Business growth with outsourcingIBM Outsourcing UK

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Contents

Joe Neary 4 Introduction Chris Wilson 6 The portfolio of outsourcing offerings

Clive Harris 8 The globally integrated enterprise

Paul Hart 10 Effective governance

Robert Pearce 12 Service Management Integration

Clive Harris 14 Innovation through outsourcing

Gary Kyle 16 Global delivery

Tony Morgan & Ian Brooks 18 Outsourcing for a greener business

Jessica Douglas 20 Outsourcing for financial services

Andy Brierley 22 Outsourcing for media and telecom companies

Steven Peel 24 Outsourcing for local and regional government

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the maturity, flexibility, expertise and technical capability to meet your requirements, you can realise that elusive strategic alignment of IT and business that enables the agile provision of business priorities.

Responding to rapid changeMany organisations spend a large amount of their IT budgets struggling to maintain their legacy IT systems. This limits the organisation’s ability to respond to emerging business and technology developments as it soaks up both finances and people’s time. Allowing a trusted partner to manage your legacy systems frees up resources, which can be devoted to new developments that support the future and the growth of your business.

Business leaders are increasingly re-examining what should be considered a core competency by their organisations and are seeing the sense in using partnerships to leverage expertise. While outsourcing is often driven by cost considerations, it actually offers a much broader range of benefits.

An opportunityAdvances in technology are radically changing the way that business is carried out. Increasingly, organisations are recognising that they can improve their competitiveness by accessing the skills and resources they need from a lower-cost area. Often – provided there is reliable and trustworthy management closer to home – it doesn’t matter where in the world those skills and resources are located.

While some companies with global reach are establishing their own shared services centres in cost-effective locations, others are forming strategic outsourcing partnerships with global players in order to gain access to the wealth of global talent available to businesses today.

Outsourcing can enable your organisation to see beyond traditional geographic limits and use the best of the world’s resources to drive the business forward.

Keeping sight of business strategyBusinesses want their IT strategy to be driven by their business strategy but many find themselves unable to execute this to the level and at the speed required because of limited in-house IT capability. By outsourcing the delivery of your IT to a partner with

Introduction

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Local and global, large and smallToday’s business and IT agendas are fast changing and challenging. From increasingly stringent security requirements to pressure for carbon reduction, it can be difficult and financially burdensome for organisations to keep pace. A mature outsourcing partner with years of process intellectual property and technology experience, combined with a breadth and depth of cross-industry experience, can be of real benefit.

While it may not be economic for you to continuously invest in keeping up with the latest IT trends, an outsourcing partner, whose core competency is IT, has the economies of scale to do so, providing clients with the associated benefits.

With a very significant services operation based in the UK, complemented by our unparalleled global delivery capability, IBM is well placed to provide the cost and competitive benefits that are right for your business.

We have a proven depth of experience and expertise across the whole breadth of outsourcing services. This brochure introduces many of the ways we can help you address today’s business challenges.

Joe Neary, Vice President, Strategic Outsourcing, UK & Ireland

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Chris WilsonOfferings Leader, Strategic Outsourcing

As an industry pioneer in delivering strategic outsourcing services, we can provide you with the nuts and bolts as well as the end-to-end solutions. This includes everything from infrastructure management (e.g. servers, desktop, network, helpdesk, storage and Web hosting), and applications (e.g. portfolio management, on-demand application support), to business processes (e.g. Human Resources (HR), Finance and Accounting (F&A)) and financing.

Full scopeSo, if your company is seeking a partner to provide full-scope infrastructure management of its IT environment, IBM can do it – even offering additional specialist application support for systems such as SAP, Oracle, or PeopleSoft; messaging software (e.g. MS Exchange); managed business process support for F&A, HR processes, payroll and so on; plus services on top.

Or, if you are seeking a smart-sourcing partner to look after your server estate for example, IBM can take it on – whether by managing the servers on your own site or moving the service to an IBM location; or by giving your company access to IBM’s shared infrastructure – so that you pay only for the IT services your business needs.

If you need a partner to integrate your services, or if you’ve simply run out of space and need someone who is willing to put a roof over your server’s head, IBM can take this on.

Sizing up IBM’s Strategic Outsourcing solutionsWhen it comes to solutions for IT outsourcing, it is clear that one size definitely doesn’t fit all.

Some companies want to rid themselves of their IT ‘pain’ completely by outsourcing whole systems, services and people to the specialists, leaving themselves free to focus on core business. Some feel they can’t keep pace with technology, or they want an IT service that can shrink or grow with them. Others are concerned about their IT carbon footprint.

There are some who are happy with the majority of their IT, but just can’t get the helpdesk or server environment right and want to outsource only that element – a practice that Gartner calls ‘smart sourcing’.

Enhanced business outcomesA Gartner survey1 from early 2008 shows that 47% of respondents cite cost savings as being the primary benefit expected by companies who outsource (down from 59% in its 2005 survey); but 41% of organisations are seeking enhanced business outcomes as the primary benefit.

There are many reasons why companies choose to outsource their IT –

whether it’s the whole infrastructure, or just a small part of it. The range of

outsourcing options available from IT service providers can be daunting and

complex. But with IBM as your partner, you can discuss and decide which

is the right choice for your business from the whole range of strategic

outsourcing solutions available – from server hosting right up through

all the options to full IT transformation services.

The survey also found that while outsourcing drivers tend to be business related (perhaps following poor business results, a merger/acquisition, or a change of CIO/CEO), the inhibitors tend to be IT related or ‘emotional’. These include concerns about data security, and loss of control – the top inhibitor cited in Europe, Middle East & Africa.

IBM: open to allBut whatever the challenge or market pressure that drives your business to consider outsourcing; whatever the benefits you expect or the fears you may have; and whatever the size of the burden you may wish to offload; we can help you come up with the right solution to meet your outsourcing needs.

Our outsourcing is suitable and effective for all companies, regardless of size. And it doesn’t matter if your company’s technology was provided by another supplier, we support all vendors’ hardware, and are very willing to work with all business partners in the IT industry.

The portfolio of outsourcing offerings

1 Source: Gartner. User survey analysis. What global buyers want, need and believe about IT outsourcing. Jan �008

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Bespoke or off-the-shelfThere will always be companies with a business-critical need for a dedicated service. IBM’s answer is the Integrated Command Centre – the ultimate bespoke solution, comprising a dedicated team of people, working from a single location to deliver a premium service.

But for companies with no need of a bespoke solution, IBM offers the managed hosting approach – standard off-the-shelf solutions running on predefined hardware, at a preset price which can represent savings of up to 50%.

IBM also offers managed storage solutions charged on a utility-per-gigabyte basis.

Green benefitsEnvironmental benefits can be achieved by companies moving servers to IBM’s energy-efficient data centres, or by getting IBM to consolidate the server estate onto fewer midrange servers or one mainframe, or to use virtualisation.

IBM can even offer a unique mainframe shared utility service – the chance to rent space on one of IBM’s machines, and make savings of up to 40%.

TransformationOn top of all this, IBM has the skills and experience to help a company to transform its IT, ranging from a technical transformation (such as data centre consolidation) through to a business transformation (process and organisational change), all supported by consulting services.

So, when it comes to solutions for IT outsourcing, one size definitely doesn’t fit all – but IBM does have the solutions to fit all shapes and sizes.

Defining the globally integrated enterpriseGIEs are able to enter new markets and seize new business opportunities rapidly, wherever they arise. They shape their strategy, management and operations in a global way, locating operations and functions in whatever location provides the right cost, the right skills and the right business environment. By integrating their operations horizontally and globally, work can be moved around the world with greater ease.

The behaviours that help GIEs thrive include:

• Securing specialised skills from a broad network of providers

• Using infrastructures, applications, people and other assets wherever they reside to gain the best, most economical results

• Enabling systems and platforms for an open, collaborative work environment and welcoming opportunities for external collaboration

• Adopting the global values, skills and processes needed to operate seamlessly across organisational, cultural and geographic boundaries

• Managing the risks associated with doing business in an open environment.

Over recent decades, a profound economic shift has been brought about by the convergence of a number of developments – the lowering of barriers to free trade and investment, a revolution in global network communications and a steady movement towards open standards in technologies and business processes. The result is globalisation on an unprecedented scale.

A number of modern corporations are following an evolution path through three distinct business models. The first was the ‘international model’ of the 19th century where most operations were centred in the home country with overseas sales and distribution. This was followed by the ‘multinational’ model of the 20th century. To gain access to local markets, the multinational created smaller versions of the parent company around the world. Today that model is too expensive, inflexible and inefficient so IBM and some other businesses are moving to a new model: the globally integrated enterprise (GIE).

As the world becomes more connected and more accessible, businesses

face both opportunities and threats – every market is up for grabs. Today’s

business models must facilitate faster and more extensive collaboration

on a worldwide scale, while enabling rapid reconfiguration as new

opportunities appear. We have developed a global delivery model and

a wealth of experience to help our clients with their varied globalisation

requirements.

• A Hong-Kong based retailer of clothes has its largest market in the USA, and orders cotton in Cambodia and manufacturing in Pakistan. Between 199� and �00�, revenues grew at a compound annual rate of ��%. This global way of doing business is matched by a global way of doing IT: IBM provides the IT infrastructure from whichever country is the most appropriate, with the right skills at the right time

• A major bank wished to become more global in its business and operations. As part of a worldwide outsourcing engagement, IBM helped to put in place global processes to define and deploy the bank’s global standards and to leverage resources and skills wherever this was most appropriate

• IBM itself is a globally integrated enterprise. With �� manufacturing locations, eight major research and development centres and solutions and service centres throughout Asia, Europe and the Americas, IBM uses the resources it needs for its own use – and makes them available for its clients in 1�� countries – by using the skills it needs, regardless of geographic location.

Clive Harris Distinguished Engineer, Global Technology Services

The globally integrated enterprise

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The role of outsourcingFor the GIE, outsourcing provides more than access to resources from low cost areas of the world, and GIEs don’t restrict outsourced operations to non-core functions. They see outsourcing potential across their entire operation and recognise that it can help drive business transformation.

This open-minded approach to outsourcing is enabling companies to manage their operations, expertise and resources more fluidly through access to a network of global talent and resources. While cost pressures are still a major factor, GIEs also focus on the value creation and revenue opportunities that outsourcing can deliver. They look to secure strategic relationships with partners that can enable them to trade in global markets and provide them with the shared technologies, open business standards and know-how needed to drive global integration.

Companies are turning to outsourcing to reshape themselves, passing to partners the processes and operations that no longer differentiate them and tapping into other providers’ expertise for the skills and services they need.

As a business expands into global markets, outsourcing offers access to instant capacity, not just in IT but also in processes that are globally scalable. This might involve the supply chain or call centre support. Whatever the requirement, outsourcing can provide just-in-time capacity for evolving business need. And IBM can provide one global contract if required.

GIE leadershipOver a number of years, IBM has been undertaking a programme of initiatives that have enabled us to become a globally integrated enterprise and a showcase for our clients. We are tapping into skills and expertise all over the world and have integrated our operations horizontally and globally.

IBM’s GIE business model directly benefits our clients by enabling them to:

• Integrate – placing resources under a global enterprise leader

• Automate – eliminating steps which do not add value and using tools and technology to streamline the workflow

• Optimise – deciding where each process is best performed – locally, regionally, globally

• Elevate – moving resources to work that adds higher value in order to drive further efficiency and effectiveness.

Using resources from around our own global enterprise, IBM is helping a growing number of organisations on their way to globalisation, no matter what pace and direction that takes.

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“ Eighty-five per cent of CEOs plan to partner to capitalise on global integration opportunities – more than half plan to do so extensively. We also found that out-performers are 20 per cent more likely to partner extensively than under-performers.” The Enterprise of the Future – IBM’s Global CEO Study 2008

Paul Hart Governance and Relationship Alignment Practice, Global Technology Services

Outsourcing can enable cultural change within an organisation. It can be a sensitive area, sometimes engendering strong emotions. The way the two parties work together – the behaviours they exhibit, the way people interact and the environment they create – has a major impact on the success of the contract.

The Governance FrameworkTo get more out of outsourcing, organisations are increasingly opting for a collaborative relationship with their outsourcing service provider, where both parties work together to direct, manage and monitor the provision of services. The relationship between the client’s retained management organisation and the outsourcing provider needs to be clearly defined, with jointly agreed functional ownership, roles and responsibilities. These should be documented and publicised to facilitate informed and effective decision-making.

The components of successful outsourcing partnershipsOnce an organisation has made the strategic decision to outsource, and confirmed the scope of the outsource, the next big question is: how do they want to work with their chosen provider? This decision could make the difference between successful and valued outcomes or failure to achieve expectations.

How you work with your provider shapes the long term relationship which drives the overall culture, direction, behaviours and attitudes of everyone involved.

Successful outsourcing partnerships are based on relationships which are meaningful and valued by both parties, and are continually aligned with and driven by business strategy. The components of IBM’s Outsourcing Relationship Model encourage a healthy, productive relationship which consistently delivers services that reflect business needs and addresses the changing dynamics within the business.

Effective governance fosters trust and confidence and provides the management controls to ensure expectations are met. It also forms a context in which business activities, including managing, take place.

Outsourcing relationships are much too important to be left to chance. They

have to be carefully developed and managed in order to establish strong

foundations for success and the realisation of value. A significant contributor

to this success is a common and shared understanding of both the spirit and

expectations of the relationship through effective governance.

This context sets clearly defined boundaries, roles and responsibilities for organisational activities, and these boundaries guide individuals to assess whether their actions are appropriate within the context of what is desired overall (often expressed as a ‘Charter of Co-operation’ or ‘Ways of Working’).

We recommend Relationship Alignment as a fundamental and prerequisite component and enabler of successful outsourcing. A clear statement of intent, and the corresponding relationship – governance foundations, help to focus and define the direction and pace of the relationship. These relationship drivers should be further emphasised when creating The Governance Framework: relationship intent, joint decision- making protocols, communication and consultation protocols and the relationship review processes.

Effective governance

Effective governance fosters trust and confidence and provides the management controls to ensure expectations are met.

To get more out of outsourcing, organisations are increasingly opting for a collaborative relationship with their outsourcing service provider.

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By establishing a set of joint organisational protocols, both organisations are explicitly asserting the manner in which they want to work together. These protocols reinforce the message that governance is shaped by mutually desired outcomes, and that working collaboratively is a key relationship principle.

Organisational protocols guide actions toward exemplary and productive practices, counteract unfavourable perceptions and avoid the pitfalls of ineffective decision-making, lack of clarity, inappropriate behaviour and possible organisational friction.

The relationship and organisational protocols need a framework. Having an effective Governance Framework in place – a sustainable, formal, disciplined management framework – is one of the key enablers of successful outsourcing. It instils a culture of proactive management that drives informed decision-making, mitigates risk, and creates value. However, organisations will often focus on only one or two aspects of governance (e.g. meeting structures) and ignore the wider relationship aspects.

Having an effective Governance Framework in place is one of the key enablers of successful outsourcing.

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IBM has extensive experience in developing and maintaining effective governance models. It has been part of the company’s strategic outsourcing management solution from the outset, and the concept applies equally to global, multinational, midsize or small company outsourcing relationships. In fact, IBM prefers to have a jointly agreed Governance Framework developed and in place before a contract is signed to drive the smooth and timely transition of services within the outsourcing process.

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Understanding your issues Many organisations are aware that their end users are experiencing a less than perfect service, but they are not always able to identify the root causes. Once an organisation has outsourced much of its IT, the retained IT organisation can be relatively small. Over time, this team can be challenged to find the critical supplier management and technical skills needed to manage complex and constantly changing requirements, especially in a multi-sourced IT environment.

Outsourced functions, whether for application development, distributed IT, management of centralised servers, or any other environment, have often evolved with service levels set up around their own service provision. Individual services might seem to be operating efficiently in their own right, meeting or even exceeding service level obligations. But in many cases, services from the business or end user’s perspective simply do not fully align, resulting in service ‘bottlenecks’ through which service provision suffers.

Integration aligns IT and business strategyIn the past, a company might have outsourced some or all of its IT to a single vendor. Today, many organisations find themselves sourcing IT services from multiple vendors, often driven by a history of mergers, acquisitions, procurement policy or devolved decision-making in different divisions.

The resulting complexity in the IT service delivery structure can mean the retained IT organisation struggles to deliver a consistent quality of service that aligns with the business strategy and meets users’ expectations.

Service Management Integration is increasingly being used as the means to establish a business perspective on the services provided, re-align fragmented IT service environments and improve the quality of service experienced by end users.

Service Management Integration undertakes the management and co-ordination of people, service management processes and tools across all service delivery organisations to manage the delivery of an end-to-end service. This aims to deliver consistently improved levels of service through standardisation and integration of governance, processes and automation tools across component services and suppliers.

For example, IBM provides Service Management Integration to one of the UK’s largest commercial insurance companies. IBM is accountable for managing all aspects of the client’s day to day IT service operations, whether delivered by IBM or a third party. For certain key suppliers contractual responsibility remains with the client but IBM is responsible for managing the service and meeting end-to-end service level targets on the client’s behalf. IBM works with the various service vendors to deliver a single service view.

As service issues arise, IBM works with the appropriate service provider to pinpoint and resolve problems to protect or recover the affected service. This independent and collaborative Service Management Integration function operates to clear and agreed governance and processes that all parties understand. This helps to avoid ‘finger pointing’ between vendors and minimises escalations as an overhead to the client. Service experienced by end users has improved and left the client with more time to concentrate on core business needs.

Service Management Integration

Robert Pearce Service Integration, Business Development Executive

Sourcing from multiple suppliers has become common in business today.

However, this can result in an increasingly fragmented and challenging IT

service environment to manage. Service Management Integration provides

a means to regain control, align the infrastructure to business requirements

and improve service to end-users.

Service Management Integration is increasingly being used as the means to establish a business perspective on the services provided, re-align fragmented IT service environments and improve the quality of service experienced by end users.

Creating a bridge between business and ITIBM Service Management Integration can help. It encourages clear, integrated architectural standards and disciplines applied to all service elements. All parties agree how to achieve high quality service delivery by adopting best practice open standards, such as CoBIT and ITIL processes, for service management governance and management systems.

Working on behalf of or alongside the client’s retained IT team, IBM can help to re-establish a single point of responsibility for delivery of IT service to end users; and provide flexibility in support of future IT sourcing decisions.

Once an organisation has outsourced much of its IT, the retained IT organisation can be relatively small. Over time, this team can be challenged to find the critical supplier management and technical skills needed to manage a complex and constantly changing requirement, especially in a multi-sourced IT environment.

Rob Pearce, Business Development Executive for Service Integration, explains: “IBM has the deep service management expertise, with operating frameworks, processes and governance structures already defined, to manage multiple service providers, ensuring that a good, consistent service is delivered to end users. This can free clients’ retained organisations to add greater value by focusing more on core business activities.”

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Our culture of innovation is driven from senior executive level, and the last three years have seen IBM appearing among the top most innovative companies as chosen by BusinessWeek.

We can provide innovation across the lifecycle from initial thought leadership, through to the actual delivery of an innovative solution.

One size doesn’t fit all There’s often a perception that only large organisations with equally large budgets can benefit from innovation programmes. This isn’t the case. We tailor our approach to match client size, skills, business strategy and available resources. Successful innovation programmes don’t need to be a long-term commitment, they can be run for a limited time to address a particularly pressing business need or to match personnel and resource availability.

Whether you simply want us to brief a steering group on business trends and future technologies, or you require the creation of a physical innovation centre equipped with showcase technology, where teams can be brought together to concentrate solely on innovation projects – we can create a programme that works for your particular circumstances.

Partnering for innovationThere’s no one definition of innovation in business and it’s not necessarily about inventing new and complex solutions. Very often there’s a simple answer to a challenge and the innovation needed to solve it. Innovation is not something that can simply be bought, however, it’s a creative process that needs to be nurtured and managed.

Through experience, we have developed a systematic approach along with a range of tools and techniques that enable and support this creative process and steer good ideas rapidly through to the delivery of innovative solutions. Global Innovation Outlook, for example, is a process built around a series of dynamic, free-form brainstorm sessions while our High Performance On Demand Solutions Lab delivers innovative, first-of-a-kind solutions requiring enormous computing capacity, high scalability and development agility.

As organisations face an accelerating pace of change, innovation is

becoming a critical factor in the drive to deliver customer value. Here at IBM,

innovation is a key differentiator that has become part of our everyday life.

Many clients tell us that they greatly value the way that our innovation helps

them expand their core business, gain entry into new markets or simply

become more efficient. Increasingly, clients want more from an outsourcing

partner than service delivery with a ‘safe pair of hands’ – they want greater

value and innovation.

When a client wants us to help them deliver and drive innovation, we usually establish a clear innovation management model that defines our joint approach. Such a model, which is all about partnership, commitment, resources and governance, fits easily into an outsourcing engagement while greatly improving the impact on an organisation’s goals.

What can IBM offer as an innovation partner?In addition to our leading-edge technology and industry solutions, we have a world-leading research and development capability, where we spent over $7 billion last year on a wide variety of innovation initiatives. Around 3,000 IBM scientists and engineers (including five Nobel Laureates) work in eight research laboratories across the world in fields ranging from deep computing to e-commerce and pandemic management to carbon reduction. Through an initiative known as First Of A Kind, clients can partner with our research teams and link into an existing research topic to help address their business issues.

Clive Harris Distinguished Engineer, Global Technology Services

Innovation through outsourcing

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Delivering innovation systematicallyWhen working with clients on innovation, we often use an approach that involves setting up a Value Creation Centre (VCC) or Innovation Team. This is a small group of people from IBM and the client formed to drive brainstorming and workshop sessions that identify and develop innovative business ideas. Based upon priorities created with senior management, the team defines detailed solutions, commissions prototypes and carries out risk reduction investigations leading to the development of a full business case.

This approach has delivered a number of innovation solutions for a variety of clients. One such client is a leading international bank. When the bank wanted to reduce the cost of the infrastructure supporting its Automatic Teller Machines (ATMs), for example, it challenged the VCC to find cost reductions of €4 million. The VCC ran a series of workshops with bank employees in different regions and identified 250 ideas for reducing costs. These were evaluated and the top 12 pointed to potential savings of around €14 million. The VCC began a programme of projects that has saved around €20 million to date.

Tools to access collective intelligenceTapping into the ideas of your employees, partners and customers is an important part of developing innovative solutions. Our Human Capital Management group has led the way in this area with Innovation Jams, which allow successful collaboration across lines of business, regions and organisations.

Innovation Jams are online forum discussions – typically run over a period of one to three days – that are tightly managed and enable senior executives to engage with participants on two or three questions or challenges.

They enable large-scale collaboration, which is particularly productive for generating innovative ideas.

Proven track recordHere at IBM we have a track record of delivering innovation. Based on a repeatable approach that can be tailored to suit individual needs, clients gain access to the unequalled breadth and depth of IBM’s innovation capability – from our industry thought-leadership driven by the IBM Institute for Business Value, through our world-leading research and development capability to our expansive product and services portfolio.

As part of an Innovation Sourcing programme with a well-known airline, we worked with their marketing group to investigate ways of extracting added value from the customer travel and purchase histories’ database. A team from our Zurich Research Laboratory developed and refined mathematical modelling and optimisation algorithms to investigate the data. Collaboration with an IBM partner led to the development of a prototype for IBM’s Customer Equity Management solution. This quickly provided an 80% accuracy rate for predicting the eventual value a customer represents.

The solution can reduce marketing costs by up to 20% through better-targeted campaigns whilst improving campaign response rates to boost revenues. By forecasting future travel decisions, the solution will also improve the airline’s customer satisfaction.

A large county council held a two-day Innovation Jam using IBM Human Capital Management expertise and technologies to engage senior managers in an online exchange of ideas about internal culture and service improvement. The jam created a wealth of quality ideas about how to develop an innovative culture within the council and continuously improve services.

Gary Kyle Integrated Technology Delivery, Global Technology Services Europe

In addition, IBM’s strategic involvement in research and product development means that we anticipate where changes are happening and ensure we have the right skills to address them. So as your market evolves and your requirements change, IBM is likely to have the new skills you need.

Geographically transparentIBM has around 20,000 staff in strategic global delivery centres in India, China, Argentina, Brazil, South Africa, the Czech Republic, Hungary and Ireland. These resources can deliver the full range of technical skills across the full spectrum of client environments. Your company can access experience and skills representing most technologies (such as server, storage, distributed, contact centre, network and security domains); platforms (such as heterogeneous UNIX®, Wintel, Linux®, Mainframe and CRM/ERP business application suites); databases (such as DB2®, Oracle, SQL, Sybase, Informix®, IMS); and middleware tools and products (such as IBM WebSphere® and MQ).

For example, IBM worked with a worldwide drinks company and its key suppliers to consolidate its many SAP instances around the world into a single global SAP ERP instance hosted at a central IBM data centre in the UK. IBM also set up a worldwide SAP Command Centre in Bangalore, India to provide 24x7x365 support across a wide range of technical competencies, from server and storage management to SAP BASIS. Bangalore is also a service

To survive and thrive in these uncertain times, organisations are increasingly looking to optimise their operations and improve their time to market.

Whether you call it global delivery, global sourcing or global resourcing, you can prepare your organisation for the demands of transformation through the worldwide integration of business, people and technology.

Whatever the size of your business, you can resource your individual needs from IBM’s Global Delivery Model. This applies whether you require the full scope of services across multiple business lines, or a simple, specific outsourcing service.

IBM provides a flexible, cost-effective approach to addressing rapidly changing business conditions by accessing a pool of global resources.

High-quality skillsIf your business is coming under increasing pressure to optimise budgets to support your business growth, or you are seeking infrastructure flexibility and responsiveness to deliver competitive advantage, Global Delivery can help. It offers the talent and knowledge to address these growing pressures. As a client, your organisation would have

Global delivery is not simply about saving costs. It’s about adding value to

your organisation by helping to develop an IT strategy that will benefit your

processes, performance indicators and technology enhancement, and will

deliver compelling benefits to your business, suppliers, customers and

shareholders.

access to a full range of technical and functional business skills including project management, IT specialists, service management and business compliance resources, as well as service transformation and service operation from a network of delivery centres worldwide.

You can access our global workforce – regardless of where they are located physically – and deploy the right mix of skills to help improve the overall efficiency of your organisation’s infrastructure and its business processes.

IBM has first-hand experience of how to pull the right resources from the most appropriate locations at the right time for the most economical cost. The IBM Global Delivery Model provides high quality services that generate predictable and consistent results.

Global delivery

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If your business is coming under increasing pressure to optimise budgets to support your business growth, or you are seeking infrastructure flexibility and responsiveness to deliver competitive advantage, Global Delivery can help.

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desk environment, taking calls. IBM is responsible for complete end-to-end incident management across the drinks company’s other partners.

The consolidated SAP ERP environment delivers increased business agility, providing a platform for both organic growth and mergers and acquisitions. The Command Centre delivers global support and proactive management for continuous improvement in the availability and performance of the SAP environment. IT costs have been reduced by 20 per cent, and further savings are expected as the company leverages the Command Centre further.

StabilityWhatever your industry is, data privacy, European export regulations, legal and fiscal requirements are frequently a major concern. Clients have access to IBM’s global presence and diverse delivery base, coupled with our global transition methodology. We are able to provide your organisation with comprehensive strategies to mitigate these kinds of geopolitical risks.

To ensure a uniform delivery of services at regional and global sites, we employ consistent processes and methodologies and can transfer work around the globe effectively and efficiently with our robust worldwide infrastructure and transition methodology.

StandardisationTo mitigate project risks, we employ proven and consistent project management processes and infrastructure. To protect your intellectual property and sensitive data we offer a security-enhanced worldwide infrastructure. You can benefit from a high quality, uninterrupted service delivered through standardised processes and tools and the sharing of best practices.

IT costs have been reduced by 20 per cent, and further savings are expected as the company leverages the Command Centre further.

Global integration is supported by shared services with common standards. Clients with complex, multiunit businesses can achieve standardisation through IBM providing a set of shared applications, services and infrastructures to all their business units.

Global delivery is one way IBM helps companies standardise their operations. Clients can also capitalise on our depth and maturity of experience through IBM’s standard proposals, which build solutions based on standard toolsets and procedures.

Companies operate today in a challenging environment where both business and technology are changing at a rapid pace. IBM’s Global Delivery Model provides a safe, secure and progressive approach to addressing these dynamic challenges.

which has been awarded a Gold Medal by the British Computing Society; and worked on the Department of Business, Enterprise and Regulatory Reform’s Information Age Partnership publication, looking at technology and climate change. This builds on decades of environmental leadership, recognised recently when IBM was awarded the top award in Computer World’s Green IT vendors6.

Driving energy savings across the IT environmentThe Green IT challenge is to respond to the changes in energy supply and environmental conditions right across the IT environment – from IT strategy through to delivery.

Consolidation, virtualisation, and shared services are all proven solutions which help deliver green benefits in addition to the wider service and cost benefits.

Consolidation takes servers with relatively low utilisation and consolidates them onto a large machine running at a much higher utilisation for greater energy efficiency. And server virtualisation creates multiple virtual servers on a single physical server.

IBM is currently consolidating 3,900 of its own distributed servers onto 33 System z® mainframes which should enable savings of up to 80% in annual energy costs and 85% savings in total floor space, plus the additional benefits of reduced support and software costs7.

Leading the way with Green ITWith rising energy costs, a slow down in the economy, tougher legislation on the way, and social pressures to go green – businesses must focus on how much energy they are consuming; and it’s a fact that IT is power-hungry. There’s never been a more compelling time to cut both the costs of running your IT and your carbon footprint.

The fact is that many businesses spend far more on energy than they realise. Experience shows that many data centres are using more energy to power supporting infrastructure (cooling and power systems, for example) than to power IT hardware2; companies with older infrastructures and hardware are using more energy than those with newer systems; and even organisations benefiting from new hardware are dramatically under-utilising it.

In addition, regulation of environmental impact might seriously constrain companies building or enlarging data centres. Gartner has recently identified Green IT as one of its current Top 10 Strategic Technologies3.

The Energy and Environment FrameworkBy starting to tackle the fundamental green issues of carbon footprints and environmental footprints, organisations can keep pace with government

The power needed to run expanding IT systems is growing, while energy bills

are soaring. Combine this with other challenges such as tougher legislation,

customer and investor pressures and it’s easy to see why the green agenda

is impacting on both the CIO and the CFO of most organisations.

directives, and begin to achieve real business benefits and cut costs.

Using the Energy and Environment Framework, IBM helps organisations adopt a holistic approach to addressing these challenges, including use of our strategic outsourcing solutions, which help our clients not only improve their environmental performance, but also deliver real business value.

For example, IBM helped one major retailer to switch off its point-of-sale equipment across its 2,000 stores each night, and power-up on instruction from the network. This one strategy will provide a saving of 722 tonnes of CO2 each year4.

Among its outsourcing clients, IBM has refreshed part of the UNIX hardware platform for a large telco delivering increased processing capacity and a reduced energy footprint; and deployed a branchless server solution for a UK financial services company resulting in 5:1 server consolidation.

IBM’s first formal energy and environmental policy was published in 1971, and it has been actively involved in reducing its impact on the environment ever since. IBM published an award-winning study with Defra into reducing the carbon footprint of IT5

Tony MorganExecutive IT Architect

Ian BrooksGreen Program Manager, Global Technology Services

Outsourcing for a greener business

18

Shared service makes senseData centres’ power and space capacity is increasingly constrained. The capital costs of building new capacity are significant, and running dedicated hosting facilities is not a core skill of most organisations. Moving to an IBM hosted and managed environment can make sound business sense.

Running inefficient data centres is impacting many organisations’ opportunities to save energy. IBM’s data centres in the UK are architecturally designed to optimise the air conditioning and uninterruptible power supply (UPS) to maximum benefit.

Using a shared-service environment is often the most energy-efficient IT model, and IBM provides shared services for server, storage and infrastructure resources as part of its outsourcing portfolio. Utilising these services enables businesses to reduce their carbon footprint further than they could normally achieve individually.

Driving profitabilityCapital investment in new technology is a barrier for many organisations, but using strategic outsourcing enables you to turn capital investment into simple operating costs and spread the outlay over a number of years.

A socially responsible business can also be successful and highly competitive. If your organisation is searching for ways to drive profitability and innovation by becoming more energy efficient, IBM’s strategic outsourcing could be the answer.

� Reference EPA Report to Congress – www.energystar.gov/index.cfm?c=prod_development.server_efficiency_study

� Reference Gartner – www.gartner.com/it/page.jsp?id=��0109

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Among its outsourcing clients, IBM has refreshed part of the UNIX hardware platform for a large telco delivering increased processing capacity and a reduced energy footprint; and deployed a branchless server solution for a UK financial services company resulting in 5:1 server consolidation.

19

Jessica DouglasBanking and Financial Markets, Global Business Services

When investment resources for growth are in short supply, forward-thinking organisations in the sector seek out means to unlock value from traditional operations so that resources can be reallocated.

IT and business operations are areas where financial institutions are increasingly finding opportunity to do this. In our experience, the typical retail bank, for example, is running with an IT budget of about 15% of operating expense, with the best internationally running at around 10% – so there is usually ample scope to release value.

Unlocking valueFinancial institutions which engage specialists to run their IT should discover that making this move helps to drive change and elevate performance, as well as release value. Clarity of purpose, good governance, and transformational experience are keys to success and we believe that IBM is in a unique position to partner organisations on this journey.

With its deep industry perspective gained from managing IT requirements and providing services and products for thousands of financial services clients, IBM understands the risks and challenges for an organisation making the transition to outsourcing. From this informed position, we develop deep collaborative relationships with organisations and work with them to deliver optimised, low-risk IT operations.

Navigating the credit crunchIn turbulent market conditions, financial institutions are reassessing their business models, and seeking new and innovative ways of sustaining business performance. For some businesses, this is a question of survival. The companies that emerge as leaders, however, are likely to be those who are able to see a downturn as a strategic opportunity, rather than a storm to be weathered.

With analysts and economic experts confirming an uncertain outlook, and both governments and institutional investors digging deep to fund businesses, the pressure is increasing in boardrooms to demonstrate decisive action. Budgets are certainly being trimmed, nevertheless some firms are already on track to add greater client value, radically transform their business models, and reshape their cost base.

Financial organisations today are faced with an uncertain future, as the credit

crunch bites deeper into the market. Most are reviewing the way they do

business, reassessing their markets and customer offerings, and considering

new business models. Some are already engaged in transforming their

businesses in order to take competitive advantage in the new environment.

IBM Strategic Outsourcing is uniquely placed to work with all financial

organisations – to help transform their business by delivering more efficient,

resilient and scalable IT. IBM develops long-term, collaborative relationships

that foster business innovation for its clients, and when financial

organisations choose IBM, they can reduce risk and accelerate the benefits

of transformation. With IBM’s partnership and help, financial organisations

can confront the credit crunch and turn it into an opportunity to concentrate

on achieving business growth in demanding market conditions.

Changing the modelBanks and other mortgage providers in the midrange sector are a case in point. Their market is slower and less certain, funding is expensive and there are plenty of competitors, including new entrants from outside the UK, for low risk customers. These financial institutions are now reassessing their fundamental business strategies.

A return to a more traditional savings and lending model is a clear trend, but with so many organisations chasing available savers and credit-worthy borrowers, the task of attracting and retaining the best customers will be a key battleground.

The dilemma is that investment to improve customer insight, and bringing relevant, flexible products to market faster, is needed at a time when cost reduction is also required.

Outsourcing for financial services

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By partnering with us, financial institutions can start benefiting from savings and, if appropriate, from business transformation.

Our readiness to share risk with clients, as they remodel their businesses for new market conditions, is an attractive option for those organisations which plan to emerge successfully from the credit crunch.

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Our strategic commitment to client value, by blending business and IT skills, plus our deep financial services experience, means that we work in partnership with our clients to innovate and implement growth as well as cost management initiatives.

For example, in the battle for the customer, we have the people, assets and experience to help financial institutions to transform traditional approaches to customer service and create a truly integrated customer experience which spans all channels.

Customer information can be harnessed to anticipate needs and sell more relevantly to the customer – thereby increasing satisfaction, retention, and wallet share.

We also deploy our expertise in providing back office services for financial services clients – again a powerful tool to unlock value and refocus organisational energy on successfully navigating the downturn.

Built in resilience and flexibility Financial services clients, who engage IBM to deliver IT and business services, typically experience the additional benefits of business resilience as they benefit from our robust, globalised processes as well as our highly qualified people. By engaging IBM in this manner, our clients can build flexibility into their resource model not only to weather the cyclical downturn, but also to ramp up quickly to seize opportunities wherever they may be to grow revenues and market share.

Banking on IBMFinancial institutions which outsource to IBM benefit from its ability to provide innovative commercial solutions that directly support the client’s financial and strategic goals.

For example, we provide business services such as collections, card, and mortgage processing, and run them on the organisation’s behalf.

Andy BrierleyVice President, Head of Business Development, Strategic Outsourcing

Helping a telecom operator with huge growthIn India, where the telecommunications market is showing explosive growth, we have helped a large telecom operator address the challenges and risks associated with meeting this booming demand.

In order to fulfil orders, while also maintaining high levels of customer service, all the business support processes such as order management and service activation, must run smoothly. The company also needed to make major investments in its IT infrastructure to service its rapidly growing base of subscribers. As a capital expenditure, these are typically offset against future revenues. However, in addition to the inherent risks of a large fixed investment, the company faced a steady decline in average revenue per user for mobile telecom services, the result of government mandated pricing changes.

We established an outsourcing arrangement to transform the company’s processes while also substantially mitigating its investment risks by taking full control and ownership of the IT infrastructure. This replaces risky, upfront capital investments with predictable operating expenses for the client. Equally important, it frees the company to focus on increasing, serving and retaining its customer base.

By enabling dramatic process streamlining, we have helped the company add up to 1.5 million new customers per month seamlessly.

Media and telecommunications: keeping pace in a fast-moving worldWith telecom companies no longer able to rely on voice transmission for their main revenue streams, they are sharing similar challenges to media companies. They need to stand out from the crowd by creating desirable content and providing appealing channels for its distribution.

Companies in both industries want to retain their competitive edge by constantly bringing new products to market that embrace the latest technology and features. At the same time competition is driving down prices while regulation is reducing revenues, increasing the internal focus on cost.

As a consequence of this constant race to remain attractive to their customers, organisations often find they have a large, fixed IT infrastructure cost that they struggle to reduce because there is no time to stop and rationalise.

Media and telecom companies are pivotal in our increasing desire for

immediate access to information and engaging digital content. They feel the

need to be swift in embracing new technologies and getting new products to

market while addressing revenue challenges caused by the downward price

pressure of growing competition or regulatory changes. Outsourcing back-

office infrastructure and processes can help reduce costs, increase focus on

key differentiators and transform business performance.

Creating space to focus on differentiators Most of the technology, applications and business processes found in a typical media or telecom company do not differentiate the business. Reliable IT infrastructure and back- office business processes may be essential for the day-to-day smooth running of the organisation, but they do not make it stand out from the crowd. They can, nevertheless, account for a large percentage of the fixed cost of the enterprise and can divert focus away from the organisation’s core business.

Entrusting these non-core items to a trusted outsource partner can drive cost out of your business and free up resources which can be used to nurture what does differentiate you.

In our experience, a transformational outsource of back-office processes, infrastructure and applications can typically reduce an organisation’s IT infrastructure costs and improve time to market for new products by up to 40% and 60% respectively. By contracting to provide best practice in terms of people, process and technology, we can also ensure that your business stays up to date with its IT.

Outsourcing for media and telecom companies

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Breadth, depth and global coverage IBM is one of the few outsource partners able to combine breadth and depth of experience in infrastructure, application and process outsourcing with technology, people and process transformation on a truly global basis.

As media and telecom companies increase the geographic spread of their operations, many are involved in global mergers or acquisitions. Following such events, IBM can help clients consolidate different systems and infrastructure – such as billing, finance and HR systems, helpdesks, and IT infrastructure – into one streamlined, efficient whole. This delivers substantial cost savings and frees the enterprise to concentrate on developing new products and services to improve revenues, drive customer satisfaction and increase retention.

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Delivering efficiency to a media corporationRecently we formed an outsourcing agreement with a leading, pan- European media corporation, taking over responsibility for all of the company’s IT business applications, IT and media systems.

We are modernising the core business applications such as advertising sales, scheduling and rights management, integrating and dovetailing them across all distribution channels. This will reduce the large number of in-house applications and introduce uniform open standards, facilitating the integration of international partners.

By setting up a broadcast integration centre and building a digital, tapeless technology infrastructure, we will enable the delivery of TV programming to multiple platforms across Europe.

This transformation will make the corporation faster and more flexible in the European market, while also reducing costs. The increased efficiency of the digital platform is expected to contribute savings of approximately €50 million over 10 years.

“ In India, where the telecommunications market is showing explosive growth, we have helped a large telecom operator address the challenges and risks associated with meeting this booming demand.”

Steven PeelBusiness Development Executive, Global Technology Solutions

Expertise and experienceAs one of the world’s most experienced outsourcing partners, IBM has a wide span of engagement across the private and public sector, both in the UK and globally. As a result, we are constantly working with new ideas, innovative thinking and best practice, which we use to benefit our clients.

One of the benefits of partnering with IBM is that we offer a full range of outsource services. Whether you want us to manage your infrastructure and applications (servers, desktop, network, helpdesk, storage or Web hosting) or need help with a complete transformation that includes business process re-engineering, creation of a shared services infrastructure (to manage areas such as HR, Finance and Estates) through to change management, we have a depth of public sector experience that helps us understand the complex issues that local government needs to address.

Recent moves to give local authorities more responsibility for shaping their communities, plus the ‘transformational’ government initiative, are radically changing the public sector. The focus is now on understanding and supporting communities and gearing services around the individual throughout their lifetime.

Two fundamental requirements for this new style of local government are rapid response to changing circumstances and the seamless provision of information across organisational silos. And, as services are often provided in collaboration with other agencies such as the health service or the police, local authorities are facing the need to find ways of working in partnership with these organisations to share information intelligently and respond proactively to a citizen’s or community’s needs.

In addition to these government-led changes, commercial organisations are continuing to improve their customer service and citizens expect to see the same level of improvement from public bodies. Whether dealing with long-term trends, such as an ageing population, or less predictable events such as the credit crunch or floods, local authorities need to provide an agile and improved service.

The government’s reform agenda is shifting the focus for local authorities and

creating a need to engage more closely with communities and individual

citizens. Information and Communication Technology (ICT) has an important

role to play but, with a history of under-investment, many authorities are

struggling to improve services. Working with a strategic outsourcing partner

can deliver sustainable service improvements and cost-efficiencies, freeing

authorities to focus on adding value to the community.

Route to best valueAs services evolve, the ICT environment that supports and enables them also needs to change. The proliferation of information must be managed effectively and securely. Systems and information need to be integrated in a way that unlocks value and equips council officers with insight into community and citizen requirements. Service improvements also have to demonstrate cost efficiencies and best value.

The provision of ICT services is not usually a core objective for local authorities. The infrastructure often suffers from a lack of investment and skills and the ICT department is sometimes under-resourced, making it difficult to develop people’s professional skills to meet evolving needs.

Entrusting your ICT environment to an outsource partner with experience and understanding of the public sector can cost-effectively provide the infrastructure and applications you require while helping to fill any gap in skills.

Outsourcing for local and regional government

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Whether dealing with long-term trends such as an ageing population, or less predictable events such as floods, local authorities need to share information intelligently and provide an agile service.

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PartnershipIn partnership with you, IBM can design, build and operate a solution that matches your current needs and evolves with your requirements, making your organisation more agile and responsive. We can deliver that solution from your own premises or one of our data centres. Our adherence to best practice in the provision of security, service management, helpdesks, and programme and project management means we can optimise your operational environment. Using IBM’s resources and capacity can reduce your operating costs and release funding to deliver higher value programmes to your citizens.

We can deliver further value from your IT infrastructure by deploying modern techniques like server consolidation and virtualisation and we can use green technologies to reduce the environmental impact of your operations while delivering further cost efficiencies through reductions in power consumption.

Council officers, transferring across to IBM as part of an outsourcing arrangement, can enhance their skills through our global training resources and knowledge base.

They will also find themselves supported within an environment that shares values with the public sector. IBM embraces aspects of corporate social responsibility such as respect for all individuals, environmental issues and community investment.

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Eighty-five per cent of CEOs plan to partner to capitalise on global integration opportunities

Out-performers are 20 per cent more likely to partner extensively than under-performers

IBM Global CEO Study 2008

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For more information, please go to:ibm.com/services/uk/gbs/html/ceostudy2008.html and to ibm.com/services/uk/infrastructureoutsourcing

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