DePaul University – School of CTI IS 371 Introduction to I.T. System Management Application Outsourcing Dave Galen 24 th February 2009

© 2005 Accenture. All rights reserved. IS 371 Introduction to I.T. System Management Application Outsourcing 2 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

© 2005 Accenture. All rights reserved. IS 371 Introduction to I.T. System Management Application Outsourcing 3 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.

© 2005 Accenture. All rights reserved. IS 371 Introduction to I.T. System Management Application Outsourcing 4 Accenture delivers its services and solutions through five operating groups… ACCENTURE ORGANIZATION MODEL Comm. & High Tech Financial Services Public Service ProductsResources 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

© 2005 Accenture. All rights reserved. IS 371 Introduction to I.T. System Management Application Outsourcing 6 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?

© 2005 Accenture. All rights reserved. IS 371 Introduction to I.T. System Management Application Outsourcing 7 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 What are the benefits to outsourcing? 3% 4% 6% 8% 12% 16% 17% 0%5%10%15%20%

© 2005 Accenture. All rights reserved. IS 371 Introduction to I.T. System Management Application Outsourcing 8 More CIOs are Turning to Outsourcing to Stay Competitive Business Process Outsourcing Infrastructure Outsourcing Application Outsourcing 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

© 2005 Accenture. All rights reserved. IS 371 Introduction to I.T. System Management Application Outsourcing 9 Why Outsourcing? Why Now? Lower Total Cost of Ownership Gain Greater Management Control and Flexibility Increase Value from Application Investments Improve Application Performance

© 2005 Accenture. All rights reserved. IS 371 Introduction to I.T. System Management Application Outsourcing 10 Sliding position indicates current client mindset Insource Offshore Staff Augmentation Onshore Staff Augmentation Co-Source Outsource Onshore Outsource Offshore Degree of Comfort with a Sense of Loss of Control Status Quo Fully leveraged model What is your Current View on a Sourcing Solution?

© 2005 Accenture. All rights reserved. IS 371 Introduction to I.T. System Management Application Outsourcing 11 Geopolitical Concerns Employee Backlash Customer Reaction Negative Publicity Legislation Severance Costs Political Pressure Market Reaction Union Pressure Competitor Criticism LowLevel of Concern High Diamondcluster 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 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!!!)

Application Outsourcing

© 2005 Accenture. All rights reserved. IS 371 Introduction to I.T. System Management Application Outsourcing 13 Companies are Bundling Outsourcing Services to Gain Additional Benefits Bundled Solutions Application Services Finance Services Infrastructure Services HR Services Learning Services Procurement Services Customer Contact Services Enterprise Data Management Services Industry Specific Services Today’s Topics

© 2005 Accenture. All rights reserved. IS 371 Introduction to I.T. System Management Application Outsourcing 14 Let’s Go On a Cruise!!

© 2005 Accenture. All rights reserved. IS 371 Introduction to I.T. System Management Application Outsourcing 15 Accenture’s Application Outsourcing Approach “Engine Room” “Casinos & Lounges”

© 2005 Accenture. All rights reserved. IS 371 Introduction to I.T. System Management Application Outsourcing 16 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?