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IBMGlobalServices-StrategicOutsourcingIBMStrategicOutsourcing©2003IBMCorporation

IBMStrategicOutsourcing

EmilyWrightBusinessConsultingServices1TheMarketEnvironmentStrategicOutsourcingIBM'sCapabilitiesOnDemandAgenda2Sloweconomicgrowthandpressurestoimproveearningsarecombiningtomakecostcuttingtheprimaryagendaitemforalargemajority(78%)ofcompaniesGrowthisemergingasanimportantissueaseconomicrecoveryhasbeenpostponed(andmaybeslowtoreturn).ITcontinuestobeanimportantleverinachievingthecostsavingobjectiveformostcompaniesintwoverydifferentwaysITisbeingtaskedtoenablebusinessprocessefficiencyITspendingisalsoasourceofsavingsasbudgetsforallfunctionsarebeingtrimmed.Ingeneral,ITbudgetpressureisinlinewiththeoverallbusiness,however30%ofrespondentsindicatethatITspendinghasbeencutmorethanotherfunctionswhile10%statethatIThasbeenprotectedfromcutsSource:2003SOMarketInsightsstudyof300seniorexecutives,MercerManagementConsultingCompaniesaretakingactionstoimprovetheirbottomlineratherthanwaitingfor“therecovery”tosolveproblemsInaweakglobaleconomy,companiesfaceuncertaintyabouttheireconomicandstrategicfuture3Today’sEconomyisForcingCompaniestoAddressComplexNeedstoEnhanceShareholderValueShareholderValue

ManagementNeedsReal-timedecisionsupportanalyticsandtoolsOperatingmodelflexibility

FinancialNeedsReduceandcontrol

operatingcostsImprovecashflowImprovereturnoncapital

StrategicNeedsImprovedcorebusinessfocusTransformedbusinessdesignAdditionaldollarsinvestedinhigher-valueprojects4"Strategicoutsourcingpositivelyimpactsshareholdervalue.Ourresearchsuggeststhedifferenceisintheorderof5.4%abovetheindividualsectoraverageand4.9%abovetheoverallFTSE100."-Source:MorganChambers,"OutsourcingintheFTSE100:TheDefinitiveStudy"

"EvidenceshowsthatIToutsourcinghasadiscerniblepositiveimpactonshareprices.Astudyof27companiesundertakinglargeIToutsourcinginitiativesindicatesanaveragegaininshareholdervalueof5.7%overandabovethegeneralmarkettrend."-Source:SternStewart,"ITOutsourcingandShareholderValue"Whyoutsource?Toincreaseshareholdervalue...5CostRevenue CustomerEfficiencyGrowth SatisfactionSource:2003SOMarketInsightsstudy,MercerManagementConsulting--300interviewswithseniorexecutivesSeniorExecutivePriorities6Substantialmarketgrowthoverlastfiveyears;growthanticipatedat9%through2007.IBMisamarketshareleader.Source:GMV2H03TheMarketplaceTheMarketplaceMarketOpportunityMarketOpportunityCustomersToptwobusinesspriorities-costefficiencyandrevenuegrowthServices-savvycustomers;increasing3rdpartyinvolvementSophisticatedmarketplace(customers,suppliers)CIOsplayingastrongroleinoutsourcingdecisionmakingIncreasinginterestinOnDemandGrowinginterest/expectationofacollaborativerelationshipDealsPricepressure–offshoreacceptanceCompetitionisfierceMorecomplexdealstructuresSOisaMainstreamITSolution7SOaspercentageofIBMrevenue19%SOaspercentageofIBMPTI28%OtherIBMSOSOaspercentageofIBMemployees21%StrategicOutsourcingrepresentsamajorsourceofrevenueandprofitforIBM8Thestrategic(transformational)andconstraint(necessaryevil)segmentsarebecominglessprevalent.CustomersaretendingtoviewITasasupportorenabler9PercentoftheFortuneXthatOutsourcedfrom1997-200260%ofFortune100firmshavetheiroutsourcingbusinessstrategiesinplaceSource:IDC–ContractsDatabase1997-200280%64%60%36%23%Fortune10Fortune25Fortune100Fortune500Fortune1000Outsourcinghasbecomeacommonbusinessstrategy10StrategicOutsourcing:WhatistheValuefortheCustomer?CostreductionAbilitytofocusoncorecompetenciesIncreaseavailabilityofspecificskillsandresourcesImprovestability,effectivenessandservicelevelsofITEnablerapidbusinesschange/expansionObtainaccesstoadvancedtechnologies&research,andtoindustry,businessandtechnologyexpertsPredictableexpensemanagementGaincontractuallycommittedservicelevelsFlexibilitytotransitiontothenextgenerationofinfrastructureandapplicationsBuildalongtermstrategicrelationship...forcompetitiveadvantageIncreaseshareholdervalue11UnderstandyourcorecompetenciesinlightofyourbusinessstrategyDeterminewhatportionsofyourportfoliotooutsourceIBMcanpartnerwithyourcompanyinavarietyofways--fromout-tasking,toselectiveoutsourcingofoneofmoreITfunctions,tofull-scaleoutsourcingSelectanoutsourcingproviderwhowillbuildastrongrelationshipwithyourcompanyIBMtakesarelationshipapproachthatensuresclearexpectations,allowsforflexibility,collaborativeplanningandmutualaccountabilityARoadmaptoSuccessfulOutsourcing12Asuccessfuloutsourcingrelationshipfocuseson:SettingclearexpectationsfortherelationshipattheoutsetEstablishingappropriategovernanceprotocolstoguidejointactionthatcandeliveronthepromiseoftherelationshipRecognizingtheneedtoadjusttherelationshipovertimeSharedriskandreturnMeetingservicelevelexpectations--notjustSLAsContractflexibility--theabilitytochangethescaleandcontentofwhatisbeingdeliveredasthebusinessenvironmentchangesKeystoaSuccessfulOutsourcingRelationship139、静夜四无邻邻,荒居旧业业贫。。1月-231月-23Wednesday,January4,202310、雨中中黄叶叶树,,灯下下白头头人。。。20:37:2520:37:2520:371/4/20238:37:25PM11、以我独独沈久,,愧君相相见频。。。1月-2320:37:2520:37Jan-2304-Jan-2312、故人人江海海别,,几度度隔山山川。。。20:37:2520:37:2520:37Wednesday,January4,202313、乍见翻疑梦梦,相悲各问问年。。1月-231月-2320:37:2520:37:25January4,202314、他乡生生白发,,旧国见见青山。。。04一一月20238:37:25下午午20:37:251月-2315、比不不了得得就不不比,,得不不到的的就不不要。。。。。一月238:37下下午午1月-2320:37January4,202316、行动出成成果,工作作出财富。。。2023/1/420:37:2520:37:2504January202317、做前,,能够环环视四周周;做时时,你只只能或者者最好沿沿着以脚脚为起点点的射线线向前。。。8:37:25下午午8:37下午午20:37:251月-239、没有失败败,只有暂暂时停止成成功!。1月-231月-23Wednesday,January4,202310、很多事情情努力了未未必有结果果,但是不不努力却什什么改变也也没有。。。20:37:2520:37:2520:371/4/20238:37:25PM11、成功就是日日复一日那一一点点小小努努力的积累。。。1月-2320:37:2520:37Jan-2304-Jan-2312、世间间成事事,不不求其其绝对对圆满满,留留一份份不足足,可可得无无限完完美。。。20:37:2520:37:2520:37Wednesday,January4,202313、不知香香积寺,,数里入入云峰。。。1月-231月-2320:37:2520:37:25January4,202314、意意志志坚坚强强的的人人能能把把世世界界放放在在手手中中像像泥泥块块一一样样任任意意揉揉捏捏。。04一一月月20238:37:25下下午午20:37:251月月-2315、楚塞塞三湘湘接,,荆门门九派派通。。。。。一月238:37下下午午1月-2320:37January4,202316、少少年年十十五五二二十十时时,,步步行行夺夺得得胡胡马马骑骑。。。。2023/1/420:37:2520:37:2504January202317、空山新新雨后,,天气晚晚来秋。。。8:37:25下午午8:37下午午20:37:251月-239、杨柳散和风风,青山澹吾吾虑。。1月-231月-23Wednesday,January4,202310、阅读一切切好书如同同和过去最最杰出的人人谈话。20:37:2520:37:2520:371/4/20238:37:25PM11、越越是是

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