Poul Tokkedal

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Udviklingen i det det Danske Sourcing Marked – nye krav til etableringen af et godt samarbejde?

10. Februar 2016

Dansk IT IT-outsourcing

© 2016 Information Services Group, Inc. All Rights Reserved 2

Agenda

1. Hvor bevæger outsourcing markedet sig hen?

2. Hvilke ændringer er der sket der i outsourcing opgavernes karakter?

3. Hvorledes har kundernes behov ændret sig over tid og hvorledes afspejler dette sig i ændrede valgkriterier?

4. Hvilke nye krav stiller kunder og leverandører til hinanden for at kunne gennemføre et frugtbart samarbejde?


4Q15 Global Market ACV up 5% Y/Y, helped by larger awards. Cloud, digital and automation drive the average contract values and durations to all-time lows.

4Q/Full-Year Broader Market ACV (€B)*

Average ACV (€M) and Durations

Global Market Contract Award Trends

4Q/Full-Year Broader Market Contract Counts

1.090 1.023 926 953 975 847 786 694 555 529

355 388 324 312 334

272 312 233

190 212

1.445 1.411 1.250 1.265 1.309

1.119 1.098 927

745 741

201514131211100908072006

1Q to 3Q Countd 4Q Counts

€ 13,4 € 15,3 € 13,1 € 15,9 € 13,9 € 14,5 € 12,6 € 12,4 € 9,9 € 10,3

€ 5,6 € 5,3

€ 3,9 € 4,6 € 6,0 € 4,7 € 6,0 € 4,3

€ 5,1 € 3,8

€ 19,0 € 20,6

€ 17,1 € 20,5 € 19,9 € 19,2 € 18,6

€ 16,7 € 15,0 € 14,1

201514131211100908072006

1Q to 3Q ACV 4Q ACV

€ 13,1

€ 16,2 € 16,9

€ 19,0

3,5 4,1

4,5 5,0

2015201220092006

Average ACV ($M) Avg Durations (Yrs.)

Copyright © 2012 Information Services Group, Inc. All Rights Reserved

Denmark


ISG’s Contracts KnowledgeBase Provides Insights into Market Trends

Market-Based Contract Metrics

Nordics-Based Database Statistics

Functional-Based Contract Metrics

2,100 + Total Contract

Records

$117 Billion + Total TCV

680 + Records added past 12 months

100 + Sources

230 + Service

Providers

1,810 + ITO

Contracts

290 + BPO

Contracts

570 + Public Sector

Contracts

1,530 + Commercial

Sector Contracts

300 + Denmark Contracts

485 + Finland

Contracts

550 + Norway

Contracts

760 + Sweden

Contracts

All Data is as of January 15, 2015


Contract Award Trends - Denmark

Denmark: Total Market TCV ($B)

All Data includes both Commercial and Public Sector Contracts with a TCV > $5M

Denmark: Total Market Number of Contract Awards

0,3 0,2

3,4 2,8 2,8 2,7

3,1

4,3

1999-2000 2001-02 2003-04 2005-06 2007-08 2009-10 2011-12 2013-14

16 10

38 49

36 30

39

77

1999-2000 2001-02 2003-04 2005-06 2007-08 2009-10 2011-12 2013-14


Contract Award Trends by TCV Band - Denmark


Denmark: TCV of Contracts by TCV Band 2013-2014




2% 11%

11%

41%

35%

$5M-$10M

$10M-$24M

25M-49M

50M-199M

200M+

1%

6%

6%

24%

63%

$5M-$10M

$10M-$24M

25M-49M

50M-199M

200M+

7%

10%

35% 48%

$5M-$10M

$10M-$24M

25M-49M

50M-199M

200M+

1% 8% 4%

42%

45%

$5M-$10M

$10M-$24M

25M-49M

50M-199M

200M+


End Clients – G-2000 Market Prevalence of Sourcing (Denmark)

All Data includes Active Commercial Sector Contracts Awarded by G-2000 Firms with a TCV > $5M

Forbes G-2000 Denmark: Prevalence of Actively Sourced Contracts by Functional Area

43% 43% 43% 36%

21%

7%

21%

57% 57% 57% 64%

79%

93%

79%

Data Center, Mid-Range & Storage

End UserComputing

Network Applications Back Office (HR,F&A, Procurement)

Contact Centers Industry-Specific

Not Actively Sourced Actively Sourced


Leading Service Providers in Denmark – Changing Landscape

Denmark: Market TCV ($B) 2003-06




23%

72%

1%

4%

0% Nordic-BasedProvidersAmericas-BasedProvidersEMEA-BasedProvidersIndia-BasedProvidersAP-BasedProviders

14%

60%

7%

18%

1% Nordic-BasedProvidersAmericas-BasedProvidersEMEA-BasedProvidersIndia-BasedProvidersAP-BasedProviders

7%

83%

8%

2% 0% Nordic-Based

ProvidersAmericas-BasedProvidersEMEA-BasedProvidersIndia-BasedProvidersAP-BasedProviders


Drivers For Outsourcing Are Changing…

► Clients today seek greater value from their traditional outsourcing contracts

► We note that access to domain expertise and ability to develop best practices has become as important as cost savings in the last 3 years

ISG advised deals have shown a notable change in the reasons why companies are outsourcing – value addition gains a stronger priority

Other reasons include – M&A and divestments, business restructuring, etc

10%

1%

3%

3%

6%

9%

20%

46%

Other

Avoid capital expenditure

Increased delivery speed

Establish variable cost structure

Focus on core/strategic areas

Access to additional resources/skills/expertise

Improve quality, including best practices/innovation

Save costs

Why are companies outsourcing?

Drivers for verticalization


5 Principles to Embrace to Succeed in the Outcome Economy

Capture the cloud savings. $1 spent on cloud retires $4 of traditional spend.

Custom is out. Fulfill the original promise of outsourcing.

As technology and business process converge, look to automate accounting, HR, and IT.

Systems managers make way for solution integrators, ethicists, marketers and consumer advocates.

Focus on front office needs. Know your company’s core

products and services. Stay relevant by driving

competitive technology into the business.

Embrace a cannibalistic business model, moving away from employee assets towards automated solutions.

Know your client’s industry and core business needs.

Excel at embedding tech into your client’s products and services.

Sell multi-tenant solutions by repackage existing shared assets.

Invest in shared specialist resources across clients.

Software Replaces Labour

Multi-tenancy Delivers

Embedded Tech is the Goal


Service Integration is Key

5 Principles to Embrace to Succeed in the Outcome Economy

Manage multiple internal and external providers across countless platforms.

Focus on seamless, agile delivery across all platforms, service models and providers.

Support your non-IT organizations who buy solutions without you. Their need for both speed and self-contained options make these solutions irresistible.

Plan for the eventual need for centralization to solve integration and interoperability problems.

Be an outstanding collaborator, not only with your clients, but with your competitors.

Change who you sell to, considering non-IT buyers in your plans.

Shadow IT Returns

TBM CM

SIAM


Service Integration Model Options

The following options have been applied to manage the integration of multiple Service Providers; whether internal, external, IT or non-IT.

For simplicity these are presented as discrete models, in reality there’s a sliding scale between them:

Model 2: Guardian

Model 1: Prime

Client

Single service provider with Service Integration implicitly included

Model 4: In-house

The client retains accountability and responsibility for Service Integration

Model 3: Independent

SIAM is discretely contracted for and delivered by the provider of other services

Client

Client

A SIAM service is procured from a provider which does not deliver other service towers

Applications IT

Infrastructure Business

Processes

IT Infrastructure Applications Business Processes


SIAM

SIAM

Client


SIAM


Collaboration is key – but how?

The Clients and Suppliers must meet each other in a collaborate agenda set by the clients and supported by each individual Supplier.

Derived from ISG‘s Target Operating Model

End-to-end Service Management Processes in the right depth and breadth for operational control

Organization that meets functional and operational requirements

Supportive Contract language and incentives for collaboration

The right Service Design in terms of business service/ process enabling Data, Application and Technology Architecture

Clear Roles & Responsibilities in the context of the overall Target

Operating Model (TOM)

Skills or Competencies required to perform SIAM

Common Tooling for integrated processes and data transparency

Correlated Reporting and data management

Drivers Objectives Measures

Business Architecture

Data, Application & Technology Architecture


► Achieved or identified more than US $65 billion in client savings achieved in more than 11,600 engagements

► ISG is a trusted advisor with more than 80% of our engagements are repeat clients

► Advised over 70% of the Forbes Global 100 with most being repeat clients

► Global leader in Sourcing Advisory Services with more than $375B in transactions providing us unparalleled data and Service Provider knowledge

► Advised over 60% of all advisory led sourcing transactions

► Operations in 21 countries on 6 continents

► Over 950 professionals serving commercial enterprises and governments across the globe

► More than five decades of combined global leadership in information and advisory services

► Proudly independent with deep collaborative relationships with all major service and technology providers

The ISG Advantage

ISG is the leading technology insights, market intelligence and advisory services company, offering clients one source for advisory support in driving operational effectiveness for client’s corporate business support functions.


Sourcing Advisor of Choice

Sourcing Advisor of the Year Thought Leader of the Year Human Resources Outsourcing Association (HROA)

Best Outsourcing Thought Leadership Award The Outsourcing Institute and The Delve Group

Top Full Service Outsourcing and Off-Shoring Advisor The Black Book of Outsourcing

The Best of the Global Sourcing Advisory Firms The Outsourcing Hall of Fame The International Association of Outsourcing Professionals (IAOP)

ISG is the leading sourcing advisory for ITO with a market share greater than that of all other ITO advisory firms put together. This ensures we have the richest and deepest source of market data and insight from which our clients can gain significant value. Service Providers know and respect ISG’s value proposition & our market share ensures that our clients get their attention.

Number of Contracts: Market Share of Active Advised ITO Transactions Greater

Than $25 Million

54%

8%

7%

3% 3% 2% 2% 1%

20%

ISG

Confidential

Equaterra/KPMG

Everest

Gartner

Deloitte

Alsbridge

AT Kearney

Other

TCV: Total Contracted Volume of outsourcing engagements

http://www.tpi.net/newsevents/news/releases/100419-US.html


Why ISG is the right Partner for SIAM Consulting and Transformation projects:

ISG Operational Readiness Value Proposition

Independent advisor in Service Integration and Management (SIAM) with nearly 10 years of practical experience.

Methodology covering the complete life cycle and spectrum of SIAM from assessment to target operating model implementation.

Advisory

Independent

Pre-build modular framework which describes roles & responsibilities for 50+ processes and can be adapted to any client situation.

Team

International

Methodology

Comprehensive

Framework

Pre-build

Market Insights

Broad Broad market insight based from more than 50+ projects and many client references that demonstrate our expertise in SIAM.

International team of SIAM experts who have delivered across global blue chip companies and who bring practical lessons learned to the table.


ISG (NASDAQ: III) focuses exclusively on helping clients achieve operational excellence. With advisors across the globe we are in the locations that matter to you.

ISG Solutions to Achieve Operational Excellence

scale

Over the past 5 years ISG advised more than 60% of the TCV sourced with the aid of an advisor.

Total TCV of ISG advised transactions $386B.

clients

70% of the Forbes Global 100 are ISG clients. ISG advises the world’s largest blue chip firms through some of their most critical business operations transformation projects.

value

80% of ISG clients are either repeat or direct referrals.

market voice

The ISG Outsourcing Index® is the premier source of insight and is considered the authority on trends and developments in the global sourcing industry.

The ISG Cloud Comparison Index™ is the industry’s first ongoing analysis of the cost of internal IT infrastructure versus public cloud infrastructure.

ISG advised more than 1,900 organizations

in more than 16,000 engagements

900+ Professionals Worldwide

Operating from 21 Countries

*Commercial Contracts >$25 M in TCV; Information as of April 2015


Optimization Solutions along all Phases of Transformation

With comprehensive expertise across service areas, our consultants bring an extensive set of tools and methodologies for clients’ optimization efforts.

IT Service areas

Business support Service areas

Finance & Accounting Human Resources Procurement Contact Centers Shared Services

Facilities Management Document Management Mergers & Acquisitions Insurance Operations Banking Operations

Cloud Solutions ERP Solutions Global Delivery IT Security

Infrastructure Applications Desktop Services Network Services

What are others doing? Where is the market

headed?

How do I ensure I get the value? How do I build an improvement culture?

What does excellence look like? How do I compare?

How should I change? What do I need to succeed?

How do I manage execution? Where can I reduce risk?


Please contact us with your questions and comments.

Learn More

ISG insights serving providers and market analysts

www.isg-one.com

Denise Colgan EMEA and AP Media Contact

+44 1737 371523 [email protected]

Poul Tokkesdal Director Nordics +45 30 74 99 97

Poul [email protected]

http://www.isg-one.com/

http://www.isg-one.com/connect/

www.isg-one.com

Information Services Group is a leading technology insights, market intelligence and advisory services company, serving more than 500 clients around the world to help them achieve operational excellence. ISG supports private and public sector organizations to transform and optimize their operational environments through research, benchmarking, consulting and managed services, with a focus on information technology, business process transformation, program management services and enterprise resource planning. Clients look to ISG for unique insights and innovative solutions for leveraging technology, the deepest data source in the industry, and more than five decades of experience of global leadership in information and advisory services. Based in Stamford, Conn., the company has more than 800 employees and operates in 21 countries.

knowledge powering results®

http://www.isg-one.com/

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