DePaul University – School of CTI IS 371 Introduction to I.T. System Management Application...

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



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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.



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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



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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?



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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%



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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



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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



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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?



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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



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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

vice

s

Lea

rnin

g S

ervi

ces

Pro

cure

me

nt

Ser

vice

s

Cu

sto

mer

Co

nta

ct

Ser

vice

s

En

terp

rise

Da

ta

Man

ag

emen

t S

ervi

ces

Ind

us

try

Sp

ecif

ic

Ser

vice

s

Today’sTopics



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Let’s Go On a Cruise!!



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Accenture’s Application Outsourcing Approach

“Engine Room”

“Casinos & Lounges”



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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?

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