1. OUTsourcing

2. Outsourcing & Strategy Correlation
Business Decision Drivers
Defending competition
Cost cutting
New product/service innovation
Better quality management
Prospectors – strengthen or create competition
Core competency development
Leverage internal strengths
Close internal weaknesses
Analysers – niche positioning
Best Value for Money
Efficiency
Value adding

3. The What, How much, Who & Where
What services/infra are to be outsourced?
How much of ICT to be outsourced?
Who to outsource? One or more providers for which services/infra
Where to outsource? In country, out of country, combination

4. Decision Criteria Presented
Cost efficiency goals
Protecting capacity building of core competencies (strategic service oriented products)
Covet Political / Power Play agendas (Pfeffer’s Political Model):
Info hoding & selective use
Formal (but steered) decision criteria
Delegate to consultants (external people) to steer & recommend
Building allies – groupthink decision making
Intended internal Resource Development Capacity
Directed orders from the top (agency theory)

5. Telstra Value Chain – Outsourcing Value Activities : all or part of

6. Build Data Centre or Outsource?
Case Study
Blue Energy
True Energy
IT Unit
Hosting TE’s systems
CEO
(Markus)
CFO
(Adel)
CIO
(Gordon)
CFO
(Maria)
Like
Build Data Centre or Outsource?
IT Unit
CIO
(Gordon)
Like
Consultant
(Pamela)
Like
IT Unit
Decision: Manuf & Financial system same as parent coy