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© 2010 IBM Corporation Judy Kon 10 Nov 2010 Leveraging Delivery Models for Efficiency - Smart Sourcing
© 2010 IBM Corporation
Judy Kon
10 Nov 2010
Leveraging Delivery Models for Efficiency- Smart Sourcing
© 2010 IBM Corporation
Leveraging Delivery models for Efficiency
2
Discussion points
CFO as Value Integrators
Smart Sourcing as an enabler for driving efficiency
Matching smart sourcing options to your
business needs
Client Examples of Smart Sourcing Options
What’s next?
© 2010 IBM Corporation
Leveraging Delivery models for Efficiency
3
Value Integrators drive broader improvements in data and analytics, process and people. Technology underpins the efficiency improvements
all of these
N = 1,454 to 1,469
Note: Defined as those enterprises selecting [5] To a very large extent or [4] on a 5-point scale where [5] To a very large extent and [1] Not at all
Source: IBM Institute for Business Value, The Global CFO Study 2008, 2010
Streamlined information delivery
Value Integrators
Percent Adopted
100%80%60%20% 40%
Constrained Advisors
Disciplined Operators
Electronic data capture at the source
Systematic data cleansing and auditing
Business Risks in Performance Reporting
Employed Functional Best Practices
Utilized automated workflow tools
Measurement & monitoring of processes
Common reporting platform
Common planning platform
What do Value Integrators do differently?
% more
32%
35%
31%
22%
31%
25%
41%
31%
22%
0%
© 2010 IBM Corporation
Leveraging Delivery models for Efficiency
4
Smart sourcing can be both an IT strategy and a business strategy, providing a platform for future growth
Essential activities How outsourcing delivers
Reduce the right costsEnables companies to offload high-cost, non-revenue producing activities
Transition from fixed to variable costsFacilitates the removal of poorly utilized assets and the acquisition of pay-per-use services
Drive process automationIncreases access to automated services, eliminating the need for and cost of do-it-yourself initiatives
Implement strategies to reduce risk Helps lower the risk of data loss and system outages that can disrupt business and damage reputations
Identify and focus on key customers Provides access to value-added services that improve companies’ brand and portfolio
Market to growth areas Extends companies’ reach to include prospects in developing nations and new markets
Invest in ways competitors won’t Bolsters companies’ confidence through improved performance and support
© 2010 IBM Corporation
Leveraging Delivery models for Efficiency
5
We can see large improvements in growth rates of key financial indicators in companies that undertakes sourcing
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
Gro
wth
Rate
Annual Growth
Rates for Non-
Outsourcers
Annual Growth
Rates for
Outsourcers
6.9%6.6%
4.0%
9.8%
SG&A Growth Operating Income Growth
42% Better Performance
48% Better Performance
(lower is better)
Source: “2010 Business impact of outsourcing – a fact-based analysis,”
IBM, January 2010
6.7%
11.0%
EBT Growth
64% Better Performance
Business impact of outsourcing comparison for
industry sector peers
© 2010 IBM Corporation
Leveraging Delivery models for Efficiency
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You can take advantage of a number of different sourcing models based on your business requirements
Access specific skills Transfer skills and knowledge Turn over skills and infrastructure
Portfolio Outsourcing
Outcome-based
SLA-based
Application rationalization
Access to expertise, skills and innovation
Shared investment in dedicated resources
Option for FTEs to transfer to vendor
StaffAugmentation
Task/RFP-based
Statements of Work
Volume purchase agreements
Out-Tasking
Project integration
Standard terms and conditions
Multi-year, bottom-line contract
Forward pricing
Outcome-based
Co-Sourcing
Knowledge transfer
Managed skills
Service Level Agreements (SLAs)
PMO/governance
Some transfer of management responsibility to vendor
Full Outsourcing
Strategy Integration
Custom terms and conditions
SLA/shared risk-reward
PMO/governance
Leverage IBM infrastructure investments
Access to expertise, skills and innovations
Greatest benefits realization
Cloud Computing
Highly standar-dized, virtualized environment
Rapid provisioning, self-service user access
Scalable
Can include private, public or hybrid delivery models
May include elements of pay as you go
© 2010 IBM Corporation
Leveraging Delivery models for Efficiency
7
A service-oriented approach for Managed Hosting Services provided
this customer, improvement in technical support & operational efficiency.
Client:
One of the leading international
providers of integrated logistics
services in ASEAN
International Logistics company in Singapore
Client Challenges
The client was unhappy with the service provided who was not meeting SLA.
They were consolidating their data center across AP and refreshing their hardware.
They had multiple SLA, platforms and vendors to manage. Therefore they wanted to streamline their IT operations and vendors.
Solution
IBM proposed the use of virtualization technology to help the customer perform server consolidation and provided service-oriented charges/ mechanism so that business and IT planning, forecast, etc could be made easier and more manageable.
Also offered a stringent SLA coupled with service credit mechanism to penalize and reward SLA achievements
The hardware components were incorporated into a total outsourcing project and offer this option as a complete service model with utility charges.
In addition, virtualization technology was incorporated to help with consolidation and utility based charges were provided to help the customer to drive business more efficiently.
Benefits
The client now has the infrastructure management services and tools it needs to streamline its IT operations; and also improved technical support capabilities for better operational efficiency.
© 2010 IBM Corporation
Leveraging Delivery models for Efficiency
8
ABB utilizes GTS’ managed services to reduce risks in data center environment and realized long term costs savings
Power Company in Australia
Client:
ABB is a leader in power and
automation technologies that
enable utility and industry
customers to improve their
performance while lowering costs.
Client Challenges
ABB was facing substantial risks in their data centre environment (e.g. temperature control, air-con full capacity operations, space limitation, high cost in power consumption…etc)
These challenges could not satisfy current operations and future business growth.
Solution
GTS provided consultant services for relocation planning and implementation.
The team also build new machine room with customized cabling, power supply during the relocation project, and provide managed server services at the first year and transforming to the full operations outsource in 5 years.
Benefits
Provided the client with high reliability and the shortest down time relocation services.
Worked within clients’ budget limited and enabled cost savings in the run long
© 2010 IBM Corporation
Leveraging Delivery models for Efficiency
9
A major financial services provider improves its enterprise-wide
development processes with IBM’s Smart Business Desktop Cloud
Client:
One of Australia's largest financial
services groups and a recognized
leader in the investment
administration industry. The company
currently has more than 5,000
financial advisors and manages over
$40 billion of superannuation,
retirement and investment savings for
more than 400,000 investors.
A major financial services company in Australia
Client Requirements
This customer success is largely attributed to its ability to provide quality and innovative tools and platforms to their financial advisers. With the shrinking pool of available development resources, securing access to development resources became a business priority.
They wanted to engage a robust service partner to implement a new IT infrastructure that would best support their expansion and its requirements for a distributed team of developers, testers and users.
Solution
IBM Global Technology Services came in to help them plan, design and implement IBM’s innovative and unique IBM Smart Business Desktop Cloud.
The solution had to be integrated with the company’s existing VMware environment and be deployed with their XenDesktop Broker and Solution Overlay, basically providing the customer with an overall solution package for their end user framework that is both flexible and efficient to manage.
Benefits
The client is very pleased with the services delivered and how IBM was able to secure a development environment for the company’s dispersed developers, testers and users across the world.
Now, the company enjoys:
• Improved access to resources anywhere, anytime.
• Lowered maintenance and support costs through remote desktop management and user support.
• A flexible and scalable infrastructure to support the peaks and troughs of resource demands.
© 2010 IBM Corporation
Leveraging Delivery models for Efficiency
10
Mumbai International Airport streamlines IT operations when it engages
GTS to provide centralized Help Desk Services for its data center
Client:
Mumbai International Pvt. Ltd (MIAL),
is a joint venture airport management
company in India that manages the
Chhatrapati Shivaji International
Airport in Mumbai. The airport caters
to more than 40 million passengers
annually.
Airport in India
Client Challenges
The client was unhappy with the service provided by its existing IT provider who has weak infrastructure management services.
Needed a services vendor to streamline their IT operations
Solution
MIAL engaged GTS End User Support Services to provide management and end-user support at airport terminals, corporate/ project and airline staff.
GTS provides support for the client’s data center and network through a centralized help desk service.
The services is supported by the Network Operation Center-Inside (NOCi) tool, which is used for call logging, call monitoring and asset management processes.
A total of 65 GTS staff manage and monitor MIAL’s data center and take care of the SLA commitments
Benefits
The client now has the infrastructure management services and tools it needs to streamline its IT operations; and also improved technical support capabilities for better operational efficiency.
© 2010 IBM Corporation
Leveraging Delivery models for Efficiency
11
Build a Strategic Partnership with IBM - Benefits
How IBM can help:
Take cost out your Business Back-Office:
+ Considerable cash conversion improvement
Take cost out of your IT Back-office:
+ Considerable flexibility / security benefits
Put the best Research Organization in the world on your
toughest problems
Fuel hedging, telco revenue leakage, steel slab manufacturing…
Sponsor a
C-Level Workshop
Determine areas of
partnership
Agree on solution
options and
business model
Start reducing risk
and conserving
cash NOW
Shift Capex to smooth monthly Opex
Hardware, Software, and Services paid over 3+ years
Actions to take:
Reduce IT investment risk
Business models that vary IT spend with business performance
Access world-class skills when and where you need them
Largest global bench of IT and business consulting expertise
Reduce cost and risk, conserve cash, and enable innovation
© 2010 IBM Corporation
Leveraging Delivery models for Efficiency
12
It’s time to make your move …
How will your company move forward today?
Please contact your respective sellers and account
managers or
Write to me Judy Kon: [email protected]
