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,IBMGlobalServices-StrategicOutsourcing,IBMStrategicOutsourcing,2003IBMCorporation,IBMStrategicOutsourcingEmilyWrightBusinessConsultingServices,2,TheMarketEnvironmentStrategicOutsourcingIBMsCapabilitiesOnDemand,Agenda,3,Sloweconomicgrowthandpressurestoimproveearningsarecombiningtomakecostcuttingtheprimaryagendaitemforalargemajority(78%)ofcompaniesGrowthisemergingasanimportantissueaseconomicrecoveryhasbeenpostponed(andmaybeslowtoreturn).ITcontinuestobeanimportantleverinachievingthecostsavingobjectiveformostcompaniesintwoverydifferentwaysITisbeingtaskedtoenablebusinessprocessefficiencyITspendingisalsoasourceofsavingsasbudgetsforallfunctionsarebeingtrimmed.Ingeneral,ITbudgetpressureisinlinewiththeoverallbusiness,however30%ofrespondentsindicatethatITspendinghasbeencutmorethanotherfunctionswhile10%statethatIThasbeenprotectedfromcuts,Source:2003SOMarketInsightsstudyof300seniorexecutives,MercerManagementConsulting,Inaweakglobaleconomy,companiesfaceuncertaintyabouttheireconomicandstrategicfuture,4,TodaysEconomyisForcingCompaniestoAddressComplexNeedstoEnhanceShareholderValue,5,Strategicoutsourcingpositivelyimpactsshareholdervalue.Ourresearchsuggeststhedifferenceisintheorderof5.4%abovetheindividualsectoraverageand4.9%abovetheoverallFTSE100.-Source:MorganChambers,OutsourcingintheFTSE100:TheDefinitiveStudyEvidenceshowsthatIToutsourcinghasadiscerniblepositiveimpactonshareprices.Astudyof27companiesundertakinglargeIToutsourcinginitiativesindicatesanaveragegaininshareholdervalueof5.7%overandabovethegeneralmarkettrend.-Source:SternStewart,ITOutsourcingandShareholderValue,Whyoutsource?Toincreaseshareholdervalue.,6,SeniorExecutivePriorities,7,Substantialmarketgrowthoverlastfiveyears;growthanticipatedat9%through2007.IBMisamarketshareleader.,SOisaMainstreamITSolution,8,StrategicOutsourcingrepresentsamajorsourceofrevenueandprofitforIBM,9,Thestrategic(transformational)andconstraint(necessaryevil)segmentsarebecominglessprevalent.,CustomersaretendingtoviewITasasupportorenabler,10,Outsourcinghasbecomeacommonbusinessstrategy,11,StrategicOutsourcing:WhatistheValuefortheCustomer?,CostreductionAbilitytofocusoncorecompetenciesIncreaseavailabilityofspecificskillsandresourcesImprovestability,effectivenessandservicelevelsofITEnablerapidbusinesschange/expansionObtainaccesstoadvancedtechnologies&research,andtoindustry,businessandtechnologyexpertsPredictableexpensemanagementGaincontractuallycommittedservicelevelsFlexibilitytotransitiontothenextgenerationofinfrastructureandapplicationsBuildalongtermstrategicrelationship.forcompetitiveadvantage,12,UnderstandyourcorecompetenciesinlightofyourbusinessstrategyDeterminewhatportionsofyourportfoliotooutsourceIBMcanpartnerwithyourcompanyinavarietyofways-fromout-tasking,toselectiveoutsourcingofoneofmoreITfunctions,tofull-scaleoutsourcingSelectanoutsourcingproviderwhowillbuildastrongrelationshipwithyourcompanyIBMtakesarelationshipapproachthatensuresclearexpectations,allowsforflexibility,collaborativeplanningandmutualaccountability,ARoadmaptoSuccessfulOutsourcing,13,Asuccessfuloutsourcingrelationshipfocuseson:SettingclearexpectationsfortherelationshipattheoutsetEstablishingappropriategovernanceprotocolstoguidejointactionthatcandeliveronthepromiseoftherelationshipRecognizingtheneedtoadjusttherelationshipovertimeSharedriskandreturnMeetingservicelevele
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