IS/IT outsourcing services – basic RNDr. Stanislav Michelfeit To replace the title / subtitle with your own: Click on the title block -> select all the text by pressing Ctrl+A -> press Delete key -> type your own text IS/IT outsourcing services – basic overview 30.11.2018

Discussion Agenda Service Science Current ecomonic trends Definition of service Basic definition SSME Profesional IT/IS outsoursing services Outsoursing definition IT services development phases Cureent status of IT/IS outsourcing services Discussion IS/IT outsourcing services – basic overview 30.11.2018

The world is changing … IS/IT outsourcing services – basic overview 30.11.2018

Picturing Economic Evolution Delivery Form Products Services Machines, Chemicals Automotive Fashion Goods Consumer Products Tourism, Retail Transportation Construction Health Care Material End product For a sharper view: divide firms and sectors into four segments, based on product vs. service, and material vs. information dichotomies How big are these segments in a developed economy? Books, Magazines Computers, PDA’s Film, Music Software, Games Financial Services Radio, TV Telecommunication Legal, Consulting Information IS/IT outsourcing services – basic overview 30.11.2018 4

Why Now?: US GNP Today and in the Future From Uday Karmarkar: “Service industrialization in the global economy” Also author of HBR article: “Will you survive the services revolution?” Products Services 11% 30% Material Breakdown of the four quadrants in the US economy And this does not even count the informational part of the material manufacturing and service sectors! Plus: the employment figures are even more slanted towards the information and service components The biggest sector is Information Services sector More to the point, this is the way all developed economies will look in the future. How does ICT affect all these sectors? Different, but some common basic economic drivers 50% 9% Information IS/IT outsourcing services – basic overview 30.11.2018 5

The world became service system. Top 10 států dle pracovní síly (asi 50% světových pracovních sil v 10 státech) A = Zemědělství, G = Zboží, S = Služby Stát % WW Labor % A G S 25 yr % delta S China 21.0 50 15 35 191 India 17.0 60 17 23 28 U.S. 4.8 3 27 70 21 Indonesia 3.9 45 16 39 Brazil 3.0 24 53 20 Russia 2.5 12 65 38 Japan 2.4 5 25 40 Nigeria 2.2 10 30 Banglad. 63 11 26 Germany 1.4 33 64 44 2004 2004 U. S. So why this workshop. Well,m for one reason the world needs service innovations like never before. In the US alone, the last two hundred years have seen an almost complete reversal in agriculture and services – with manufacturing peaking around WW II. And quickly looking at the top ten nations by size of labor force we see they are just time delayed versions of the US economy. Interestingly, Adam Smith and Karl Marx both agreed one thing – services were a parasite on the rest of the economy. Nevertheless the rise of the information economy and the rise of the service economy have come hand and hand… and so now we ask, since we need service innovations, do we need a service science. I will argue, yes. If we are to understand the connection between innovation and productivity, we need a service science. Innovation is more than technology, it can be business model innovation, organizational culture innovation, process innovation ,and even demand innovation. All of these types of innovation can drive productivity, and a service science, properly defined, will shed light on the causal connection of innovation to productivity. Why service science? Growing dominance of all world economies. Service science may ultimately be about understanding how to boost human- technology productivity via four types of innovation. Source: http://www.nationmaster.com OECD reports Největší migrace pracovních sil v historii lidstva je součástí, daná urbanizací, globalní komunikací, cenou, růstem buznysu a technologickými inovacemi. >50% (S) služby, >33% (S) služby IS/IT outsourcing services – basic overview 30.11.2018

IBM’s perspective IS/IT outsourcing services – basic overview Chart: ''Reinventing I.B.M.'' I.B.M.'s decision to sell its PC business last week was another in a series of steps it has taken in recent years to transform itself from a company that mostly sells hardware and software to one whose main function is selling its expertise. Graphs track revenue breakdown, figures in billions 1982 OTHER Federal systems contracts, other: $0.9 SERVICES Information processing: $2.5 Maintenance: $3.9 SOFTWARE: $1.7 HARDWARE Workstations: $6.4 Peripherals: $8.7 Processors: $10.2 TOTAL: $34.4 1988 OTHER Federal systems contracts, other: $2.1 SERVICES Information processing: $4.5 Maintenance: $7.3 SOFTWARE: $7.9 HARDWARE Workstations: $11.3 Peripherals: $11.3 Processors: $15.2 TOTAL: $59.7 1994 FINANCING: $4.1 SERVICES General: $9.7 Maintenance: $7.2 SOFTWARE: $11.3 HARDWARE Original equipment manufacturing: $3.3 Workstations: $13.0 Peripherals: $5.6 Processors: $9.8 TOTAL: $64.1 1998 INVESTMENTS: $2.6 FINANCING: $2.9 SERVICES: $28.9 SOFTWARE: $11.9 HARDWARE: $35.4 TOTAL: $81.7 2003 INVESTMENTS: $1.1 FINANCING: $2.8 SERVICES: $42.6 SOFTWARE: $14.3 HARDWARE: $28.2 TOTAL: $89.1 (Source by Company reports)(pg. C6) http://query.nytimes.com/search/restricted/article?res=F10711FE34550C708DDDAB0994DC404482 IS/IT outsourcing services – basic overview 30.11.2018

Technology Innovation Social-Organizational Dnešní business vyžaduje více inovací a proto přístup ke službám musí být systematický a interdisciplinární Technology Innovation Business Innovation Business Management &Administration Science & Engineering Service Science Global Economy & Markets Social Sciences Social-Organizational Innovation Demand Innovation

T-Shape odborníci Business and Management Science and Engineering Economics and Social Sciences Math and Operations Research Computer Science & Info. Systems Industrial and Systems Engineering Business Anthropology Organizational Change & Learning Mají znalosti z celé řady oborů a minimálně v jednom z nich jsou jejich znalosti na velmi vysoké úrovni

IT – typický příklad oboru se zvýšeným zastoupením služeb IT přestává být specifickým prostředkem, stává se univerzálním nástrojem, službou, která realizuje stále širší škálu potřeb lidské společnosti , jak jednotlivců, tak organizací. Uživatel již většinou ani neví, nebo jen tuší, že službu realizuje IT (ITC) Výsledkem je, že stále více IT specialistů pracuje v této oblasti, klesají požadavky na existující specializace, ale vznikají požadavky na zcela nové,související s charakterem služby

Outsourcing - definition „Outside resource using“ Contractual relationship, which assign responsibility for some functional area to external resources It is delegation of some activities on specialized organization Company handover entire responsibility for certain activity to external supplier IS/IT outsourcing services – basic overview 30.11.2018

Outsourcing IT IT/IS Outsourcing is delegation of operation, maintenance and administration activities ITC IT/IS Outsourcing is prerequisite of industrialization/standardization of seservices Information services are dominant in advance economics IS/IT outsourcing services – basic overview 30.11.2018

Profesoři jsou na řadě jako další?

IT evolution stages 0 – 1982 1982 – 1999 1999 – Proper solution Standard solution 1999 – Outsourcing solution IS/IT outsourcing services – basic overview 30.11.2018

Characteristic and cost structure 0 – 1982 Characteristic Mainframes and terminals Punch cards data management Batch processing, proper application development Local cost (fix cost) High cost for development and maintenance of proper solution Dependence on lack of skilled resources High cost for availability and security IS/IT outsourcing services – basic overview 30.11.2018

Characteristic and cost structure 1982 - 1999 Charakteristika PC and PC Server Standard interactive application Data entered directly by users Internal and external cost (variable and fix cost) High investment to buy HW and SW Low recoverability (ROI) High cost for availability and security IS/IT outsourcing services – basic overview 30.11.2018

Characteristic and cost structure 1999 - Charakteristic Independence on HW (Shared datacentre) Standard services Distributed infrastucture External cost (variable cost) Only variable cost (performance pay) Independence on lack of skilled resources High availability and security IS/IT outsourcing services – basic overview 30.11.2018

Outsourcing trends Outsourcing by towers IS/IT outsourcing services – basic overview 30.11.2018

Types of outsourcing Personal outsourcing Complex outsourcing Staff and services providing Complex outsourcing Staff, services and all resources providing Partial outsourcing Staff, services and some resources providing Business process outsourcing (BPO) Services providing IS/IT outsourcing services – basic overview 30.11.2018

IT-enabled Services Custom Specialized Interactive Cultural Literature Theater Advanced Web sites Basic Web site Product Design Education Medical Diagnosis Technical Hot-line Technical Research Graphic Arts Call Center Legal Research Document Mgt Custom Software Data Management Commodity Standard Technical Off-line Technical Publishing Data entry Simple Complex IS/IT outsourcing services – basic overview 30.11.2018

Benefits and opportunities of outsourcing Economical – financial Clarity and cost reduction Personal Availability of skilled staff Administrative – factual Risk delegation on outsourcing supplier IS/IT outsourcing services – basic overview 30.11.2018

Service Level Agreement Basic specification, conditions and rules Service description, metrics, payment conditions Hard metrics availability, response time Soft metrics Quality of outsourcing services IS/IT outsourcing services – basic overview 30.11.2018

Discussion Thank you for your attention IS/IT outsourcing services – basic overview 30.11.2018