IT Outsourcing
Chad Doiron / Michael Saunders April, 2007

Today’ s Presentation
Why are companies outsourcing?
What is being outsourced?
How are companies outsourcing?
Challenges
Benefits
Why are companies outsourcing?
Why are we outsourcing?
The future
Focus On Internal Core Competencies
Labor Arbitrage
Improve (Predict) Service Levels
Enterprise Transformation

What is being Outsourced?
What is being Outsourced?
What do we Outsource?
The future
Increased mix of off-shore/on-shore resources
Additional business processes (A/P, customer service, human resources, etc.)
Enterprise Architecture
Research & Development
How are companies outsourcing?
Example of Third Generation Organization
Additional Contract Considerations
Base services include service level agreements, scope and support requirements
Metrics used to establish minimum requirements
Monetary penalties if metrics not achieved
Costs tied to benchmarks
New projects structured under change controls that describe the scope, cost, and deliverables
All projects managed according to single overall governance model
The future
Greater Focus on Partnership (Less Focus On The Company / Vendor Relationship)
Greater Focus On Innovation
Use multiple vendors
Shift in Budget Spend (From Operational Keeping The Lights On To Strategic)
Shorter Contracts With More Flexibility
Challenges
Challenges
Challenges
A successful outsourcing requires trust, understanding and alignment, yet, the interests of the customer and the service provider are not naturally aligned
A successful outsourcing must strive to be a partnership, yet the nature of the transaction can produce complex agreements, lengthy deal cycles and adversarial negotiations.
Benefits
The Future
Questions

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