1. Critical Factors in Outsourcing IT Operations Iulian Lupu, Account Executive (Sales) Marius Zapartan, ISS Unit Manager (Delivery) Copyright © Forte Business Services SRL, 2006. All rights reserved. Bucharest April 25th, 2007

2. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved Agenda  Outsourcing IT Operations – Reality and Facts  Outsourcing IT – a Forte view  Critical Factors  Study case: Siemens VDO Automotive SRL Romania

3. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved ( Reality and Facts )

4. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved Outsourcing IT Operations – reality and facts  Cut costs for IT infrastructure and IT support services  Focus on core business  Higher quality of IT services -> synergies -> higher quality of services to customer -> competitive advantage (long-term)  Moving Fixed to Variable Costs and Supporting Organizational Change Main Reason for IT Outsourcing: Reality & Facts A Forte view Critical Factors Study Case

5. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved Outsourcing - part of the cost structure Source: Strassmann, 2006 Outsourcing Ratio = Outsourcing / Direct Costs Cost of Sales Profits Depreciation Interest, Taxes Outsourcing Direct Overhead Operations Cost of Sales Profits Depreciation Interest, Taxes Outsourcing Direct Overhead Operations Reality & Facts A Forte view Critical Factors Study Case

6. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved Outsourcing not correlated with Profitability Source: Strassmann, 2006 Reality & Facts A Forte view Critical Factors Study Case

7. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved The Rationale for Outsourcing vs. Market Experience Source: Deloitte, 2005 Reality & Facts A Forte view Critical Factors Study Case

8. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved ( Outsourcing IT - a Forte View )

9. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved Outsourcing IT Operations – a Forte view  Main Characteristics of IT-Outsourcing  Long-term contractual partnership  Transfer of people, assets, infrastructure  Ongoing cross-border and even global provision of operations for customer Reality & Facts A Forte view Critical Factors Study Case

10. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved Outsourcing IT Operations – a Forte view (cont’d)  The complexity of Outsourcing Engagement Management:  Customer requests  EBIT  HR and people take over  Return on investment  Partner agreements  General risks:  Structured risks  Costs  Transparency Reality & Facts A Forte view Critical Factors Study Case

11. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved Structured risks Source: Deloitte, 2005 Reality & Facts A Forte view Critical Factors Study Case

12. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved Cost-related risks of Outsourcing Source: Deloitte, 2005 Reality & Facts A Forte view Critical Factors Study Case

13. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved Transparency in price and cost structure Source: Deloitte, 2005 Reality & Facts A Forte view Critical Factors Study Case

14. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved ( Critical Factors )

15. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved Critical Factors  Outsourcing Strategy  A clearly defined outsourcing strategy is aligned with the business strategy and enhances execution Reality & Facts A Forte view Critical Factors Study Case

16. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved Critical Factors  Key Performance Indicators  “What get’s measured, get’s managed” Reality & Facts A Forte view Critical Factors Study Case

17. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved Critical Factors  Building the right relationship  Identifying the customer’s strategic goals  Trust  The contract Reality & Facts A Forte view Critical Factors Study Case

18. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved ( ) Study Case

19. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved Siemens VDO – Full IT Outsourcing Security Service Desk Services Data Center Services Desktop Services Application Operation Services Network Services Reality & Facts A Forte view Critical Factors Study Case

20. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved 1/3 of Forte’s staff is involved in outsourcing activities Service Delivery Teams LD BUH – Local Delivery Bucharest GPC TRS – Global Production Center Timisoara LD NS TRS – Local Delivery Nearshoring Timisoara Reality & Facts A Forte view Critical Factors Study Case

21. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved

22. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved Thank you for your attention! ()() Any Questions …or Answers? :-)

23. Copyright © Forte Business Services SRL, 2006. Forte Business Services SRL Str. Lipscani 102, Sector 3, Bucureşti Phone: +40 (21) 303 89 23 Phone: +40 (21) 303 89 18 Mobile: +40 (721) 22 27 66 Mobile: +40 (723) 30 32 58 Fax: +40 (21) 303 89 90 iulian.lupu@siemens.comiulian.lupu@siemens.com marius.zapartan@siemens.commarius.zapartan@siemens.com Iulian Lupu Marius Zapartan Account Executive ISS Unit Manager Thank you for your attention!

24. Global network of innovation Copyright © Forte Business Services SRL. All rights reserved Sources  Deloitte Development LLC - Member of Deloitte Touche Tohmatsu. (2005). Calling a Change in the Outsourcing Market - The Realities for the World’s Largest Organizations. Extracted June 28th, 2006 from Deloitte Consulting Luxemburg Web page: http://www.deloitte.com/dtt/article/0,1002,sid%253D48930%2526cid%253D92427,00. html  Strassmann, P. A. (2006). Is Outsourcing Profitable? Washington D.C.: George Mason University. PDF document extracted 01.07.2006 from Prof. Strassmann’s personal website: http://www.strassmann.com/pubs/gmu/OutsourcingV6.pdfhttp://www.strassmann.com/pubs/gmu/OutsourcingV6.pdf Video with the lecture from the slides (Google Player needed): http://video.google.com/videoplay?docid=9212234366223965964 http://video.google.com/videoplay?docid=9212234366223965964