IBM Outsourcing Services

IBM Global Services IBM Outsourcing Services A powerful strategic tool for e-business 11

New challenges Sharpening competitiveness, improving customer service, increasing profits: outsourcing has emerged as a powerful strategic weapon for businesses worldwide. Until the last few years, outsourcing was mainly a tactical, cost-cutting manoeuver for offloading routine tasks and acquiring temporary manpower. Today, outsourcing is a strategic element in business transformation. At the centre of this transformation is the need to convert traditional business practices into an e-business model to reach millions of customers, suppliers and partners on the Web. The realities of today s marketplace - globalization, aggressive competition, mergers, acquisitions and an unpredictable world economy - have prompted organisations to embrace outsourcing as a strategic step in achieving business goals. In an increasing complex Web-based world, where demands for instant services is exploding, outsourcing becomes a means of survival. 2

Business transformation Various IBM and non-ibm surveys identified the key issues that drove outsourcing decisions during the last years. These surveys highlighted the strategic implications associated with outsourcing. Improve service level, focus on core business competencies, enhance IT effectiveness, supplement IT staff/resources, align IT strategy and business goals, improve overall competitiveness, reduce IT costs and head counts, improve shareholder value, share/mitigate risks, were among the most important decision factors. For years, outsourcing was more a matter of outtasking - hiring outside vendors to perform specific jobs or manage specific projects within a department of a larger organisation. The cost of maintaining staffs and upgrading skills every time technology changes tends to be prohibitive. The solution for many organisations is to seek an experienced outsourcing provider who can manage people and talents required to oversee various functions not only those related to information technology, but selected business processes, as well. More recently, companies around the globe have strategically transformed their business by outsourcing entire IT operations or business processes, such as human resources, logistics, customer relationship management, finance, etc. These organisations are discovering that outsourcing providers have dedicated skills and expertise to perform these functions more effectively and at a lower cost than in-house resources. In-house staff can be better utilised in other, more strategic areas, such as fortifying core competencies and pursuing new business opportunities. 3

A new emerging area of outsourcing can be traced to new enterprise resource planning (ERP) initiatives. Many ERP installations began as replacements for legacy systems that were not Year 2000-compliant. Without the necessary skills readily available inhouse, companies now are looking for help in managing these complex applications and extending them into the supply chain to derive the greatest return on investment. Application outsourcing is as such the next major trend in the outsourcing evolution. technology, will feed a continued strong demand for outsourcing. IDC analysis of the top 100 outsourcing deals reveals contract expenditures reached almost $56 billion in 2000. An other recent independent research project commissioned by IBM, The 21st Century Organisation, a Report on Strategic Partnering Trends in Europe, found that companies surveyed believe the biggest challenge they face in the next millennium is globalization. Those same companies cited outsourcing as one of the best solutions for addressing the globalization challenge in a shrinking world. Meanwhile, thousands of businesses joined the world of e-commerce, underscoring the urgency for changing business processes to accommodate a new and rapidly growing customer set. Companies are quickly learning they cannot undertake alone such a gigantic task. According a recent IDC report (Top 100 Worldwide Outsourcing Deals of 2000), the dynamic nature of our world, largely based on information 4

From strategy to reality A successful outsourcing strategy is not a matter of chance. To succeed in outsourcing ventures, companies should follow some basic guidelines: 1. Agree on the scope of the contract. 2. State at the outset what constitutes success. 3. Devise a contract that identifies the measurements to gauge performance. 4. Maintain a flexible contract, that each party can easily adapt to change without major confrontation. 5. Build a partnership that allows for negotiation and communication. 6. Share goals, risks and rewards. A successful outsourcing strategy is a matter of partnership. IBM Global Services uses the term "strategic outsourcing" to differentiate our services from the limited cost-reduction objectives of traditional outsourcing services. Working together, we can help you develop a flexible business strategy and focus on critical business objectives. Our strategic outsourcing services help you become more competitive by allowing you to concentrate on your business strategy. Our business and technical experts work with you to develop a management strategy that distinguishes between your core and non-core operations. As a leading provider of outsourcing services, IBM Global Services can assume responsibility for IT, and business functions and processes, enabling you to devote more time and resources to your core business. We believe that the IBM outsourcing approach can offer a lot of advantages: Predictable costs The outsourcing solution enables a company to plan for a precise budget, while maintaining flexibility in using additional or reduced resources at an agreed upon price. Proven Service Provider IBM is delivering already a lot of IT services and has proven his flexibility and capability. IBM Strategic Outsourcing has a proven track of UNIX (pseries), mainframe systems (zseries), SAP environments and AS/400 (iseries) environments, mainframes, NT and PC s and has built up the skills in both IBM and non-ibm platforms, and Application Management. 5

Fast Implementation IBM can implement the solution very fast whilst the customer can focus on strategic in-house tasks. Committed Service level agreements A complete solution with committed deliverables, which are defined in terms of an agreed upon Service Level Agreement. With an in-house solution, this is much more difficult to achieve, since there is no firm contractual relationship with the solution provider or it is difficult to sanction in case of non delivery. Flexibility Flexible evolution is one of the major advantages of the proposed solution: whilst the customer transforms its business environment, we will offer the support with the right skills to support its IT infrastructure. All our outsourcing agreements are dynamic and change as your business or environment changes. One stop shopping IBM is able to deliver a complete solution with building blocks that are available within and outside the company. IBM's technology leadership IBM has a proven state of record in the development and productive use of technology as needed by its customers. Reversibility IBM can sell a whole range of hardware, software and services. IBM is looking for a long-term relationship with their customers. Thus, if a customer chooses to end the outsourcing, this will not mean the end of the business relationship with IBM. IBM is more interested in keeping a healthy business relationship with the customer on a full range of products and services and will not want to stick on the outsourcing by all means. Experience IBM has a lot of experiences with comparable projects. Of course, the customer can give its people education in all of the concerned areas but it will be difficult to be able to count on the same level of expertise that IBM has. Management structure We put in place an operations management structure to provide the customer with a single contact for all problems and queries regarding the operations management of its environment. We propose to install a management structure to establish close communication links, increase efficiency in decisions and have flexible escalation procedures. 6

IBM Outsourcing services Outsourcing is not just data centre management. Flexible to meet your changing requirements, IBM Strategic Outsourcing can manage all or parts of your non-core business processes or technology operations, from selective outsourcing to fullscope system and network outsourcing and data centre management. IBM delivers a wide range of strategic outsourcing services, including: IBM IT Outsourcing Services IBM provides management and support for IT operations. Outsourcing contracts range from high-end server (host) operations and midrange services to distributed and desktop information technology services. Our customers range from large Fortune 500 companies to small and medium-size enterprises. Through world-class people, technology, processes and tools we form strategic partnerships with you. These partnerships allow you to focus on your core business, enjoying the quality IT services you need to grow and prosper. IBM Business Process Management Services IBM teams manage and operate your internal business processes. Leveraging technology and our industry and process expertise, we provide design, development, implementation, operation, and continuous improvement of both IT and business functions. IBM Network Outsourcing Services We can manage and operate enterprise networks. These agreements support wide area network-centric solutions (WAN) as well as local area networks management (LAN). 7

IBM Application Management Outsourcing Services IBM provides support to application development, maintenance and management activities. Hosting and/or deploying tools, techniques and consistent processes in centralised or distributed environments (client/server), we improve reliability and quality of your existing application portfolio. IBM Hosting Services for e-business We can design and run your Web pages and link your Web systems to your core business applications to furnish full e-commerce capability. Additionally, we can host trading networks to provide services that facilitate electronic trading between businesses and improve the efficiency of the supply chain. IBM NetWorkStation Management Services IBM offers customers complete, integrated user services encompassing advice, planning, procurement, preparation and delivery of hardware and software, training, support and maintenance, security and asset management, and administration of their distributed computing environment. IBM Customer Service e Centre Services The Customer Service Centre department (also referred as help desk department) provides a single point of contact to receive and manage all customer s requests (problem notification, information request, service request) across the entire range of services provided by IBM Service Delivery. 8

Strike force, experience and alliances As one of the world s largest business and IT services providers, IBM Global Services offers unsurpassed knowledge, skills, experience and capabilities. IBM revenues in 2000 totalled $88.4 billion, of which $33.2 billion in Global Services. During the first quarter 2001, services revenues, excluding maintenance, grew 21%. The source of our strength is our people - more than 160,000 professionals in over 160 countries - e-business consultants, IT specialists and industry experts who lead successful outsourcing engagements for companies around the world. Strategic Outsourcing is the fastest growing services segment within IBM Global Services. A dedicated group is in charge of marketing, sales and implementation of Outsourcing solutions. This group of experienced IT professionals has the critical mass, the knowledge and the skills in order to help the customers to build, integrate and operate those IT systems that make up a competitive business advantage. A lot of elements are unique to IBM Global Services and differentiate us from our competitors in the marketplace. Unrivalled technical knowledge We have massive research and development capabilities and multiple hardware and software laboratories. IBM owns about 34,000 patents wordlwide. In 2000, for the eight consecutive year, IBM has received more patents than any other company, outdoing the total of patents received by eight of his main competitors all together. 9

Impressive array of industry- specific solutions We bring to the table an unparalleled breadth of offerings and experience gained through our extensive portfolio of contracts. Many of them are integrated e-business solutions designed to help customers move beyond, merely having a presence on the Web to transforming core business processes across their enterprises worldwide. As a service provider we are not limited to IBM products and technology. We maintain over 600 supplier contracts to ensure that we have the widest choice possible. We satisfy your technological requirements, included platforms of major vendors like HP and Compaq. We are also committed to provide support for Microsoft products, particularly for Windows NT and Windows 2000, and, of course, for open source environments like Linux. Vast experience in all of these solutions gained over decades and tens of thousands of customer engagements, earning us a place at the customer's table as trusted advisor, a reliable vendor who follows through on commitments. 10

Outsourcing facilities To provide its customers with the fastest internet connections and highest servers availability, IBM has built key strategic campuses all over major European countries. IBM campus model is a multi-site location, interconnected with highspeed bandwidth, 5 to 40 km apart from one another in order to distribute risks, but logically managed and operated as single location. In order to assure constant availability to their clients, these campuses have been developed under extreme security standards. For more information To learn more about the outsourcing portfolio or other IBM Global Services offerings, contact your local IBM sales representative or visit: ibm.com/services/be Belgian campus sites are located in La Hulpe, Nossegem and Evere. Two other sites, located in Luxembourg city south, are providing high availability solutions on the Luxembourg territory too. Nossegem, fully enabled for latest technology, guarantees the highest level of reliability and security, thanks to the most recent safeguarding techniques. 10 km east from Brussels centre, it is ideally placed in one of the highest network connectivity area of Europe. 11

IBM Belgium Avenue du Bourget/Bourgetlaan 42 1130 Brussels 078/15.54.65 (French) 078/15.54.66 (Dutch) 360 385 385 (Luxemburg) The IBM Global Services home page can be found on the Internet at ibm.com/services/be. IBM is a registered trademark of International Business Machines Corporation. * The e-business logo is a trademark of International Business Machines Corporation. Other company, product or service names may be trademarks or service marks of others. References in this publication to IBM products, programs or services do not imply that IBM intends to make these available in all countries in which IBM operates. Any reference to an IBM product, program or service is not intended to imply that only IBM s product, program or service m y be used. Any functionally equiv lent product, program or service may be used instead. This publication is for general guidance only. Photographs may show design models. Copyright IBM Corporation 2001.