Effective Outsourcing Strategies Featured guests George J Atis

Effective Outsourcing Strategies Featured guests: George J. Atis Dan Mc. Lean

Slide Menu § 2002: A year in review § The Outsourcing Topology § IDC Survey data § Client-side methodology § Vendor-side methodology § Contacts

2002 – A Year in Review Canadian outsourcing market was strong in 2002 Many Canadian contracts appeared: § $2. 2 B Canada Post and CGI § $1. 3 B CIBC and HP Services (but doesn’t really count) § $700 M Bombardier and CSC § $660 M OPG and CGE&Y § $535 M Manulife Financial and IBM GS § $250 M Sun Life and IBM GS § $200 M Desjardins Group and CGI § $200 M Alcan and CGI § $160 M Stelco and EDS Typically five- to 10 -year contracts

The Outsourcing Topology Drivers Increase Efficiencies Too risky, too uncertain Keep up With Rapidly Advancing Technology Can’t bring IT back in-house - if I want Refocus Critical Resources Complexity: what to outsource Reduce or Stabilize Costs Losing control ss ne si ess Bu roc P Eco mme rce Proc e Serv ssing ices Network and Desktop Operations re nt Ce sk ll De Ca lp He tre en ing a C rc at sou D t Ou Inhibitors Application Development ns tio ing ica c pl our Ap ts Ou

Activities Currently Outsourced N=100; Q 16. Which of the following activities do you currently outsource? Source: IDC Canada, 2002

Determining Factor in Organizations’ Decision to Outsource Activities N=100; Q 18. What event ultimately prompted – or would prove to be the determining factor – in your organization’s decision to outsource an activity? Source: IDC Canada, 2002

Benefits derived from outsourcing – a match N=177; A 04. What do you perceive are the top 2 benefits/value derived from outsourcing? Source: IDC Canada, 2003

If Outsourcing, Organization Prefers to Retain Control Over… N=177; A 07. If or when considering to outsource an aspect of your business, what ONE aspect of control of your outsourcing arrangement do you prefer to retain? Source: IDC Canada, 2003

Thoughts If a customer does not have a clear understanding of IT costs, then they should not outsource. Is there a trend towards dealing with advisors and brokers? Would they be helpful to you? General rule in outsourcing is have an exit strategy: - Are you equipped to take over when the contract expires - Be vigilant in measuring performance and value What’s in store for IT service providers in 2003? - Are telcos still targeting IT services? There’s evidence to suggest some are looking to retrench into familiar territory. Bell, Aliant, Telus. - Consultants also want to be outsourcers – Accenture, CGI, Bearing Point - One-stop shops

Contacts George J. Atis George. Atis@mcmillanbinch. com Partner; Chair of the Outsourcing Practice Group Mc. Millan Binch LLP Dan Mc. Lean dmclean@idc. com Director, Outsourcing & IT Utility Services Research IDC Canada John Pickett jpickett@itworldcanada. com VP; Editor-in-chief, IT World Canada Inc. Mark your calendars: Toronto, May 5, 2003 Info and registration at: www. itworldcanada. com/events