect, BMW
Agenda
BMW Group IT
Organization
Environment
BMW Group and its private cloud
Expectations
Challenges
How ODCA usages will help
Key decisions
Implementation
Next Steps
David Rose provided an overview of the Benefits associated with Enterprise Architecture.
Presented at the first JISC Emerging Practices workshop (2012/03/29).
http://emergingpractices.jiscinvolve.org/wp/doing-ea-workshop/
Complimentary report on the current needs of CIOs BMAJCHER
Ahead of the Corporate IT Exchange 2012, we asked participants what the factors and main trends influencing their IT function are and what types of solutions providers could help them deliver on their IT and business priorities. The results are shown in an easy to digest visual presentation
Data Curation: Retooling the Existing WorkforceSteven Miller
My presentation given at the Symposium on Digital Curation in the Era of Big Data: Career Opportunities and Educational Requirements held at the National Academy of Sciences on July 19, 2012.
Similar to Isys40051 12 is suppliers & outsourcing v2 (20)
it describes the bony anatomy including the femoral head , acetabulum, labrum . also discusses the capsule , ligaments . muscle that act on the hip joint and the range of motion are outlined. factors affecting hip joint stability and weight transmission through the joint are summarized.
This presentation was provided by Steph Pollock of The American Psychological Association’s Journals Program, and Damita Snow, of The American Society of Civil Engineers (ASCE), for the initial session of NISO's 2024 Training Series "DEIA in the Scholarly Landscape." Session One: 'Setting Expectations: a DEIA Primer,' was held June 6, 2024.
This slide is special for master students (MIBS & MIFB) in UUM. Also useful for readers who are interested in the topic of contemporary Islamic banking.
Delivering Micro-Credentials in Technical and Vocational Education and TrainingAG2 Design
Explore how micro-credentials are transforming Technical and Vocational Education and Training (TVET) with this comprehensive slide deck. Discover what micro-credentials are, their importance in TVET, the advantages they offer, and the insights from industry experts. Additionally, learn about the top software applications available for creating and managing micro-credentials. This presentation also includes valuable resources and a discussion on the future of these specialised certifications.
For more detailed information on delivering micro-credentials in TVET, visit this https://tvettrainer.com/delivering-micro-credentials-in-tvet/
Executive Directors Chat Leveraging AI for Diversity, Equity, and InclusionTechSoup
Let’s explore the intersection of technology and equity in the final session of our DEI series. Discover how AI tools, like ChatGPT, can be used to support and enhance your nonprofit's DEI initiatives. Participants will gain insights into practical AI applications and get tips for leveraging technology to advance their DEI goals.
This presentation includes basic of PCOS their pathology and treatment and also Ayurveda correlation of PCOS and Ayurvedic line of treatment mentioned in classics.
Normal Labour/ Stages of Labour/ Mechanism of LabourWasim Ak
Normal labor is also termed spontaneous labor, defined as the natural physiological process through which the fetus, placenta, and membranes are expelled from the uterus through the birth canal at term (37 to 42 weeks
Strategies for Effective Upskilling is a presentation by Chinwendu Peace in a Your Skill Boost Masterclass organisation by the Excellence Foundation for South Sudan on 08th and 09th June 2024 from 1 PM to 3 PM on each day.
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...Dr. Vinod Kumar Kanvaria
Exploiting Artificial Intelligence for Empowering Researchers and Faculty,
International FDP on Fundamentals of Research in Social Sciences
at Integral University, Lucknow, 06.06.2024
By Dr. Vinod Kumar Kanvaria
Biological screening of herbal drugs: Introduction and Need for
Phyto-Pharmacological Screening, New Strategies for evaluating
Natural Products, In vitro evaluation techniques for Antioxidants, Antimicrobial and Anticancer drugs. In vivo evaluation techniques
for Anti-inflammatory, Antiulcer, Anticancer, Wound healing, Antidiabetic, Hepatoprotective, Cardio protective, Diuretics and
Antifertility, Toxicity studies as per OECD guidelines
A Strategic Approach: GenAI in EducationPeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
1. ISYS40051 – Enterprise Systems Management
Session 12 –Outsourcing, offshore & IS suppliers
Grenville Lannon
2. IS Outsourcing & managing suppliers
• So far;
– IS in a business context
– Data analytics & Business Intelligence
– Key business application groups – ERP, SCM and CRM
– Overview of IS architecture
– Development of the Internet, the Web and Web services
– Cloud Computing, mobile devices and „consumerisation‟
– Security & Open Source software
– IS investments & IS adoption
– Implementation
• This week
– Outsourcing Farhoomand, pp. 76-82
– IS suppliers
29 February 2012 2
3. ESM – Module structure
IS in context
Cloud ERP CRM
Web
services
SCM
IS solutions
Architecture
Security
Open
Mobile
Source
Invest?
Function? IS evaluation
Adoption?
Scope?
Suppliers
Projects
IS
implementation
Outsourcing
29 February 2012 3
5. What is outsourcing?
• A company contracts another company to provide a service instead
of employing staff to do it
– Cleaning
– Catering
– Transportation
– Recruitment
• Often seen as a tactic to allow the company to focus on its core
competencies
29 February 2012 5
6. Why outsource IT?
• Reduce and control operating • Share risks
costs
• Make capital funds available
• Improve company focus
• Get help to manage out of
• Gain access to world-class control functions
capabilities
• Get cash infusion
• Free internal resources for
• Get access to resources not
other purposes
available internally
• Accelerate re-engineering
benefits
Farhoomand, page 79
29 February 2012 6
7. Why outsource IT?
Risk Cost
mitigation reduction
Strategic Process
focus expertise
29 February 2012 7
8. IT Outsourcing – risk mitigation?
Either buyer or supplier
Strategic risks makes opportunistic
decisions
Increased complexity of
operations, geographic
Operational risks separation, communications
Significant issues
risks still exist
Over time, in-house
Atrophy risks expertise will be lost
Geopolitical risks, exchange
Location risks rate risks, sovereign risks
Aron, R. et al. (2005), “Just Right Outsourcing: Understanding and Managing Risk”, Journal
of Management Information Systems, Vol. 22, No. 2, pp. 37-55
29 February 2012 8
9. IT Outsourcing – cost reduction?
Phase 0 Phase 1 Phase 2
Pre-contractual Onshore transition Delivery
Search costs Specification / design costs
Contract /
negotiation Knowledge transfer costs
costs
Control costs
Coordination costs
Dibbern, J. et al. (2008) “Explaining variations in client Contract adaptation
extra costs between software projects offshored to costs
India”, MIS Quarterly, Vol. 32, No. 2, pp. 333-366
29 February 2012 9
11. IT Outsourcing – strategic focus?
Less tactical, more strategic
29 February 2012 11
12. IT Outsourcing – strategic focus?
• “IT can be considered core at the corporate level, but some of its
aspects at lower levels, might be commodities”
• Understanding what role IT has as a core competency is key.
Testing
Coding
Software Development
?
Out Bug fix
Help Desk
Business Analysis
In Project Management
IT Strategy
Governance
29 February 2012 12
14. Evolution of IT outsourcing
• In the 1980s executives were increasingly made aware of the
strategic importance of information systems
BUT
• Also increasingly made aware to focus their company on its core
competencies
• 1989 – Landmark Eastman Kodak $250million outsourcing deal with
IBM, DEC and Businessland Inc. for data centre and server
management
• 1990 – Total outsourcing market was $1.5billion
• 2008 – Total outsourcing market was $80billion
29 February 2012 14
15. IT Outsourcing – a moral dilemma?
• To whom are the managers of an organisation responsible?
– Shareholders?
– Employees?
– Customers?
– Governments?
– Suppliers?
In the UK regulations called TUPE (Transfer of Undertakings Protection of
Employment) exist to protect the rights of employees when business
operations are transferred from one company to another.
• Terms and conditions of employment are maintained
• Continuity of employment is guaranteed
• Job is transferred to the new employer
29 February 2012 15
18. Offshore
• An organisation can choose to move some of its operations
„offshore‟.
• This means having staff physically located in another
country, because having the staff in that country provides cost
advantages.
• Offshore operations can be in place either;
– As part of the organisation of the company itself
– As part of outsourcing operations to another company who
provides those services from offshore
• India was initially the dominant choice for offshore operations, but
the picture is now much more complex.
29 February 2012 18
19. Mix of investment risk, security environment, threat of disruptive events, regulatory risks, data
security, quality of infrastructure, and extent of government support (Low number is better)
29 February 2012 19
20. Case study – Shell (Customer)
Foundation – Cisco, SAP,
Oracle, Microsoft India
China
Malaysia
Infrastructure – AT&T, HP, Mexico
70% of total T-systems Poland
Total IT spend
IT spend is Romania
outsourced Kenya
Application services –
Brazil
Accenture, IBM, Logica,
Wipro
80% of that outsource goes
to 11 suppliers – who use
offshore resources
29 February 2012 20
21. Case study – Capgemini (Supplier)
• Capgemini proposed a concept called Rightshore – a mix of;
– Offshore
– Nearshore
– Onshore
• Staff based in
– USA, Canada, Mexico
– Chile, Argentina, Brazil, Guatemala
– UK, France, Spain, Netherlands, Germany, Finland, Italy, Poland
– Morocco
– Australia, China, India
• Staff provided to customer contracts based on an „optimum mix‟ of
cost, capability, language, time zone etc.
29 February 2012 21
23. Case Study – Capgemini (Supplier)
• India is still the dominant offshore resource
UK IT consultant with 5-7 years experience = £1,400 per day
Indian consultant with 5-7 years experience = £100 per day
• Bringing Indian staff into Europe for several months is still more
cost effective than local employees
29 February 2012 23
24. Offshore – a further moral dilemma?
• To whom are the managers of an organisation responsible?
– Shareholders?
– Employees?
– Customers?
– Governments?
– Suppliers?
There is evidence that organisations should recognise that establishing
offshore base (either directly or through a supplier) is more than simply a
lower transaction cost replacement for existing business processes. They
need to consider issues such as job loss, security, quality – all stakeholder
groups are sensitive to the broader issues.
Robertson, C.J. et al. (2010) “Stakeholder Perceptions of Offshoring and Outsourcing: The
Role of Embedded Issues”, Journal of Business Ethics, Vol. 95, pp. 167-189
29 February 2012 24
26. IS suppliers
• IS suppliers aim for three things
Revenue Margin Credentials
Top line sales Gross profit Can they use
(sales – your experience
direct costs) as a reference?
29 February 2012 26
27. IS suppliers
• IS suppliers will most actively manage risk
– Risk to their revenue
– Risk to their margin
– Risk to their credentials
• Good suppliers will proactively seek a regime for managing risk at
the beginning of a contract
• Common risks for IS suppliers are related to;
– Estimating
– Governance
– Scope creep
– Penalties for late delivery
– Client dependencies
29 February 2012 27
29. Summary
• IT services have been one of the dominant areas which businesses
have sought to outsource to suppliers for a number of reasons.
• Outsourcing can provide many benefits, but it is not easy and can
often be controversial.
• Offshoring can be done either within an organisation, or as part of
outsourcing to a third-party. Similarly, it is not easy and is often
controversial.
• IT suppliers – especially those providing services – will actively
manage risks associated with their revenue and margin.
29 February 2012 29
30. Seminar topic
• Read NICHOLSON, B. & SAHAY, S. (2001) “Some political and
cultural issues in the globalisation of software development: case
experience from Britain and India”, Information and
Organisation, Vol. 11, pp. 25-43
• What do you think organisations which engage in offshore software
development or IT services provision can do to reduce the impact of
political or cultural issues related to the offshore work?
– As a customer
– As a supplier
29 February 2012 30
Editor's Notes
Economic roller coaster3,4 — The global economy remains unstable. Many IT budgets will remain flat or will shrink. The demand for IT organizations to deliver sustainable business value is key to organizations' success.5Recommendations: Establish flexibility in your services and your relationships with providers, and an innovative approach to IT services sourcing. Be realistic about budgets, but don't abandon value for cost.Consumerization6 — The lines between consumers/communities, professionals and enterprises are blurring. All have a greater choice of solutions and sources and can bypass IT.Recommendations: Satisfy the demand for greater agility by implementing new channels for information and work.Globalization7 — Emerging markets represent the new frontier for supply and demand; Gartner estimates that Standard & Poor's (S&P) 500 companies will derive more than 50% of new revenue from them. Low-cost labor benefits are shrinking, creating a need for new models and approaches. Organizations can buy value, not just volume.Recommendations: Evaluate the costs and benefits associated with the development of intellectual property (IP) or increased speed to market.IT services industrialization8 — Sourcing organizations have more alternatives than ever, and industrialization represents a shift from a labor-driven customized model to an automated and standardized one. Industrialized IT service offerings will mature and increase in number, putting pressure on prices. The effect on demand and supply9 requires change, and differentiation needs to be reconsidered.Recommendations: Manage standards and hybrid models. Assess risks such as IP exposure, data security and uptime guarantees.