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DePaul University – School of CTI IS 371 Introduction to I.T. System Management

DePaul University – School of CTI IS 371 Introduction to I.T. System Management Application Outsourcing Dave Galen 24 th February 2009. Today’s Discussion. Who is Accenture? What outsourcing trends are reshaping IT and business process delivery models? IT Outsourcing:

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DePaul University – School of CTI IS 371 Introduction to I.T. System Management

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  1. DePaul University – School of CTI IS 371 Introduction to I.T. System Management Application Outsourcing Dave Galen 24th February 2009

  2. Today’s Discussion • Who is Accenture? • What outsourcing trends are reshaping IT and business process delivery models? • IT Outsourcing: • What is Application Outsourcing? • What is Business Process Outsourcing? • Group Discussion • Questions

  3. Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses. FACTS & FIGURES, WHAT WE DO, SERVICES WE OFFER • We help clients: • Identify and enter new markets. • Increase revenues in existing markets. • Improve operational performance. • Deliver their products and services more effectively and efficiently. • ACCENTURE GLOBAL: • Net Revenues: US$ 23.4 billion for fiscal 2008 (12 mos. ended Aug. 31, 2008) • Exchange/Ticker: NYSE/ACN • Employees: More than 186,000 (including approximately 5,000 senior executives) • Global Reach: More than 200 offices in 52 countries • Geographic Regions: • Americas • Asia Pacific • Europe/Middle East/Africa • Services we offer include: • Business consulting. • Systems integration. • Application outsourcing. • IT infrastructure outsourcing. • Business process outsourcing. • Accenture serves approximately 2,500 clients that span the full range of industries around the world. • We serve 96 of the Fortune Global 100, three-quarters of the Fortune Global 500. • Of our top 100 clients in fiscal 2008, based on revenue, all 99 have been clients for at least five years and 87 have been clients for at least 10 years.

  4. Accenture delivers its services and solutions through five operating groups… ACCENTURE ORGANIZATION MODEL Comm. & High Tech FinancialServices Public Service Products Resources • Communications • Electronics & High Tech • Media & Entertainment • Banking • Capital Markets • Insurance • Serving sectors: • Defense • Postal • Education • Revenue • Human Services • Immigration • Justice/Security • Election Services • Automotive • Health Services • Industrial Equipment • Pharmaceuticals & Medical Products • Retail & Consumer • Transportation & Travel Services • Chemicals • Energy • Forest Products • Metals & Mining • Utilities This industry focus provides Accenture’s professionals with a thorough understanding of industry evolution, business issues and applicable technologies, enabling Accenture to deliver solutions tailored to each client's industry. Business Consulting Technology & Systems Integration Outsourcing & BPO Businesses

  5. Outsourcing Trends

  6. The parachute analogy What are the client’s (for example, the military) top 3 buyer values when buying parachutes? Which one is MOST important? Why?

  7. What are the benefits to outsourcing? Top 10 Reasons Companies Outsource (2005) Reduce and Control Operating Costs 17% Improve Company Focus 16% Gain Access to World-Class Capabilities 12% Free Resources for Other Purposes 12% Resources Not Available Internally 8% Reduce Time to Market 6% Take Advantage of Off-Shore Capabilities 6% Accelerate Reengineering Benefits 4% Share Risks 3% Function Difficult to Manage or Out of Control 3% 0% 5% 10% 15% 20% Note: Data is based on 1,410 new members surveyed by The Outsourcing Institute. Source: Outsourcing Institute, Eighth Annual Outsourcing Index, Vol. 3 No. 4, Winter 2005.

  8. More CIOs are Turning to Outsourcing to Stay Competitive Analysts predict the Application Outsourcing market will continue to have broad uptake and high growth. Relative Market Adoption Annual Market Growth 10-12% Infrastructure Outsourcing 9-11% 5-8% Application Outsourcing Business Process Outsourcing Application Outsourcing Business Process Outsourcing Infrastructure Outsourcing

  9. Why Outsourcing? Why Now? Gain Greater Management Control and Flexibility Lower Total Cost of Ownership Increase Value from Application Investments Improve Application Performance

  10. What is your Current View on a Sourcing Solution? Degree of Comfort with a Sense of Loss of Control Fully leveraged model Status Quo Outsource Onshore Outsource Offshore Co-Source Insource Onshore Staff Augmentation Offshore Staff Augmentation Sliding position indicates current client mindset

  11. What are the perceived barriers to outsourcing? (READ AS AREAS OF RISK!!!) Uncertain geopolitical conditions require buyers to think more strategically and weigh risk versus reward when choosing how and where work is performed. Geopolitical Concerns Employers more candid with employees re: outsourcing endeavors; Finding new, higher-value roles for employees who would have been displaced Employee Backlash Fear about negative customer reaction and publicity continues to keep buyers from publicly discussing outsourcing endeavors; potentially increases tendency for employee backlash Customer Reaction Negative Publicity Tends to be more of a concern on the provider-side due to pending/recently passed state and local legislation in the US that prohibits outsourcing activities under certain conditions Legislation A sound human capital management strategy is required in order to control costs and mitigate morale issues Severance Costs Areas of Minimal Concern Few buyers are worried about competitor criticism (because everyone is doing it), union pressures (because most IT jobs are non-unionized) and market reaction (because it can be a financially sound decision). Few buyers expressed concerns about political pressure, though this will likely increase as a concern with the approach of the U.S. Presidential campaign in 2008. Political Pressure Market Reaction Union Pressure Competitor Criticism Low Level of Concern 2005 2006 High Diamondcluster. 2006 Global ITO Study.

  12. Application Outsourcing

  13. Companies are Bundling Outsourcing Services to Gain Additional Benefits Bundled Solutions Finance Services HR Services Procurement Services Learning Services Customer Contact Services Enterprise Data Management Services Industry Specific Services Today’s Topics Application Services Infrastructure Services

  14. Let’s Go On a Cruise!!

  15. Accenture’s Application Outsourcing Approach “Casinos & Lounges” “Engine Room”

  16. Global Delivery Center Network – Onshore, Nearshore, and Offshore – The “Where” • Core network with 50,000+ people • Deep Client Knowledge, Industry & Platform Skills • Certification – (e.g., India -- CMM Level 5, ISO9001, eSCM, COPC, BS7799, SAS70; Manila -- CMM Level 5, ISO9001, eSCM, COPC) • SLA and metrics-based approach • Extensive range of skills and capabilities • 24x7 development and maintenance • Strong technology alliances • Onshore / offshore delivery expertise since 1985

  17. Questions?

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