Version 2.0 RWP, AA 06-13-03 Selling Complex Services: BPO and ITO
LAW’s Strategic Objectives for 2003 • Outsourcing: Continue double-digit growth in BPO • Infrastructure: Drive growth in design/build/ manage secure distributed infrastructure • SI/Consulting: Continue margin improvement • Server Technology: Expand market for ES7000 • Branding: Build market awareness of Unisys • Ongoing: Maintain tight cost controls
Course Objectives • Define outsourcing from the market point of view and link the Unisys definition of Information Technology and Business Process Outsourcing (ITO/BPO) • Identify the business drivers that lead to an outsourcing opportunity • Identify the Business drivers of “C” level executives that lead to business initiatives and expanded business opportunities. • Identify the capabilities, strengths & weaknesses of an organization’s ability to change • Determine the current business performance, and the gap between the current and desired state • Identify the ITO and BPO services Unisys provides that are required for the client to achieve their performance goals and objectives • Create a executive level presentationthat restates the value Unisys provided to the client’s business
Key Learnings • You will learn about . . . • The outsourcing opportunity that exists for Unisys • The size of, and scope of a typical outsourcing sale • The account control outsourcing provides
Course Activities • Guide a sales team through three executive meetings • Complete a TAS opportunity plan • Identify the complex services a client requires to meet their business objectives • Build an outsourcing services strategy for the client • Build the sales approach for that opportunity
SCS BPO and ITO: Schedule • Day 1 (8:30-5:00) • Welcome & Module 1 • Module 2: Business Drivers • Module 3: Current Environment • Evening Reading Assignment, Module 5: Filling the Gap • Day 2 (8:30-5:00) • Module 4: Mapping Out a Sourcing Strategy • Module 5: Filling the Gap • Prepare Analyst Questions (30 mins) • Q&A with Industry Analyst (30 - 45 mins) • Module 6: Selling the Solution • Module 7: Value Tracking and Feedback
Materials • Participant’s Guide • Case Study • Simulation • Companion Text: • Strategic Outsourcing: • Exploiting the Skills of Third Parties • by Ian Benn with Jill Pearcy
Housekeeping • Phones & Pagers • Start Times • Breakout Rooms • Breaks & Lunches • Smoking Area/Rest Rooms • Issues Parking Lot
MODULE 1: Introduction
Module 1: Introduction 1) Charles Gerhards, Deputy Secretary and CIO Governor’s Office of Administration 2) Jim Tinney, Director of the Commonwealth Technology Center
Market Trends & Business Demands • Driving Business Strategies Through Sourcing Strategies: • More Effective Delivery of Services • Improved Overall Business Performance • Cost Predictability and Efficiencies • Improved Customer Loyalty • Increased Market Share • Improved Shareholder Value
Barriers to Success FIVE CATEGORIES
Sales Cycle Vendor Jail RFP Time Senior Executive Involvement Business Cycle Executive Involvement
Sales Cycle RFP “Vendor Jail” Competitors Third Parties
Know Who the Key BPO Influencers Are Initial Decision to Outsource Vendor Selection Final Sign-Off 33% 14% 27% CFO 5% 30% 29% CEO Vice President of Business Unit 8% 14% 16% Chief-Level Officer/COO 8% 10% 12% 9% 10% 29% Function Head CIO 2% 3% 5% Cross-Functional Procurement Team 0% 8% 14% 0% 11% 3% Procurement Source: Gartner 125 respondents
Blended e-Learning GO Sales Solution WEB Based, Self-Directed GO Executive Led Instructor Led Classroom WEB Based, Self-Directed Selling Complex Services Selling Complex Services Coaching / Mentoring / Post work Outsourcing Presentations GO & Global Sales WEB Site Links, Manuals & Guides & SimulationArchived portfolio WEB Casts Panel of GO Sr. Mgmt reviewing opportunity success Instructor Led Training with Computer Simulation WEB Cast Archives (Placeware) Online Assessment & Tests PASS
UNDER CONSTRUCTION Life Cycle of Business Change solution phase: Conceptualize Assessment Requirements Design LOI Due Diligence SOW Contract goals objectives desired performance level desired performance level gap current performance level Current:PeopleProcessesInfrastructureResources evaluate & adjust implement & change Implement and Manage
What Are Your Top 5 Benefits? • Increase client’s loyalty to buy more from Unisys. • Create greater value for your clients. • Increase client’s perceptions of you as a “Trusted Advisor”. • Increase knowledge of customers business and the issues driving their decisions. • Increase your “Cross Selling” capability and thereby increase your total sales.
The Trusted Advisor Role “Building a framework for a trust-based relationship is the most powerful way of ensuring the long-term success of a strategically important outsourcing deal.” “Trust and Control: The Key to Optimal Outsourcing Relationships” Gartner, April, 2003 Roger Cox, Ian Marriott Strategic Analysis Report
Trust: Three Key Learnings • Most major deal failures are due to a breakdown in the overall relationship between a business and its outsourcing provider. • Successful outsourcing relies on a range of contacts and interfaces between the service recipient and service provider that go beyond the day-to-day delivery of services specified in contract schedules. • outsourcing deals are less likely to be based on buying specified services, and more likely based on buying a relationship
Introductions • Name • Market / Accounts • Services Sales Experience • Expectations
MODULE 2: Business Drivers
Module 2: Business Drivers 1) Curt Haines, Director, Bureau of Consolidated Computer Services, Governor’s Office of Administration 2)Martin Horn, Former Secretary of Administration
Module 2: Business Drivers Objectives: • Define outsourcing from the market point of view and link the Unisys definition of Information Technology and Business Process Outsourcing (ITO/BPO). • Identify the business drivers that lead to an outsourcing opportunity. • Identify the Business Drivers of “C” level executives that lead to outsourcing initiatives and expanded business opportunities.
Outsourcing: Definition and Overview • What is Outsourcing? • The Unisys “Brand” of Outsourcing: What’s in a Name? • Types of Outsourcing: ITO, BPO • Why Outsourcing: External (Customer) Benefits • Why Sell Outsourcing: Internal (Unisys) Benefits • Why Outsource Now?
What is Outsourcing? • A long term contractual arrangement in which a service provider takes ownership of, and manages, a client’s • Information systems • IT operations • Technology-enabled business processes
What’s in a Name? Information Technology Outsourcing (GO) Business Process Outsourcing (GO) OUTSOURCING Financial Managed Services (GI) Managed Infrastructure Services (GIS) Enterprise Business Services (GI Public Sector)
Business Process Outsourcing (BPO) Definition: • Performing entire business operations functions which may include the information technology operations, applications management and business process integration Examples: • Payment Processing • Life & Pension • Mortgage Processing • Healthcare Payer Administration • Finance • Contact Center • Imaging/Workflow
Information Technology Outsourcing (ITO) Definition: • Long-term, contractual arrangement in which a service provider takes ownership of and manages a client's information systems operations or department Examples: • Data Center Management • Applications Management • Distributed Systems • Desktop and Network Services
BPO vs Managed Services • Business Process Outsourcing:Performing entire business operations on a one-on-one basis. • Managed Services:outsourcing provided to mutliple clients from one or several locations.
Core, Non Core CORE BUSINESS NON-CORE, YET CRITICAL • Managing market Image/trademarks • Caring for patiuents • Developing new consumer products • Check Processing • Policy Administration • Mortgage Loan Administration • Human Resources • Supply Chain Mgmt. NON-CORE, NON-CRITICAL • Cafetieria • Laundry • Maintenance
Why Outsource? What’s in it for the customer?
Why Sell Outsourcing? What’s in it for Unisys? Long term, recurring revenue stream Enhanced financial predictability& visibility Builds long term client relationships Promotes other Unisys products Improves business stability Increases company value
Why Outsource Now? The compelling event. • Image problems? • “Is our industry reputation where we want it to be?” • Strategic direction change? • “We are moving toward a more ‘virtual’ corporate model.” • Financial goals not being met? • “Our year-end results were lower than expected, we have to do something!” • Business pressures mounting? • “This pending merger—we must show ROI— and quickly.”
Life Cycle of Business Change Image:Wall Street, Customers, CompetitiveStrategic:Trends, Directions, Future Financial:Profit, Budgets, AnalystPressures:Market, Industry, Technology, Servicing, Media solution phase: External Drivers: Conceptualize Assessment Requirements Design LOI Due Diligence SOW Contract desired performance level goals objectives gap current:PeopleProcessesInfrastructureResources current performance level evaluate & adjust implement & change Implement and Manage
IMAGE STRATEGIC FINANCIAL PRESSURES Comments / Internal Strife CEO Overall External View, 3 Year Plan Balance Sheet and Income Statement Growth, Stock Valuation Competitive Changes, Globalization, Commoditization, Symbiosis Immortality CFO Financial and Analyst ROI, Profitability Cost Predictability Security of assets ROI, Profitability, Cost Predictability Market Slumps, Regulation, Changes, Asset longevity Needs of Business vs. ROI CIO End User Support Standardization Cost Containment and effectiveness Technology Realization, Market changes Practicality vs. demand Overall operational effectiveness Move the business forward by year Cost Symbiosis, Impartial, Prioritization Equity distribution, CTO Standardization and competitive advantage Operational, Functional, Relevance to mission critical Justification of recommendations Vendors, Political and Inner circle structure Protect his decisions, Grounded and Impulsive Overall effectiveness and completeness of information Repository of intellectual capital and it’s application Justification of cost Keeping it real, Tangible proof of value Market Position and Public View Market Share and Retention Revenue Growth Attention, Recognition, Competition Competitive Gain, Perceived Value “C” Levels and Internal & External Drivers COO CKO CMO
Outsourcing’s New Emphasis: Business Benefit • Improved service • Access to key IT resources business processes and skills • Speed to Market • Financial stability, diminished customer risk
Practice Exercise Module 2: Part 1: Review the Client Case introduction sheet in Appendix A. and begin documenting on the TAS Opportunity Plan in the following: 1. Customer Business Profile 2. Opportunity Profile 3. Compelling Event • Part 2: • Complete the Module 2 Simulation and Initial Executive call and identify: • Business Drivers (capture in Compelling Events of TAS) • Key Issues per Executive (capture in the Decision Criteria of TAS) • Business and Personal Agendas for Key Executives (capture in TAS) • Initial Tactics
TAS Form Target Account Selling Opportunity Plan Account Sales Opportunity Date Team (CONFIDENTIAL WHEN COMPLETE)
MODULE 3: Current Environment
Module 3: Current Environment Karl Kaiser, CIO City of Minneapolis
Module 3: Current Environment • Objectives: • Identify the capabilities of an organization’s ability to change. • Determine the strengths and weaknesses in an organization’s ability to change.
Life Cycle of Business Change solution phase: Conceptualize Assessment Requirements Design LOI Due Diligence SOW Contract desired performance level goals objectives gap current:PeopleProcessesInfrastructureResources current performance level evaluate & adjust implement & change Implement and Manage
Current Environment • People • Processes • Infrastructure • Resources “You can only carry and accomplish so much with what you have.”
People • Organization Capability: People • Skills • Knowledge • Experience • Bandwidth • Barrier or Enabler? • Retaining • Training • Maintaining “I lost the new play book, what do we do and when?” And at what Cost?
Processes Organization Capability: Processes 70s, 80s, 90s, and 00s: it’s all about change • How you do work: • Beginning to end • What you do work with: • Tools • Applications • Support “Businesses continue searching for greater results with reduced overhead.”
Processes Cut Across Departmental Boundaries Records Records Closing Package Processing Edina Office Open/ Setup Closing Bank Branches 250 Secondary Marketing Underwriting Servicing Reality Offices Scottsdale 39 Open/ Setup Processing Closing Property Underwriting Loan Offices 20 Underwriting Fargo Open/ Setup Processing Closing Infrastructure Records
Infrastructure Organization Capability: Infrastructure • Systems / Technologies • Facilities (Locations) • Networks • Applications / Operating Systems “If they see it they may take it away.”