Outsourcing & Application Mgt Discussion With DePaul

Top 10 Market Factors
Overall, Outsourcing Is Still A Healthy Market
Maturity of IT Outsourcing
Immaturity of BPO, 2003 Expected To Be Critical Year
Growing Demand for End-to-End Services Requires Focus
Increased Competition Leads To Intense Price and Capital Pressure
Highly Fragmented Competitive Landscape
Outsourcing Market Volatility
New Outsourcing Business Model
Outsourcing Shift to a Long-Term Value Proposition
Impacts of Economic Downturn: Elongated Sales Cycles, Cautious Spending
Factors, Trends, & Implications
Factors, Trends, & Implications
Market Growth
Key Findings
Gartner’ s May 2002 forecast update is significantly different from the November 2001 forecast
ITO was forecasted to grow at 11.2 % (CAGR) and is now forecasted at 8.0% (CAGR)
BPO forecast was lowered from a forecast of 15.0% to 9.0% (CAGR)
IT outsourcing continues to experience relatively healthy growth during the economic downturn, compared with other IT services, as a result of user emphasis on cost-reduction and efficiency enhancement
The lack of disruptive new technology on which to build new solutions and drive transitional outsourcing had a negative impact on outsourcing overall
Companies are focusing on core business processes, increasingly outsourcing non-core business processes, particularly back-office functions
Service Offering Key Trends

Operate Americas Outsourcing Vision: Earning the Right To Be Your Partner
Outsourcing Is a Natural Extension of Consulting Services
What are Companies Outsourcing?
Operate is a collection of service offerings that provides capability beyond the traditional consulting model to include maintenance and operation of client systems.
Outsourcing Offerings
Applications Development and Management (ADM)
Ongoing maintenance, enhancement and development, and new releases/upgrades for client software applications

Infrastructure Management (IM)
Ownership of client’ s IT platform hardware and its operations
e.g. Data Center Operations, Network Services, Desktop Services, and Help Desk

Business Process management/Outsourcing (BPM/BPO)
Ownership or management of a business process function
e.g. Call Center operations or Accounts Payable function
Infrastructure Management
BPM Offerings Are Aligned With Major Non-Core Business Functions
Once Non-Core Activities Are Identified, They Can Be Outsourced Or Eliminated
Top 10 Reasons Client’ s Choose Outsourcing
Know How to Spot an Outsourcing Opportunity

ADM Addresses Four Key Sets of Issues
ADM Critical Success Factors
Application Development & Management Solutions
Build/Run Value Proposition for Clients

ADM Provides a Full Range of Services to Maximize Value, Quality & Flexibility
CGE&Y’ s ADM Solution: Scope of Services
CGEY’ s ADM Solution: Center-Based Support
CGEYAS Has an Integrated Global Delivery Capability That Is Transparent to the Client

The Prime Integrator Methodology Coordinates the Delivery of CGE&Y’ s Global Delivery Centers
CGEY’ s Prime Integrator Is a New Approach Based on Proven Capabilities
What Research Has Shown About Offshore Systems Development
The current market for services delivered via offshore resource remains fairly small at less than 5% of the total IT services market (Gartner)
Interest in offshore providers runs high. While 44% of the firms we spoke with engage offshore providers today, two-thirds intend to do so by 2003 (Forrester)
The number of large firms using offshore providers will grow by 50% in the next two years, and offshore technology budgets will more than double (Forrester(
In the indirect approach , pivotal providers carry out activities formerly conducted by user companies like contract negotiation and project management. Because they assume more responsibility, pivotal providers cost more than going direct but they also minimize complexity, lock in the right expertise and keep labor costs in check for user firms. By 2005, we believe 64% of firms going offshore will adopt an indirect approach (Forrester)

CGEY’ s Prime Integrator Delivery: What Client’ s Have Been Concerned About
Loss of òcontrol’ is resolved: by local project & technical management within the project team
Loss of flexibility is resolved: by close local relationship with the client, local requirements iteration, design management, and iterative delivery & review
Loss of velocity is resolved: by scheduled prototypes and direct local control
Risks of greater communication flexibility is resolved: by periodic review sessions and standard status, issues and change summary
Security is resolved: by hardware, software and physical location
Business Continuity is resolved: by back-up recovery process and secondary facilities
Capability maturity is resolved: through over 1,500 projects and over decade of prior experience
Risk Management is resolved: by rigid quality control & review and OTACE
Enhancements Have Been introduced Over the Last 2 Years to Assure Quality of Offshore Delivery
Initial Project Assessment
Client business environment
Client IT Environment
Workplan management
Just-in-time activity and task management
Daily issues logs & resolution
Exploit time difference to project advantage
Communication Discipline
Daily activity log
Build reviews
Video conference reviews
Prime Integrator Methodology
Initial requirements ASE’ s and prototype
Defined contingency points
Iterative approach
Additional management due to geography
Training and certification process
Defined communications & process
Prime Integrator QA Process
QA Process & OTACE
Distributed Delivery is an Essential Component of Productivity
Evolutionary Stages in Offshore Models
We will deliver excellence regardless of the manner or location in which the project is provided

CGEY Offers a Full Compliment of Outsourcing and Consulting Services
The CGEY Advantage: A Global Leader in Applications Development & Management
Outsourcing is a significant focus within the CGEY organization
$1.8B in revenue and growing rapidly
13,000 employees worldwide (AM & IM)
Over 1,250 past and current clients
Critical mass and capability in all
key geographic markets
Strong presence in the Americas
$400 M in revenue with several recent
large contracts
2,500 employees (AM & IM)
An Innovator in the Market Place
1st to market with formal Applications Management offering (late 1980′ s)
A unique and powerful combination of consulting and full-scope outsourcing

What Services Do We Offer?
Unique Quality Processes & Procedures – Affinity Team Model
Sector Telecommunications, Media & Network
Deal Type Applications Development and Management
Geography North America
Structure Outsourcing
Duration 6 years
Start Date June 1999
Total Revenue $500 Million

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