Critical Factors in Outsourcing IT Operations Iulian Lupu, Account Executive (Sales) Marius Zapartan, ISS Unit Manager (Delivery) Copyright © Forte Business Services SRL, All rights reserved. Bucharest April 25th, 2007
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
Global network of innovation Copyright © Forte Business Services SRL. All rights reserved ( Reality and Facts )
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
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
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
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
Global network of innovation Copyright © Forte Business Services SRL. All rights reserved ( Outsourcing IT - a Forte View )
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
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
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
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
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
Global network of innovation Copyright © Forte Business Services SRL. All rights reserved ( Critical Factors )
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
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
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
Global network of innovation Copyright © Forte Business Services SRL. All rights reserved ( ) Study Case
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
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
Global network of innovation Copyright © Forte Business Services SRL. All rights reserved
Global network of innovation Copyright © Forte Business Services SRL. All rights reserved Thank you for your attention! ()() Any Questions …or Answers? :-)
Copyright © Forte Business Services SRL, Forte Business Services SRL Str. Lipscani 102, Sector 3, Bucureşti Phone: +40 (21) Phone: +40 (21) Mobile: +40 (721) Mobile: +40 (723) Fax: +40 (21) Iulian Lupu Marius Zapartan Account Executive ISS Unit Manager Thank you for your attention!
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: html Strassmann, P. A. (2006). Is Outsourcing Profitable? Washington D.C.: George Mason University. PDF document extracted from Prof. Strassmann’s personal website: Video with the lecture from the slides (Google Player needed):