outtasking - outsourcing - multisourcing versus core - business or how to walk the boardeline prok....

Outtasking - Outsourcing - Multisourcing

versus core - business

or how to walk the boardeline

Prok. Adolf Gerhard FORMANEKRaiffeisen Informatik GmbH

Prok. Adolf Formanek/Head of Business Development/25.04.07

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More than 35 years experience in IT-Sevices

2006: 435 Mio. € turnover, ca. 900 employees


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2nd largest IT-Supplier in Austria

(Source: IDC-Research 2005: IDC Market Analysis, Austria IT Services Forecast 2006-2010 & 2005 Vendor Shares)


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TheThe Austrian IT-Supplier Austrian IT-Supplier

Constantinus AWARD 2004Errichtung des Zentralsystems

LKW-Maut

MERCUR 2004Errichtung des Zentralsystems

LKW-Maut

Open Source Best Practice Award 2004Serviceorientiertes Framework für

Java-basiertes Portal

Awards

IT Operations

Outsourcing

Security Services

Software Solutions

Output Services

Client Management

Competences


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IT Services marketTurnover 2005

Others7% Customizing

Total14%Systems

Integration Total19%

Outsourcing Total36%Support & Deploy

Total24%

Quelle: IDC, IT-Services Forecast 2006-2010 and 2005

Vendor Shares

Turnover 2004

Forecast increase outsourcing market 2007: 5,0%

+ 0,7%

In Mio. USD

Others7%

Support and Deploy Total

24%

Outsourcing Total37%

Systems Integration Total

19%

Customizing Total13%

3.222 Mio USD 3.263 Mio USD + 1,3%


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21.924

453

27.518

491

34.398

951

41.966

1171

47.346

1277

50.664

1389

0

10.000

20.000

30.000

40.000

50.000

2001 2002 2003 2004 2005 2006

Europe

Austria

Source: Gartner Group, IDC

in Mio. US Dollar

Outsourcing: Upward trend in IT


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Trends in IT Outsourcing

Selective Outsourcing

Datacenter:Outtasking of perts of IT e.g. Server Management, Storage Management

User-Service:Operation of user-service center as Shared Service Center

Communications:Service Provider goes eBusiness- Partner

Complete Outsourcing

Service enterprises for homogeneous enterprises

of the same branch

Joint ventures for partners

with strategic alliances

Separated IT departments (preliminary stage: Profit

centre)


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Driving factors

whywhyOutsourcing ?Outsourcing ?

Tra

nsp

aren

cyT

ran

spar

ency

Cost pressure

Cost pressure Focus on core

Focus on core

business

business

Challenges Challenges in ITin IT--SecuritySecurity(ISO 17799)(ISO 17799)

Challenges in Challenges in IT-Risk IT-Risk

management management ((SAS 70, SysTrust)SAS 70, SysTrust)

Economy of Economy of scalesscales

Flexibility in Flexibility in change change mangament mangament processesprocesses


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Source: IDC, "Worldwide Outsourcing Market Forecast and Analysis, 1999-2004", 2000, Seite 11

IT Outsourcing encloses typically "Datacenter operations" and two or more areas.

LAN/WAN LAN/WAN managementmanagement

Application Application developementdevelopement

& & maintenancemaintenance

Help desk

support

IT Security-Services

Internet & & eCommerce

services

Desktop management

Datacentermanagement

Typical areas for IT Outsourcing


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est Strategic benefitTactical benefit

Costreduction

Cost differentiator

Capital emission Improved Service Levels

Focus on core competences

Business transformation

Access to new technologies and functions

Flexibility in reorganising processes

Source: IDC, Gartner Dataquest, EDS, Accenture

Core-Core-competencescompetences

Core-Core-competencescompetences

Customers expectations


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Reasons for outsourcing

TECHNOLOGYTECHNOLOGY

FINANCEFINANCE PERSONELPERSONEL

MANAGEMENTMANAGEMENT

Concentration on core business Optimizing of ressources Increase of quality and speed Increase of flexibilty More visible planning Corporate Governance

Know-how (Technology and personel) State of art-technology without

investments Flexibiliy in capacity Transfer of risks Increase of IT-Security

Costcutting by economy of scales Change of fixed costs in variable costs Improvement of planning and cost

transparency Redirect of budgets to the core business

Reduction of dependency of from various employees

Reduction of headcounts Defusing personnel procurement Discharge of internal IT Prevention of future shortage of qualified

personel

Principal question: How, by whom and

where should IT-task bee done?


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Quelle: Gartner

The road to success

1. Start at the end

2. Think long term

3. Know the game

4. Be honest about the cost

5. Go faster

6. Expect the unexpected

7. Stay on the track


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Successful examples for Outsourcing 240 serverlocations 12 CTI-Serversystems and 250 CTI-Serveruser 10.000 Clients 160 Call-systems for telephony 14 000 managed components 315 serviced LAN-locations

217 Call-systems for telephony(A, D, Benelux, CH) 8000 Ports

300 Distribution offices 207 CPUs and 70 Servers 260 000 Contracts 5,5 TB Online data 80 TB archiv


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1. Start at the end1. Start at the end

1 2 3 4 5 6 7

Clear budget defaultClear budget default

Highest availabilityHighest availability

7 x 24 operations7 x 24 operations

Highest secured dataHighest secured data

SLA: Observance by both partnerSLA: Observance by both partner

Messurable cost-reduction – Keeping price/port

Messurable cost-reduction – Keeping price/port

Standardised extension-conceptStandardised extension-concept

RessourcepoolingRessourcepooling

Which new opportunities are offerd by outsourcing?

Which new opportunities are offerd by outsourcing?

Amount of cost-reduction?Amount of cost-reduction?

How it will be controlled?How it will be controlled?

How to messure success?How to messure success?

How to solve problems?How to solve problems?

Which relationship to the outsourcer?

Which relationship to the outsourcer?

ExpectationsExpectations


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2. Think Longterm2. Think Longterm

StabilityStability

Modernising of infrastructureModernising of infrastructure

New BusinessmodellsNew Businessmodells

Reduzing operational costsReduzing operational costs

Increasing customer satisfactionIncreasing customer satisfaction

1 2 3 4 5 6 7

Raiffeisen Informatik – 35 years of IT-experience

Raiffeisen Informatik – 35 years of IT-experience

Stability & continuity in employees & finance

Stability & continuity in employees & finance

Solide basisSolide basis

Same cultural areaSame cultural area

Longterm strategic partnership for operating the IT-infrastructure

Longterm strategic partnership for operating the IT-infrastructure

Sphere pertaining to labour lawSphere pertaining to labour law

Longterm perspectivesLongterm perspectives


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3. Know the game3. Know the game

Longtirm relayabilityLongtirm relayability

Appraisal of dimensonsAppraisal of dimensons

Knowing customers processesKnowing customers processes

Expertised knowledgeExpertised knowledge

How to strat an outsourcing process?

How to strat an outsourcing process?

Which departments should be involved?

Which departments should be involved?

Discharging the principalDischarging the principal

1 2 3 4 5 6 7

Succesful projects managedSuccesful projects managed

Success-storysSuccess-storys

Awareness about the dimensionsAwareness about the dimensions

Knowledge in structure and requirements

Knowledge in structure and requirements

RaiffeisenRaiffeisen

NextiraOneNextiraOne

Telekom AustriaTelekom Austria

StrabagStrabag

UNIQAUNIQA

Experience in outsourcingExperience in outsourcing


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4. Be honest about the cost4. Be honest about the cost

Open discussions Open discussions

Expectations clear defineExpectations clear define

Common identified basisCommon identified basis

Clear defined follow up costsClear defined follow up costs

Honesty promotes long-lastingeffects on succesful collaboration

Honesty promotes long-lastingeffects on succesful collaboration

Savingspotential:Savingspotential:

Integration in RI processesIntegration in RI processes

Increase in efficiencyIncrease in efficiency

Postconsideration of pricesPostconsideration of prices

Release of ressourcesRelease of ressources

Costs on demand and useCosts on demand and use

Reduction of componentsReduction of components

ComponentpoolingComponentpooling

Optimising hardwareOptimising hardware

1 2 3 4 5 6 7

Expectations in costsExpectations in costs


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Contract preparation phase Set Up Phase

5. Go Faster5. Go Faster

1 2 3 4 5 6 7

SpeedSpeed


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6. Expect the unexpected6. Expect the unexpected

1 2 3 4 5 6 7

New demands ocurringNew demands ocurring

Unexpected AccidentsUnexpected Accidents

How to deal with change requests:How to deal with change requests:

Flexibility in realisationFlexibility in realisation

Adaptation of the contractAdaptation of the contract

Vagely defined new requestsVagely defined new requests

TrustTrust

Accept new challengesAccept new challenges

Immediate acting and reactingImmediate acting and reacting

OncomingOncoming

Legally fitting of contractLegally fitting of contract

Post- and preconsiderationsPost- and preconsiderations

Clear fixed and documentedClear fixed and documented

The unexpected The unexpected


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7. Stay on the track7. Stay on the track

1 2 3 4 5 6 7

Mechanisme of monitoringMechanisme of monitoring

Still on track?Still on track?

Which impact on costs?Which impact on costs?

How solid is relationship?How solid is relationship?

Can we meet expectations?Can we meet expectations?

Corebusiness:Corebusiness:

Support or inhibition?Support or inhibition?

Defined process of escalationDefined process of escalation

Service managementService management

Outsourcing manager, Outsourcing coordinator

Outsourcing manager, Outsourcing coordinator

Definition of requestsDefinition of requests

SLA´sSLA´s

Monthly reviewMonthly review

How to deal with divergences?How to deal with divergences?

Central documentation Central documentation

Steering and monitoringSteering and monitoring


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And how can one find the boarderline???

Multisourcing is a virtual construction

The more you integrat customers processes in supplier‘s processes the more reach multisourcing

You have to understand the entire process-chain on customer‘s side

Forget box-shifting!!

Integrate customer‘s IT including HW & HR for real cost-cutting

Make customer‘s IT-demands to your tasks and you‘ll help him concentrating an his core business

Thank you for your interest!!

Please feel free to contact us for further

informations!

Adolf Gerhard Formanek

Head of Business Development/Holder of Procurement

A-1020 Vienna Lilienbrunng. 7-9

Phone: +43/1/99399/1150 Mobile: +43/6644230947 e-mail: [email protected]

outtasking - outsourcing - multisourcing versus core - business or how to walk the boardeline prok....

Documents

core business

mio usd3

idc market analysis

service provider

outtasking outsourcing

idcin mio

core businessreduction

storage managementuserservice