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Effective Outsourcing Strategies: Insights from Industry Leaders

Explore the key trends and insights from 2002’s Canadian outsourcing market, featuring expert analysis from George J. Atis and Dan McLean. This comprehensive review covers client and vendor methodologies, market drivers, and inhibitors of outsourcing. Key contracts from major companies illustrate the strong growth in outsourcing, while discussions highlight benefits, control retention, and essential considerations for successful outsourcing. Stay informed on the evolving IT landscape and prepare for the future of outsourcing.

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Effective Outsourcing Strategies: Insights from Industry Leaders

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  1. Effective Outsourcing Strategies Featured guests: George J. Atis Dan McLean

  2. Slide Menu • 2002: A year in review • The Outsourcing Topology • IDC Survey data • Client-side methodology • Vendor-side methodology • Contacts

  3. 2002 – A Year in Review • Canadian outsourcing market was strong in 2002 • Many Canadian contracts appeared: • $2.2B Canada Post and CGI • $1.3B CIBC and HP Services (but doesn’t really count) • $700M Bombardier and CSC • $660M OPG and CGE&Y • $535M Manulife Financial and IBM GS • $250M Sun Life and IBM GS • $200M Desjardins Group and CGI • $200M Alcan and CGI • $160M Stelco and EDS Typically five- to 10-year contracts

  4. Drivers Inhibitors Increase Efficiencies Too risky, too uncertain Network and Desktop Operations Data Centre Outsourcing Keep up With Rapidly Advancing Technology Can’t bring IT back in-house - if I want Call Centre Help Desk Processing Services Ecommerce Refocus Critical Resources Complexity: what to outsource Business Process Applications Outsourcing Application Development Reduce or Stabilize Costs Losing control The Outsourcing Topology

  5. Activities Currently Outsourced N=100; Q16. Which of the following activities do you currently outsource? Source: IDC Canada, 2002

  6. Determining Factor in Organizations’ Decision to Outsource Activities N=100; Q18. What event ultimately prompted – or would prove to be the determining factor – in your organization’s decision to outsource an activity? Source: IDC Canada, 2002

  7. Benefits derived from outsourcing – a match N=177; A04. What do you perceive are the top 2 benefits/value derived from outsourcing? Source: IDC Canada, 2003

  8. If Outsourcing, Organization Prefers to Retain Control Over… N=177; A07. If or when considering to outsource an aspect of your business, what ONE aspect of control of your outsourcing arrangement do you prefer to retain? Source: IDC Canada, 2003

  9. Thoughts • If a customer does not have a clear understanding of IT costs, then they should not outsource. • Is there a trend towards dealing with advisors and brokers? Would they be helpful to you? • General rule in outsourcing is have an exit strategy: • Are you equipped to take over when the contract expires • Be vigilant in measuring performance and value • What’s in store for IT service providers in 2003? • Are telcos still targeting IT services? There’s evidence to suggest some are looking to retrench into familiar territory. Bell, Aliant, Telus. • Consultants also want to be outsourcers – Accenture, CGI, Bearing Point • One-stop shops

  10. Contacts George J. Atis George.Atis@mcmillanbinch.com Partner; Chair of the Outsourcing Practice Group McMillan Binch LLP Dan McLean dmclean@idc.com Director, Outsourcing & IT Utility Services Research IDC Canada John Pickett jpickett@itworldcanada.com VP; Editor-in-chief, IT World Canada Inc. Mark your calendars: Toronto, May 5, 2003 Info and registration at: www.itworldcanada.com/events

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