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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