DePaul University – School of CTI IS 371 Introduction to I.T. System Management
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Transcript of DePaul University – School of CTI IS 371 Introduction to I.T. System Management
DePaul University – School of CTIIS 371Introduction to I.T. System Management
Application OutsourcingDave Galen
24th February 2009
© 2005 Accenture. All rights reserved.
IS 371Introduction to I.T. System ManagementApplication Outsourcing
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Today’s Discussion
• Who is Accenture?
• What outsourcing trends are reshaping IT and business process delivery models?
• IT Outsourcing:– What is Application Outsourcing?– What is Business Process Outsourcing?
• Group Discussion
• Questions
© 2005 Accenture. All rights reserved.
IS 371Introduction to I.T. System ManagementApplication Outsourcing
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Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses.
• We help clients: – Identify and enter new markets.– Increase revenues in existing markets.– Improve operational performance.– Deliver their products and services more
effectively and efficiently.
• Services we offer include: – Business consulting.– Systems integration.– Application outsourcing.– IT infrastructure outsourcing.– Business process outsourcing.
ACCENTURE GLOBAL:
• Net Revenues: US$ 23.4 billion for fiscal 2008 (12 mos. ended Aug. 31, 2008)
• Exchange/Ticker: NYSE/ACN
• Employees: More than 186,000 (including approximately 5,000 senior executives)
• Global Reach: More than 200 offices in 52 countries
• Geographic Regions:– Americas– Asia Pacific– Europe/Middle
East/Africa
FACTS & FIGURES, WHAT WE DO, SERVICES WE OFFER
• Accenture serves approximately 2,500 clients that span the full range of industries around the world.
• We serve 96 of the Fortune Global 100, three-quarters of the Fortune Global 500.
• Of our top 100 clients in fiscal 2008, based on revenue, all 99 have been clients for at least five years and 87 have been clients for at least 10 years.
© 2005 Accenture. All rights reserved.
IS 371Introduction to I.T. System ManagementApplication Outsourcing
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Accenture delivers its services and solutions through five operating groups…
ACCENTURE ORGANIZATION MODEL
Comm. & High Tech
FinancialServices
Public Service Products Resources
• Banking• Capital Markets• Insurance
• Communications• Electronics &
High Tech• Media &
Entertainment
Serving sectors: • Defense • Postal • Education • Revenue• Human Services• Immigration• Justice/Security • Election Services
• Automotive• Health Services• Industrial
Equipment• Pharmaceuticals
& Medical Products
• Retail & Consumer
• Transportation & Travel Services
• Chemicals• Energy• Forest Products • Metals & Mining• Utilities
Business Consulting
Outsourcing & BPO Businesses
Technology & Systems Integration
This industry focus provides Accenture’s professionals with a thorough understanding of industry evolution, business issues and applicable technologies, enabling Accenture to deliver solutions tailored to each client's industry.
Outsourcing Trends
© 2005 Accenture. All rights reserved.
IS 371Introduction to I.T. System ManagementApplication Outsourcing
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The parachute analogy
What are the client’s (for
example, the military)
top 3 buyer values when
buying parachutes?
Which one is MOST
important? Why?
© 2005 Accenture. All rights reserved.
IS 371Introduction to I.T. System ManagementApplication Outsourcing
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Improve Company Focus
Reduce and Control Operating Costs
Free Resources for Other Purposes
Gain Access to World-Class Capabilities
Resources Not Available Internally
Accelerate Reengineering Benefits
Reduce Time to Market
Share Risks
Take Advantage of Off-Shore Capabilities
Function Difficult to Manage or Out of Control
Top 10 Reasons Companies Outsource (2005)
Note: Data is based on 1,410 new members surveyed by The Outsourcing Institute.Source: Outsourcing Institute, Eighth Annual Outsourcing Index, Vol. 3 No. 4, Winter 2005.
What are the benefits to outsourcing?
3%
3%
4%
6%
6%
8%
12%
12%
16%
17%
0% 5% 10% 15% 20%
© 2005 Accenture. All rights reserved.
IS 371Introduction to I.T. System ManagementApplication Outsourcing
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More CIOs are Turning to Outsourcing to Stay Competitive
Business ProcessOutsourcing
InfrastructureOutsourcing
ApplicationOutsourcing
9-11%
5-8%
10-12%
Analysts predict the Application Outsourcing market will continue to have broad uptake and high growth.
Relative Market Adoption
Application Outsourcing
Infrastructure Outsourcing
Business Process Outsourcing
Annual Market Growth
© 2005 Accenture. All rights reserved.
IS 371Introduction to I.T. System ManagementApplication Outsourcing
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Why Outsourcing? Why Now?
Lower Total Cost of Ownership
Gain Greater Management
Control and Flexibility
Increase Value fromApplication Investments
Improve Application Performance
© 2005 Accenture. All rights reserved.
IS 371Introduction to I.T. System ManagementApplication Outsourcing
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Sliding position indicates current client mindset
InsourceOffshore
Staff AugmentationOnshore Staff Augmentation
Co-Source OutsourceOnshore
OutsourceOffshore
Degree of Comfort with a Sense of Loss of Control
Status Quo Fully leveraged model
What is your Current View on a Sourcing Solution?
© 2005 Accenture. All rights reserved.
IS 371Introduction to I.T. System ManagementApplication Outsourcing
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Geopolitical Concerns
Employee Backlash
Customer Reaction
Negative Publicity
Legislation
Severance Costs
Political Pressure
Market Reaction
Union Pressure
Competitor Criticism
Low Level of Concern HighDiamondcluster. 2006 Global ITO Study.
Employers more candid with employees re: outsourcing endeavors; Finding new, higher-value roles for employees who would have been displaced
Uncertain geopolitical conditions require buyers to think more strategically and weigh risk versus reward when choosing how and where work is performed.
Fear about negative customer reaction and publicity continues to keep buyers from publicly discussing outsourcing endeavors; potentially increases tendency for employee backlash
Areas of Minimal Concern
Few buyers are worried about competitor criticism (because everyone is doing it), union pressures (because most IT jobs are non-unionized) and market reaction (because it can be a financially sound decision). Few buyers expressed concerns about political pressure, though this will likely increase as a concern with the approach of the U.S. Presidential campaign in 2008.
Tends to be more of a concern on the provider-side due to pending/recently passed state and local legislation in the US that prohibits outsourcing activities under certain conditions
A sound human capital management strategy is required in order to control costs and mitigate morale issues
What are the perceived barriers to outsourcing? (READ AS AREAS OF RISK!!!)
20062005
Application Outsourcing
© 2005 Accenture. All rights reserved.
IS 371Introduction to I.T. System ManagementApplication Outsourcing
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Companies are Bundling Outsourcing Services to Gain Additional Benefits
Bundled Solutions
Application Services
Fin
ance
Ser
vice
s
Infrastructure Services
HR
Ser
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Lea
rnin
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ervi
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Pro
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me
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Cu
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Co
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En
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Da
ta
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Ind
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Sp
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Today’sTopics
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IS 371Introduction to I.T. System ManagementApplication Outsourcing
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Let’s Go On a Cruise!!
© 2005 Accenture. All rights reserved.
IS 371Introduction to I.T. System ManagementApplication Outsourcing
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Accenture’s Application Outsourcing Approach
“Engine Room”
“Casinos & Lounges”
© 2005 Accenture. All rights reserved.
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• Extensive range of skills and capabilities
• 24x7 development and maintenance
• Strong technology alliances
• Onshore / offshore delivery expertise since 1985
• Core network with 50,000+ people
• Deep Client Knowledge, Industry & Platform Skills
• Certification – (e.g., India -- CMM Level 5, ISO9001, eSCM, COPC, BS7799, SAS70; Manila -- CMM Level 5, ISO9001, eSCM, COPC)
• SLA and metrics-based approach
Global Delivery Center Network – Onshore, Nearshore, and Offshore – The “Where”
Questions?