Best Integrated Relationship: Brunswick Outdoor Group and ACS. The relationship between Brunswick Outdoor Group, a division of Brunswick Corporation, and Affiliated Computer Service (ACS) began slowly in 1995 with a contract for ACS to take over the data center of Zebco, a Brunswick Outdoor company.
Most Effective Deal: Kellwood Company and EDS. In most business circles, the Kellwood Company is a well-kept secret. Although the company is the fourth largest apparel company in the U.S. and the largest producer of popularly priced clothing, their clothing does not carry the Kellwood label.
Tomorrow’s clients are looking for ways to gain competitive advantage, to increase efficiency, to transform their workforce, and to reach new levels of performance.
Partnership: More Than a Fancy Phrase. One of the most telling changes in future outsourcing will be the reshaping of relationships as companies continue to move away from cost reduction as the single key driver.
Outsourcing: The Big Picture. The outlook for pure outsourced big deals will decrease in the coming year, according to Jim Champy, chairman of outsourcing at Perot Systems.
As the industry continues to move from cost-based to value-based outsourcing, technology trends that leverage network over premise infrastructure will offer new opportunities in business processes and functions.
The proliferation of outsourcing is just phenomenal across types of activities, across industries and at every level of the organization.
Commonwealth Bank of Australia (CBA), the largest bank in Australia, has 6.5 million customers. Until late last year, the bank’s internal technology services department with 1,500 people was the second largest shop in Australia. Now that scene has changed dramatically. CBA and EDS have forged a two-part relationship which includes an outsourcing services contract. The other side of the relationship is a true partnership. CBA bought 35 percent of the EDS business in Australia.
The information technology (IT) outsourcing industry was launched by an explosion of rapidly changing technology and companies’ needs to access benefits of that technology at the lowest possible costs. The bottom line was cost containment. Today, that line is a bit blurred. Although cost containment continues to be a major issue, many companies have other goals as their primary reasons to outsource.
Today, enterprises of all sizes want to expand their reach to new customers, to contain or reduce their costs, or to bring new products and services to market more quickly. Increasingly, they are looking to information technology (IT) to help accomplish all these goals.
International outsourcing embraces several common factors: the creation of value, the introduction of concepts, the portability of technology. Then there are the uncommon: language and culture. We’ve heard it over and over again. The supplier community’s biggest concern is getting and retaining qualified people, said Steven Leakey, EDS’ former director of marketing and business development for Asia/Pacific. But it’s an even bigger and more complex concern for the international outsourcing marketplace.
The global marketplace is booming, and companies are responding to the lure of worlds to be conquered. Firms that transact business around the world are striving to reach new and emerging markets domestically and internationally and to operate more efficiently on a global basis. For some of the firms, their efforts to extend their marketing and operational reach beyond their traditional boundaries creates the need for assistance with their infrastructures. Many of them are turning to outsourcing as the bridge to reach their international growth strategies and customer base.
The European Theater is primed and ready for growth in Information Technology (IT) outsourcing. Total European IT outsourcing is estimated at around $15 billion in 1997, and with firms fueled by the need to concentrate on their core competencies, that figure is expected to rise to around $27 billion in 2001.
Companies frequently turn to outsourcers to harness the tremendous power of spiraling IT technology and shape it into a tool for standardizing their information functions across business lines and geographic borders. Unfortunately, all too often they then tie the outsourcers’ hands by failing to establish standardization as a top priority within their enterprise.
All things are not equal. Never has that truth been more evident than in the challenges facing multinational corporations’ efforts to implement seamless network communication around the globe. The goal of providing and maintaining full capabilities to even the most remote production facility frequently slams into the reality of infrastructure inconsistencies across the company’s global footprint. At that point, many companies turn to outsourcers.
If it’s not broken, don’t fix it. Hyatt Hotel Corporation put a new spin on that old adage in 1996 by ‘fixing’ the company’s well-functioning IT organization before it broke. The result is an outsourcing agreement that continues to deliver Hyatt’s high standards of customer service while providing the resources to plan for the future.
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