1. IS/IT outsourcing services – basic
RNDr. Stanislav Michelfeit
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IS/IT outsourcing services – basic overview

2. 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

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

4. 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 4

5. 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 5

6. 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:
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

7. 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 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: $ TOTAL: $ OTHER Federal systems contracts, other: $2.1 SERVICES Information processing: $4.5 Maintenance: $7.3 SOFTWARE: $7.9 HARDWARE Workstations: $ Peripherals: $ Processors: $ TOTAL: $ FINANCING: $4.1 SERVICES General: $9.7 Maintenance: $7.2 SOFTWARE: $ HARDWARE Original equipment manufacturing: $3.3 Workstations: $ Peripherals: $5.6 Processors: $9.8 TOTAL: $ INVESTMENTS: $2.6 FINANCING: $2.9 SERVICES: $ SOFTWARE: $ HARDWARE: $ TOTAL: $ INVESTMENTS: $1.1 FINANCING: $2.8 SERVICES: $ SOFTWARE: $ HARDWARE: $ TOTAL: $ (Source by Company reports)(pg. C6)
IS/IT outsourcing services – basic overview

8. 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

9. 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

10. 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

11. 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

12. 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

13. Profesoři jsou na řadě jako další?

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

15. 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

16. Characteristic and cost structure
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

17. 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

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

19. 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

20. 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

21. 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

22. 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

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