1. Automation, outsourcing and shared services:
Alternatives or complements?
Waleed Hanafi
November 5, 2001

2. Outsourcing Motivators
Outsourcing is the answer – what is the question?
Fear
Capability
Capacity
Cost
Complexity

3. Traditionally IT run as a cost centre
IT Governance
Traditionally IT run as a cost centre
Annual un-equal fight over budgets
Business managers unable to challenge IT professionals
“Alignment” becomes issue
IT staff do not feel part of the business
Effort to keep plant running may not be reflected in business performance

4. Money stays with the business
Models for Governance
First Principles
Money stays with the business
The consumption of IT services and products must be in control of business
Demand is managed through pricing
Transparency and clarity required to ensure IT costs are understood and controlled
Core infrastructure is Corporate, and funding should be outside the day to day competition for resources
Network, , voice, security

5. Mature Organization required to use Outsourcing
Have to be able to manage internal resources before you can manage external
Requires disciplined structure
Understand what services are required
Understand what form (quality, quantity, performance) services take
Service Definitions
Service Catalogue
Service Level Agreements
Contract for Service

6. Escaping from Projects
IT people buy stuff
IT people run projects
When projects fail, or stuff doesn’t work, IT people run bigger projects
We don’t need another hero
Drama queens and adrenalin junkies
By changing mind-set to services, we accept that there is an on-going requirement
Boring and successful

7. Dealing with Shared Services
No real mystery
Already buy electricity, dial tone, water, garbage collection
Either we know what we want, or the industry has to be very clear about what it delivers – standards
IT Vendors have refused (so far) to accept normal commercial practices (quality, warranty, responsibility, pricing)
Shared Service vendor adds a layer between IT vendors and you

8. We all understand what a phone is, but what is a data network?
The Great Dilemma
The person buying the service must be able to understand the service being delivered
We all understand what a phone is, but what is a data network?
Is there competitive advantage in maintaining technical expertise?
How do you stay current when the outsourcer is doing all the work?
How do you attract and retain top people when they don’t get to play?