Outsourcing Performance 2015
TRANSFORM Outsourcing performance 2015 – TRANSFORM
www.giarte.com
Outsourcing Performance 2015
TRANSFORM Outlook, Strategy, Research
INTRODUCTION
Transform! A transformer is an electrical device that facilitates the transfer of energy between two or more circuits by means of electromagnetic induction. Transformation is the conversion of ‘something’ into another form, but also the manifestation of an important and valuable change. Nothing is as changeable as information technology. If you consult the professional media from five years ago, you won’t see a word mentioned about Big Data, the Internet of Things or cloud computing. IT is like quicksilver: fluid and agile, and more account will have to be taken of this in outsourcing. A lot is going to change in outsourcing in the coming years. In this yearbook, the ‘Transform’ theme occupies centre stage: a structural change in form. Where Giarte is concerned, Transform is about other users and other IT tools and practices. Transform also relates to the managers, experts and technicians, who have both the vision and the guts to put change in motion, but who have also sustained the necessary bruises in doing so. At Giarte we have conducted dozens of interviews and, together with experts, elaborated upon four topics on the theme of transformation.
PART 1 – Exit and Retransitions Every new outsourcing deal is celebrated with champagne. In the meantime, we know that the countdown to the end date has then started. During the term of a contract almost everything changes except for the contract itself; it is therefore not illogical that the collaboration begins to stall after a few years. The business case for outsourcing does not get any better when you, as outsourcer, have to pay unplanned millions of euros extra at the end of a contract. Many a CIO severely disparages his outbound service provider during an exit: teams are dismantled, support and performance drop to zero and additional costs skyrocket. Are outsourcers naive or are they also responsible for this? Giarte held discussions with suppliers who have experienced a retransition and with outsourcers who are preparing for a future switch of service provider. How do you ensure that your exit readiness is in order, so that a transition to a new service provider runs as smoothly as possible? Giarte found four organisations willing to candidly discuss the ‘exit’ phenomenon. Two outsourcers came to the conclusion that the existing partnership was no longer adequate. Together with their service providers, they explain how you can amiably go your separate ways.
04 outsourcing Performance 2015
PART 2 – Workspace Who has two telephones and two laptops at home? Does your private telephone fit into your car kit? Which useful apps and software tools have you recently installed on different devices? What is possible in the real world rarely corresponds with what is permitted in business. In that real world, the consumer and business user coalesce into a new phenomenon: the business consumer. It is no longer IT that determines which tools the user is using. This leads to changes in eight key areas.
PART 3 – Ecosystems By vesting services with several parties, you, as outsourcer, can spread the risks and choose best-of-breed solutions. As well as these advantages, there are a number of challenges: how do you ensure that the various service providers work together well and that everyone knows where to find and complement one another? Mariël van der Linden calls for new forms of collaboration in multi-vendor sourcing and shows what the power of ecosystems can be. Finally, we show how Ahold and the Port of Rotterdam gain experience with new forms of collaboration: collaborative KPIs, a collaboration board and even an organisation for special occasions.
PART 4 – Software Asset Management According to analysts, medium-sized and large enterprises currently spend a quarter of their IT budget on software licences and support fees. At the same time, large organisations have lost sight of the licences and versions they possess. Software vendors are also tightening the screws: if they suspect non-compliance, an audit follows. If something is wrong, penalties can amount to tens of millions of euros. It is time therefore to make serious use of Software Asset Management. We are proud of this twelfth edition of our benchmark study. This year too, we have again been able to include more evaluations than last year. We would like to thank everyone who contributed to our research. However, we would not have been able to create this Yearbook without the cooperation of many CxOs, managers of service providers, consultants, lawyers and other experts. This book shows that collaboration contributes to success in outsourcing – something from which both customers and suppliers can reap benefits. Marco Gianotten Managing Director Giarte
INTRODUCTION 05
Content 04
Introduction: Transform
PART 1 | Exit and retransitions 08
Trends and tragedies during outsourcing retransitions
18
Case Astellas and Capgemini – How a relationship improves during an exit
21
Case bol.com and Schuberg Philis – The perfect exit?
part 2 | WORKSPACE 24
The workplace turned upside down
30
Case Randstad and Kpn – Goodbye SLA – focus on end user
part 3 | ECOSYSTEMS 34
Transformation: from multi-sourcing to ecosystem
41
Case in the port of Rotterdam – A port as ecosystem
44
Case Ahold – Managing behaviour with a collaboration board
48
Case Port of Rotterdam – The Harbour Master’s night’s rest
part 4 | SOFTWARE ASSET MANAGEMENT 50
Grip on software: from toxic to strategic asset
RESEARCH 60 Structure of the study 62 Satisfaction with delivered services 63 Recommendation of the service provider 64 Three client groups 66 Being a good customer 68 Application Management 70 Infrastructure Management 72 End User Management
GENERAL INFORMATION 74
About Giarte
75 Colophon
content 07
PART 1 | Exit and retransitions
Trends and tragedies during outsourcing retransitions Written by Marco Gianotten
The business case for outsourcing does not get any better when you, as outsourcer, have to pay millions of euros extra at the end of a contract. Many CIO severely disparages his outbound service provider during an exit: the outbound service provider’s teams are dismantled, support and performance drop to zero and additional costs skyrocket. How do you ensure that your exit readiness is in order, so that the transition to a new service provider runs as smoothly as possible?
At the end of an existing contract, an outsourcer
the outsourcing market, it is thus essential that
has three basic options: opt for insourcing, con-
retransitions run as effectively and efficiently
tinue with the current service provider without
as possible.
a new call for tenders or start a new tendering process. If someone other than the existing ser-
Pillars of a perfect exit
vice provider emerges as the winner at the end
For an ideal exit, the contract contains good
of the tender process, a so-called retransition
transition arrangements, which also state that
follows. After this, there is an exit by the cur-
the service provider delivers an annual tran-
rent service provider. Although many contracts
sition plan, including planning and cost. And
include exit provisions, they are often generic
whether these formal exit arrangements are
in nature: “the service provider will in all rea-
recorded or not, there are always plenty of
sonableness cooperate in the transfer to a third
opportunities to ensure there is a carefully
party after termination of the contact”. Such
organised farewell. Giarte has held discussions
wording leaves too much room for interpreta-
with suppliers who have experienced a retransi-
tion and reduces the cost predictability of an
tion and with outsourcers who are preparing for
exit for the outsourcer. Because the terms of
a possible switch of service provider. There are
contracts are becoming ever shorter, exits will
four areas in which you should make definite
increasingly come up for discussion. A poor
agreements if you want to increase the chance
exit can lead to delays in the transition so that
of a perfect exit and successful transition. These
the costs of outsourcing may increase. That
are: I) human capital and expertise, II) the state
puts the original business case for outsourcing
of technology and documentation, III) licences
under pressure. For growth and development of
and intellectual property, and IV) relationship
08 outsourcing Performance 2015
Because the terms of contracts are becoming ever shorter, exits will increasingly come up for discussion PART 1 | Exit and retransitions 09
management. These four aspects are explained
so that the focus on the relationship decreases.
at the end of this article. First of all, based on
In both situations, the service provider will try
our analyses with outsourcers, consultants and
to earn as much as possible from the contract.
lawyers, we provide a picture of the obstacles
This can lead to a growing backlog of mainte-
and pitfalls that outsourcers may encounter
nance and management of software, hardware
during an exit.
and documentation. This also makes a future retransition increasingly difficult and expensive.
Not thinking about the future costs money
In addition, a financial gain can be achieved by claiming Intellectual Property Rights (IPR).
Back to everyday reality. It would do credit to when faced with the customer’s announced
Who has the power during the due diligence?
departure, but the relationship often doesn’t
During an exit, both outsourcer and outbound
get any better after the bad news has been
and inbound supplier are confronted with due
received. On the contrary, for outbound suppli-
diligence. The outsourcer is therefore highly
ers it is financially attractive to be recalcitrant.
dependent on the outbound supplier where the
During the contract period, margins were thin,
quality of documentation and information in
but after the contract date all discounts are
the data room is concerned. Both outsourcer
void and it is therefore possible to earn good
and inbound supplier must have timely access
money at last. Everything that is associated with
to complete and reliable information from
the exit, but is not contractually agreed, can
automated tools for IT Service Management
be billed at the highest possible price; the out-
(ITSM), such as the Configuration Management
sourcer may then be confronted with all sorts of
Database (CMDB), IT Asset Management (ITAM)
financial setbacks.
and knowledge products. It would not be the
service providers if they acted like a good loser
first time that an outsourcer, at the end of the However, it would be strange if only the exit is
contract, hears from the outbound supplier:
the cause of a sudden change in the relation-
“we need four months to collect this infor-
ship. There is usually already a breach of trust
mation”. Another horror scenario is that the
between the parties before the decision is made
inbound supplier finds the data quality to be
not to continue. The market launch of a Request
insufficient and therefore refuses to accept the
For Information (RFI) may herald the start of the
transition. To fill the gap, the outsourcer must
cold war. As long as the current service provider
then return to the outbound supplier, which
is still in the race for the award of the new con-
can then charge the maximum price for this
tract, it will show self-control so as not to act
repair process; meanwhile, the inbound supplier
against its own best interests.
has already started billing for the new services because the customer has been found negligent.
The quality of the relationship may also deteriorate at an even earlier stage. For example, when
Contours of a bloodbath exit
a contract is always extended annually, a service
After the winner has uncorked the champagne
provider may not dare to continue to invest in
and the loser’s frustrations have subsided, the
people and resources. Or if the service provider
existing contract often still continues for sev-
has the idea that the chances of an extension
eral months. The management of the outbound
or renewal of the relationship seem to be small,
supplier usually fairly quickly formally appoints
10 outsourcing Performance 2015
Contract innovation reduces the likelihood that outsourcers get stuck with a very outdated IT environment a project manager for the exit. This exit man-
strating that the outbound supplier is guilty of
ager is instructed to formalise the processes and
‘abuse of circumstances’ so that the excess pay-
procedures as much as possible. The rules for
ment can be recovered.
communication are tightened; informal contacts and work meetings between employees of the
A similar problem can occur in the area of
outbound and inbound service providers are put
licence costs. With many transitions, a trans-
on hold. No one on the side of the outbound sup-
formation in technology generations also takes
plier may speak to the inbound supplier without
place (the transition to new versions of software,
the express written consent of the senior man-
for example. Also see chapter: Grip on Software).
agement of the outbound supplier, while the IT
If the outbound and inbound suppliers do not
professionals from both parties would very much
work well together, the outsourcer runs the risk
like to work together. Particularly when little is
of having to extend existing management con-
documented and a lot of important knowledge is
tracts and licensing agreements with the out-
in people’s heads, the personal contacts between
bound supplier and/or software vendors, while
architects and other IT professionals are vitally
the inbound supplier often also has to be paid
important. In addition, every transfer activity by
for new licences.
the professionals and team managers is preceded by a request, which is followed by a proposal.
Four focus areas for exit readiness
Every trifle thus receives a project stamp. The
The ideal situation is, of course, one where the
risk is that the transition is slowed down or even
contract to be signed includes measures that
comes to a halt, with the additional threat that
are designed to contribute to a good exit. The
the outbound supplier can switch to contract
outsourcing contract almost always includes a
renewal by week or month at exorbitant prices.
provision that there should be an up-to-date
The outsourcer then has the honour of demon-
exit plan. When there are disputes between
PART 1 | Exit and retransitions 11
Human capital and expertise: points of attention for the exit plan – Establish that the outbound service provider keeps staff with relevant knowledge and resources available throughout the transition period and includes them in the transition team. Ensure that the outbound supplier is committed to providing a project manager who has gained previous experience in managing exits, which are at least comparable in terms of complexity and size. – From the commencement of a new contract ensure there is a list of key staff and project managers, which is amended every time there is a change in personnel. In this way it is always clear during the term of the contract who is relevant for the exit core team. It is wise to establish that after the announcement of the end of the contract (or six months before the expiry of the current term) no more people may be added to the team, or at least not without the consent of the outsourcer.
– When the end of the contract is in sight, prevent the outbound supplier from replacing qualified personnel with benchwarmers or inexperienced employees. In addition, a reorganisation resulting in a transfer of staff should be avoided. Contractual prohibitions are appropriate in this case. – Establish the right of the outsourcer to hire or employ experts and experienced staff from and through the outbound service provider. This is often accompanied by a non-solicitation clause; if the outsourcer has access to the most important staff for a period of time, he can also promise to subsequently leave the employees of the outbound supplier in peace. – Ensure that (during an exit) the outbound supplier allows his employees to have direct contact with the new service provider at the request of the outsourcer, without the need for formal tripartite consultation structures, with the outsourcer having to act as an intermediary
Clean up prior to an exit 12 outsourcing Performance 2015
outsourcers and outbound suppliers it often
ity of the documentation. Because not all the
emerges that this plan appears to be missing.
knowledge and experience can be recorded in
As indicated above, there are four areas in
systems, it is important when drafting the exit
which you should make agreements: I) human
plan to identify which employees are important
capital and expertise, II) the state of technology
for the continuity of service.
and documentation, III) licences and intellectual property, and IV) relationship management.
II – State of technology and documentation The state of the IT landscape refers to Life-
I – Human capital and expertise
Cycle Management (LCM) of hardware and
With first-generation outsourcing contracts,
software. At the beginning of an outsourcing
the application of the law (which determines
contract, the quality of the technology and
whether employees of the outsourcer are trans-
documentation is often greatly improved,
ferred to the service provider or not) is gen-
but arrears of maintenance occur during the
erally clear. However, when re-tendering it is
contract and the quality of the documentation
not always clear whether there is a transfer of
about the systems deteriorates. Although many
undertaking. This is in fact largely determined
outsourcers have a management organisation
by the way in which the outbound supplier has
for the control of service provider(s), it is
organised its services at the time of transfer.
not sufficiently concerned with the quality
When there is no transfer of undertaking, it is
of documentation and associated data. It is
possible that the outbound service provider
not unusual for a service provider to already
is stuck with redundant staff. If the parties
establish at the start of a new contract that the
involved do not reach agreement, this account
quality of the documentation is inadequate.
is often settled in a different manner during the
It is the task of the outsourcer’s management
exit. On the other hand, a knowledge gap may
organisation to determine which improvements
also arise if key staff with important knowledge
are needed in order to avoid problems later on
and skills do not transfer to the new supplier,
during a retransition.
but are retained by the outbound service provider. Many outsourcers only discover how
It is, of course, possible to contractually assign
much knowledge and expertise has been lost
responsibility for Life-Cycle Management to
after the transition has been completed. The
the service provider, but that leads to additional
extent of this knowledge gap is largely depen-
costs. When entering into an outsourcing con-
dent upon the condition of the available docu-
tract, a winding-down schedule with termina-
mentation. Practice shows that especially in the
tion penalties and unrecovered investments is
case of infrastructure outsourcing, the exper-
often agreed. In addition, the duration of the
tise – including the way in which the processing
contact and the LCM cycles must be properly
of batches and other management processes
coordinated.
is organised – is rarely well documented and is mainly present as tacit knowledge in people’s
If you, as an outsourcer, want to switch to a new
heads. For outsourcers it is therefore impor-
version of Windows at the start of the contract
tant on the one hand to ensure that the service
with the inbound service provider, the obvious
provider is contractually obliged to keep the
thing to do is find out for yourself from the
documentation up-to-date and available and,
software vendors which of the (often hundreds
on the other hand, to regularly review the qual-
of) applications used will still run on the newly
PART 1 | Exit and retransitions 13
chosen version. To avoid any problems, you can
providers may, for example, claim rights to the
opt for the transition of responsibilities not to
directory structure of the Active Directory or
take place at the same time as the updating of
to the software repository for the outsourcer’s
the technology.
mission-critical Linux environment. It is then argued that this alleged intellectual property
To keep data and documentation up-to-date
cannot automatically be transferred to a com-
throughout the contract period, it is possible to
petitor. There are several ways to avoid or
opt for periodic reviews and a formal audit well
resolve the wrangling about intellectual property.
before the exit date, with both being stipulated in the outsourcing agreement. The same applies
In practice, it will often not make a lot of differ-
to agreements about the information that the
ence whether the outsourcer holds the intel-
service provider regularly provides, the infor-
lectual property or a license. The starting point
mation that is delivered upon request and under
must be that a smooth and efficient transition
which conditions (how and into what) research
of services has priority over alleged intellec-
can be performed.
tual property rights of the service provider. To overcome a potential deadlock it can be useful
III – Licences and intellectual property
to agree, separate from the discussion about
During the exit, disagreements may arise about
property rights, that the customer in any case
the use and ownership of documentation,
has right of use for the required data sets, docu-
methods and software code. Outbound service
mentation, and server images, etc. It is para-
Life-Cycle Management ‘inside’
provider. It was therefore agreed that the service provider is responsible for IT Asset Management (ITAM). Service providers also stimulate LCM with increasing financial incentives. At T-Systems, where SAP hosting is concerned, customers (which are themselves responsible for SAP licences) only retain the 30 percent discount for the private cloud environment if they keep up-to-date with new releases (n minus 1). This prevents customers from postponing an upgrade of their software licences (which customers themselves conclude with SAP) for budgetary reasons.
It is wise to start eliminating the maintenance backlog well before a possible retransition. Even better is to ensure that Life-Cycle Management (LCM) is ingrained in the deal. In order to guarantee that LCM remains on the agenda during an outsourcing relationship (and that the IT debt does not increase – for IT debt see the relevant chapter in the Outsourcing Performance Yearbook 2014), Robeco stipulated in the new generation of contracts that “if software is more than one major version behind (n minus 1) or hardware is no longer officially supported by the vendor (end-of-life), the service provider will migrate to the desired situation within six months, unless Robeco has explicitly stated that it will forego the migration”. In the case of Robeco, all hardware assets are owned by the service
14 outsourcing Performance 2015
These examples of contract innovation reduce the likelihood that the maintenance backlog increases, so that outsourcers get stuck with a very outdated IT environment during retransition.
mount that this right of use also applies to third
outbound service provider can help to ensure
parties, including the inbound service provider.
that the (often informal) transfer of important
This right of use – to server images, for example
knowledge goes smoothly at the operational
– is particularly relevant to cloud computing.
level – especially when unforeseen problems arise despite a good exit plan. Openness and the
IV - Relationship management
timely expression of expectations are essential
It is often the tone-at-the-top that lays the foun-
at all levels. A CIO should set a good example: he
dation for a smooth retransition. Good com-
therefore cannot let his employees do his own
munication and a good relationship between
dirty work when he himself is not on speaking
the outsourcer’s senior management and the
terms with the outbound service provider.
Licences and intellectual property: points of attention for the exit plan – Licences and intellectual property: points of attention for the exit plan. As a starting principle, stipulate that the intellectual property of everything that the outsourcer pays for lies with the outsourcer, or that the outsourcer is granted very broad license, including the rights to develop the relevant intellectual property further and transfer the license to third parties. The relevant intellectual property may include the adjustments that a service provider has implemented in order to keep old operating systems (OS) running that are needed for business-critical applications. It is a good idea to already negotiate this with a service provider at the tendering stage, because it doesn’t cost any money in terms of sales value of the contract. – Make agreements, which are as detailed as possible, about both the ownership and the transfer of all data and documentation (access logs, error logs, scripts, knowledge articles, etc.) that the service provider has generated in the operation as part of its services. – Establish how to deal with intellectual property rights concerning continuous improve-
ment, such as innovating management processes, improving knowledge articles or increasing the quality of data in tools such as the Configuration Management Database (CMDB). An outsourcer in any case benefits from shared rights. – If the service provider wants to claim intellectual property, it must make this known in advance and in writing, so that it is clear for the outsourcer what has to be negotiated about. – Also establish that the consequences for intellectual property are re-examined when there are changes during the contract period (such as mergers, acquisitions, company reorganisations, internationalisation or service innovations), with the principle being that the customer must retain maximum user functions. – Establish the right to acquire assets and software licences from the outbound supplier. This also includes contracts with subcontractors that the outbound service provider deploys for the services to the outsourcer. Also pay attention to the transfer of third-party maintenance contracts. – Ensure that there is a regular transfer of data and source code from IT systems to the outsourcer during the term of the c ontract.
PART 1 | Exit and retransitions 15
tinue to deliver for the ‘old’ prices as long as the
Exit references
customer has not been fully transferred to the
A positive exit reference can contribute to the confidence in a new service provider. By requesting a reference from former customers, valuable information can be obtained about the conduct and attitude of the service provider during an exit. When Vopak starts with a new outsourcing round, service providers are not only asked for two best practice customers as a reference, but also for two dissatisfied customers. Vopak interviews these dissatisfied customers about the cause, with customer share and the way in which the problems were jointly tackled also being discussed. As a result, Vopak has a good idea about the level of constructive cooperation exhibited by the service provider.
inbound supplier (including the application of graduated scales for reduced volumes).
New contract, new ambitions A new outsourcing contract often contains an ambitious wish list: new IT that perfectly fits the needs of the business and that is versatile, scalable and reliable. When existing IT systems are technically outdated and insufficiently documented, a large gap has to be bridged. However, a new contract must once again also produce cost savings. Cost savings are somewhat different from negotiating and obtaining discounts; the outsourcer does not need to change anything in its processes for this. A real saving implies a change in the way of working and the use of standards. Saving requires an active role from the buying
The outsourcer also faces the challenge of
party to change itself. It is therefore the respon-
keeping the outbound supplier – even after a
sibility of outsourcers to clean up prior to an
new partner has been chosen – motivated and
exit, instead of migrating end-of-life environ-
committed. An exit premium can be of assis-
ments to a new service provider. Outsourcers
tance: a reward for the outbound supplier when
are themselves responsible for the exit-read-
it cooperates properly with the transition and
iness and would be wise to reserve sufficient
the agreed objectives are achieved. An example
time for a retransition.
of this is that the availability and speed of the core systems continue to be in accordance with
The following persons contributed to this document
the SLA during the wind-down period, when
in a personal capacity as reviewer: Erwin de Bont,
the old contract has expired. In the case of an
Ton Ligtvoet, Gijsbert Nieuwland, Polo van der Putt,
exit premium, specify precisely when and which
Bart van Reeken, Peter van ’t Verlaat and Patrick Wit.
bonus is paid: after the expiry of the contract – for example, when transition deadlines are not met – the outbound service provider sometimes still provides basic services that are important for the business continuity (see the case study about Astellas and Capgemini on page 18). Such a discretionary bonus could already be incorporated into the business case for outsourcing at the start of the contract, together with the provision that a service provider should con-
16 outsourcing Performance 2015
On 15 May 2014, Platform Outsourcing Netherlands (PON) published a new code of conduct for retransitions, based on the proposal of PON’s Transition Study Group: see http://bit.ly/1BgGvpm
For outbound suppliers it is financially attractive to be recalcitrant
PART 1 | Exit and retransitions 17
How a relationship improves during an exit CASE ASTELLAS and CAPGEMINI
After pharmaceutical Astellas had decided to consolidate its international IT landscape, it chose to work with other service providers. Astellas and service provider Capgemini made an effort to ensure a professional exit. Astellas Pharma EMEA (Astellas) operates in 40 countries across Europe, the Middle East and Africa, and is the regional business of Tokyo-based Astellas Pharma Inc. The Japanese company is a merger of Yamanouchi and Fujisawa (2005) and has annual sales of 8.3 billion Euro (FY2013). Astellas focuses on six therapeutic areas as a priority for improving the health of people in the EMEA region: Urology,
Marcel van Zijderveld
Oncology, Transplantation, Anti-infectives, Pain management and Dermatology. In 1999, Yamanouchi hired Capgemini for the design, implementation and support of a new SAP-solution. The SAP solution was used by Yamanouchi (and then Astellas) for finance, sales, back-office and supply chain processes and also some HR processes. Capgemini Service Delivey Director Marcel van Zijderveld was involved from the start. In 2004 it was agreed to broaden the scope of the deal by outsourcing SAP application maintenance and hosting to Capgemini. In this setup, Capgemini would support the hardware owned by Yamanouchi.
18 outsourcing Performance 2015
‘We had decided to support Astellas as well as possible’
‘it’s about the conscious decision to create a positive exit’
Andrew Warren
This contract was renewed in 2008 for five
I give a lot of credit to the Capgemini manage-
years, including a migration of SAP to a
ment for agreeing on and delivering a profes-
Capgemini private cloud solution.
sional exit.”
Global IT model
Knowledge sharing
Before the contract expired, it became clear
Van Zijderveld: “After the partner selection
that Astellas wished to consolidate all IT ser-
by Astellas a due diligence process started.
vices across the different Astellas regions –
During this step we tried to put as much infor-
Asia, Europe and the United States. Andrew
mation as possible on the table for the new
Warren, Senior Director, Business Systems
partners. We had decided to support Astellas
Astellas: “The decision of Astellas to move away
as well as possible.” Capgemini took care of
from Capgemini was based on Astellas’ choice
transferring application knowledge regarding
for a global IT model – we are a Japanese head-
the European SAP operation to the new SAP
quartered organisation and we were looking
partner Accenture and the new infrastructure
for a global partner with a clear presence in
management service provider IBM. Warren:
Japan. Capgemini didn’t have this presence – so
“The Capgemini team acted very construc-
the decision not to appoint Capgemini wasn’t
tively. They helped us a lot with the migration
based on bad performance.”
of SAP application support to Accenture. Our worry was that Capgemini would be not very
Marcel van Zijderveld: “Despite the disap-
proactive or flexible, but they actually made a
pointment, during and after the tender we
success of the knowledge transfer. They helped
focused primarily on continuing the services.”
Accenture to ask the right questions. We
Warren: “After having selected our new part-
were in the good situation that we could ask
ners IBM and Accenture, we discussed with the
Accenture to contact Capgemini when the new
Capgemini team what the exit should look like.
team was confronted with complex issues.”
PART 1 | Exit and retransitions 19
No change in teams As of June, 2013, the functional management of SAP was transferred to Accenture. The success of the functional transition lay in Capgemini’s decision to continue the close communication and collaboration with Astellas. Capgemini deliberately chose not to change the team formation; therefore the team that was involved in the migration from the old to the new platform in 2008 was also responsible for the transition towards Accenture and IBM. Warren agrees: “On a management level, the responsibilities of the Capgemini team were kept the same. Their contribution to the exit – being open, reliable and proactive – exceeded my expectations.”
Strong and open relationship Due to external factors, Accenture could not take over the technical application support as originally planned. As a result of the technical delay, Astellas was confronted with significant challenges, the relationship between Astellas and Capgemini gained new momentum as a result of the consistent support of Capgemini. One of the KPIs was the performance of the Capgemini project team during that transition. Based on good performance and customer satisfaction the internal customer satisfaction measurements – Capgemini earned merit payments. Warren: “In hard times you learn to know who your friends are. They stood by when times were difficult.” What is the critical success factor for this exit? Warren: “It’s about the relationship, which is built on trust; secondly it’s about the conscious decision to create a positive exit. So it’s all about behaviour, not about contract details. In five years, the content of a contract might become outdated; ideally a relationship develops itself during the contract period. Our most important lesson we take into consideration in our new partnerships with IBM and Accenture is that it’s all about creating a strong and open relationship.”
20 outsourcing Performance 2015
The perfect exit? CASE BOL.COM AND SCHUBERG PHILIS
After years of outsourcing, bol.com decided to manage its IT infrastructure in-house again. Jurrie van Rooijen, CIO bol.com, looks back at the collaboration with Schuberg Philis and the exit: “We were a real challenge for Schuberg Philis, always seeking the limits of the collaboration. Schuberg Philis played an important role in the coming of age of bol.com.” Jurrie van Rooijen: “We want to make bol.com the best shop for our customers every day. A lot of money is invested in new applications. We launch 2,000 new features every month which always have to be better and faster. For innovation not only software development, but also IT operations is crucial. We initially didn’t
Jurrie van Rooijen
have the scale to keep our own platforms live 24x7. In the early days, bol.com mainly focused
Schuberg Philis about the future. The con-
on software development and so IT operations
clusion was that bol.com wanted to bring the
were then outsourced to Schuberg Philis. For
infrastructure operations back inside. Bol.com
seven years, Schuberg Philis ensured that
had reached sufficient scale to manage the
bol.com’s critical systems – the infrastructure
infrastructure in-house again. After the exit,
and middleware and thus our webshop –
the aim is for bol.com to innovate even faster
remained on air round the clock for our cus-
and introduce new features on the market.
tomers. All that time, we enjoyed good and
Better cost control and the realisation of even
intensive collaboration.”
shorter lines also played a role in the decision to insource. If you outsource your operation,
Considerations
in a certain sense that leads to a lock-in: two
“Bol.com believes that the difference can be
years easily fly by before you can turn the
made with the things that the company does
switch. This makes it transparent: sourcing is
itself. Therefore, in 2012, we started working
about strategic choices.”
on the business case: insourcing versus outsourcing. Various discussions took place with
PART 1 | Exit and retransitions 21
‘we enjoyed good and intensive collaboration’
22 outsourcing Performance 2015
The exit
organisations sitting close together and enable
“With the announcement in 2012 that we were
them to exchange a lot of knowledge.”
separating, we agreed on a number of rules of conduct. Thus Schuberg Philis stated from the
About Schuberg Philis
outset that it should act primarily as advisor
“Schuberg Philis is a highly structured and pre-
during the exit and would do everything pos-
dictable organisation with high quality profes-
sible to help us on our way. That was good; it
sionals. It is also easy to explain why: Schuberg
has also forced us to tackle things ourselves.
Philis must ensure that customers’ systems have
It has been quite a learning curve for us. One
a 100 percent functional uptime. The culture
and a half years was allotted for the project. In
of Schuberg Philis is focused strongly on risk
a short time, we have built up a team of experi-
management, security, zero errors. Seven years
enced people from outside in order to manage
ago, the cultural differences between bol.com
our own platform. In addition, the management
and Schuberg Philis were considerable. Bol.com
of Schuberg Philis sought an exit with a report
was a young start-up with a pragmatic, entre-
mark of nine.”
preneurial mindset and rather less structure. We were a real challenge for Schuberg Philis,
“Schuberg Philis has been very successful in
always seeking the limits of the collaboration.
not only keeping the platform on air, but also in
For example, we frequently test what works
assuming a consulting role during the migra-
and does not work with customers. We have a
tion. They didn’t desert us and didn’t drop in
slightly different risk appetite. Nevertheless, we
performance. They ensured their team was
have converged in recent years; the coopera-
dedicated to working for us until the very last
tion with Schuberg Philis has given us a lot. We
moment. That team also had to let go of its own
have often looked at the way in which Schuberg
baby. There are I think many companies that
designed the processes, such as the monitoring
would have said: ‘you’re no longer doing any
service, for example. There is now a good basic
business with us, so I’ll drop you and focus on
structure enabling us to run our own operation;
other customers’.”
we have more structure in processes and tooling. Schuberg Philis played an important
The migration
role in the coming of age of bol.com.”
“We delivered the test environment and then took the production environment under our own management. The migration is an important component within this. It consists of thousands of steps, in which many people are involved: a lot can go wrong. The trial migrations yielded many practical lessons. The result was that the final migration to the new infrastructure went smoothly three weeks later. At the time of the switch at four o’clock in the morning, there were seventy people working here. The Schuberg Philis people also continued until deep into the night during migration. It is important to have the technical experts of both
PART 1 | Exit and retransitions 23
PART 2 | WORKSPACE
The workplace turned upside down Written by Marco Gianotten
At the beginning of the meeting, a manager opens two notebooks with the announcement: “one from my work and one to work with”. He then picks up a USB stick to transfer files from the company-issued notebook to the much nicer, faster notebook that he had purchased himself. Welcome to the schizophrenic world of busi-
is tough luck for the end user. After all is said
ness versus consumer technology. These two
and done, security and the company’s own IT
worlds are now impossible to completely sepa-
architecture take priority and separate choices
rate. How do you keep tabs on IT consumeri-
are therefore always made for integration,
sation in the complex world of Corporate IT
software distribution, access management and
where security is paramount? The corporate
virus protection. Taken on their own, these
workplace is a nerve terminal where the func-
were all valid decisions, but we now know that
tionality of sometimes hundreds, often pro-
in combination they do not benefit produc-
prietary systems, converges. That is the legacy
tivity or user experience. The same end user
that you as an IT organisation drag along with
can, as a consumer, easily log onto websites
each new generation of workstations. The
with his Facebook or Google account, does
answer lies in an open mind and in capitalising
everything by means of fast internet (without
on new opportunities. The most difficult thing
a Virtual Private Network - VPN) and is com-
is giving up everything that you consider holy,
pletely accustomed to easy mobile working. In
everything that feels so comfortable because
addition, companies are increasingly allowing
you conceived and designed it yourself.
employees to use their own devices such as smartphones and tablets at work: Bring Your
What is possible ≠ what is permissible
Own (BYO). However, this BYO policy is nothing
During the past two decades, the design of
to get excited about when you are allowed to
workplaces within large companies has been
use your own devices for business purposes,
determined by specialists and is strongly influ-
but their use is limited to email and calendar.
enced by increasingly stringent requirements
And what if you work with your own tablet or
in terms of security and privacy. The fact that
notebook in the office, but only can use the
the company-issued workstation is so incred-
slower guest Wi-Fi? Users are extremely irri-
ibly slow, with a start-up that takes forever and
tated about having to walk around with two
a login procedure that gets on your nerves,
phones, about the poor mobile coverage in the
24 outsourcing Performance 2015
Users are extremely irritated about having to walk around with multiple and old devices PART 2 | WORKSPACE 25
office and projectors without a plug for their
delivered to the end user through a browser;
MacBook. It seems that BYO is synonymous
during their working hours (i.e. within their
with figure it out for yourself.
style of working) users are increasingly able to manage with internet-centric functionality
The most important conclusion: the gap
alone and no longer have to launch their virtual
between what is permitted for business pur-
desktop. Presumably, a hybrid form will remain
poses and what is possible in the real world is
in existence for a long time in many organisa-
increasing, while at the same time consumer
tions: largely internet-centric, partly virtual
and business users are melting together.
server applications, and sometimes also a few
Together they form a new identity that we
applications that run on physical servers.
know as the business consumer. Companies are increasingly changing into knowledge-intensive
Who will pay for the transformation?
organisations, where these business consumers足
The choice of an internet-centric workplace
have to rely on flexibility, collaboration and
requires fundamental choices and investments
low-threshold resources in order to be pro-
in the application landscape. Who will pay for
ductive. The existing corporate workplace is
this? Since the physical workplace with generic
becoming a millstone around their necks: out-
applications is generally provided by the IT
dated, expensive and with a poor assessment
department, while business applications are
from the end users and managers in the busi-
owned by the business, this question is rel-
ness. Many CIOs recognise that a new start for
evant to the business case. Adapting the often
the workplace is essential.
outdated business-critical client-server applications for Windows 7 is often paid for by the
Looking for a breakthrough
IT organisation and not by the business. What
What should the new generation of business足
incentives are there for the business to go along
workplaces look like? Will you virtualise all
with the transformation to internet-centric?
workplace functionality (Virtual Desktop
Often none, although they do put a lot of pres-
Infrastructure - VDI) or opt for a real internet-
sure on the IT organisation because the work-
centric workplace with web applications? While
place is too expensive and the user experience
VDI was the standard response in recent years,
is declining. CIOs will need the support of the
it is interesting to see that more and more CIOs
business and the rest of the senior management
and their teams are expressing their support for
(including the CFO) for the financing of the
the internet-centric and thus browser-based
transition to internet-centric. Continuing in the
workplace. This makes it possible to offer ser-
old way is not an option: if the IT organisation
vices to users from various private and public
refuses to play along, the business will go shop-
clouds, regardless of device. The end result
ping elsewhere, giving rise to shadow IT. The
should be an improved user experience, shorter
choices outside the company are now already
learning curves, faster innovation and lower
overwhelming and are becoming even greater:
costs because the major cost drivers of the old
with the push of a button, you have as much
generation of workplace are dealt with: server
cloud capacity as you want. And out of sight of
infrastructure, software licences, networks and
the IT department, small businesses full of tal-
especially the application landscape. Many CIOs
ented whiz kids create new mobile applications
now want to take this step or have already set to
in no time. If this trend continues, the security
work: more and more corporate IT services are
and continuity risks will increase.
26 outsourcing Performance 2015
Trends in workspace management
This no longer involves system integration, but
The workplace of the future – and that starts
rather the merging and coordination of the ser-
today – is a workplace that optimally sup-
vices, i.e. service aggregation. This becomes a
ports various types of users (such as non-office
new element of workplace management, where
workers and managers on-the-go) and various
consistent data access by means of standardised
working styles. Preconditions are of course
protocols is paramount. The new workplace is
manageability, security and low costs. There
accompanied by new dynamics: the back office
are eight trends concerning the future-ready
keeps track of what is running where and why;
workplace to be reckoned with. The most
in the front office of the workplace the focus is
important force is no longer a push from the
on the availability of applications and data.
IT organisation (“IT decides what is good for the user”), but a pull (users also determine or
Trend 3 – Contextual access management
arrange it themselves).
The conventional approach of Identity & Access Management (IAM) up until now was based on
Trend 1 – Mobility first
the profile of a user: the rights depend upon
Mobility is leading in the workplace. Users are
the user, not on the context in which access is
not only opting for mobile working, which has
granted to specific services or data. In the near
implications for the connectivity requirements.
future, not only the person but also the device,
IT services also increasingly have a mobile
the location and the time are relevant to deter-
character: for example, the management of
mine whether a user can access services and
devices and the access to data, the provision
data. An employee who receives access within
of functionality in the form of mobile apps and
an office environment and within office hours
making content suitable for use on all devices.
will not automatically be granted access on a
Processes such as Mobile Device Management
Saturday using a public Wi-Fi connection. The
(MDM), Mobile Application Management (MAM)
greatest challenge for the implementation of
and Mobile Content Management (MCM) come
contextual access management lies in the clas-
together in Enterprise Mobility Management
sification of data.
(EMM).
Trend 2 - Service aggregation
Trend 4 – Data classification becomes more important than a firewall
With the separation of hardware and software
The majority of the data within companies is not
the workplace assumes the character of a
confidential. Why employ the same authentica-
service; virtualised and/or via a browser.
tion for this as for data with a medium business
More and more CIOs are ultimately opting
impact or confidential classification? The dis-
for conversion of the application landscape to
tinction between the big, bad outside world on
browser-based services and apps. The logical
the one hand and, on the other, the safe world
consequence of Software-as-a-Service (SaaS)
behind the firewall, where all data is accessible
and possibly also Platform-as-a-Service (PaaS)
with the appropriate level of authorisation, is
is that older core applications are switched off,
no longer tenable. If you want to abandon the
rebuilt for html or replaced by standard solu-
use of VPN for the majority of your workplace
tions from the market. Over time, the work-
services, you must regard all networks as dirty
place consists of dozens of services that need to
(and devices as untrusted) and therefore put the
be merged into an integral whole for the user.
security of data first.
PART 2 | WORKSPACE 27
Top Secret
Secret
Confidential
Unclassified
Restricted
Trend 5 – Define connectivity from the perspective of the user
Trend 6 – Support for end users becomes omnichannel
It was not so long ago that telephony was the
Self-service, (video) chat and e-learning are
responsibility of facility management (and in
emerging as support channels besides the tra-
some companies that is still the case). A mobile
ditional helpdesk. Forums, where users help
phone ‘was’ only intended to make calls and
one another (peer-to-peer or user-to-user),
fixed and mobile communications were sepa-
are also gaining in popularity. With omnichan-
rated. That time is past; the classification into
nel support, these different forms merge seam-
categories like WAN, LAN, mobile and fixed no
lessly together and the end user determines
longer suffices. With Unified Communications
the channel, time and place. The user experi-
(UC) users combine voice, data and video in their
ence (no fuss and convenient) and effective-
communication and collaboration with others.
ness of the support provided (resolved quickly
The separate and strict partitioning of commu-
and properly in one go) are success factors.
nication services stands in the way of workplace
Shutting down a service desk or the erection of
innovation and intelligent cost reduction. ‘User-
other obstacles to force users towards self-ser-
facing connectivity’ (voice, data, video, SaaS) is
vice (channelling) does not work. Users must be
closely associated with the workplace. For users
able to quickly and easily find intuitive working
too it is a logical whole. From the perspective
solutions for their problems. A user who calls
of the user, there will soon only be two relevant
to request synchronisation of passwords or
networks: Wi-Fi and 4G.
to place an order from the services catalogue
28 outsourcing Performance 2015
can arrange this more quickly and cheaply
to migrate to Office 365, while these new col-
with the aid of self-service. You can stimulate
leagues use Google? In that case, what are the
the use of self-service by explaining the pos-
costs and the learning curve of a forced migra-
sibilities during a launch period by means of
tion? At the level of collaboration (calendar,
co-browsing. For the helpdesk, the use of self-
documents, data), integration is becoming ever
service can be a KPI. In addition, the search
easier. Instead of determining one standard
behaviour and the search time of users can be
internally for the users, you can also embrace
monitored. This offers the opportunity to intro-
multiple market standards and integration-
duce a click-to-chat and click-to-call button
as-a-service. The trend towards any device,
after a certain amount of time, which enables
any application and any cloud stands in stark
you to offer the user help with finding the right
contrast to the old world where organisations
knowledge article.
manage devices, networks and data centres themselves or have this done for them.
Trend 7 – IT Consumerisation 2.0 own tablet or notebook, but will also be able
Another approach to sourcing the workplace
to determine which solutions they want to
These eight trends illustrate that the corporate
work with for collaboration and productivity.
workplace is rapidly changing. CIOs will have
Do-it-yourself then applies to hardware (BYO),
to look at the workplace in a different manner
apps and data. New Bring-Your-Own acronyms
(that is, all categories are connected) and must
are BYOA (Build Your Own App), BYOI (Bring
start from the vision and dominant experience
Your Own Information, or public data sources)
of service providers (they are the experts).
and BYOID (Bring Your Own IDentity). Users
In addition, they must have the courage to
will increasingly work with data from public
make difficult choices. The workplace will be
data sources and a set of Application Program
turned upside down and the question is: when
Interfaces (API) in order to access them. By
will you accept that reality and take action?
making internal and external data available with
During the redefinition of the workplace, why
Master Data Management (MDM), users can
would you still start with an extensive market
build their own applications (BYOA) together
consultation and then send out an RFP? Start
with app developers. Master Data Management
by developing your own vision and make
will become an important topic for IT in the
clear choices. For example, about the existing
coming years.
application portfolio: to what extent and in
In the future, users will not only choose their
which phases would you like to access each
Trend 8 – Any device, any application, any cloud
item as a web application? From omnichannel
Flexibility means that you should be able to
from connectivity to your application portfolio:
quickly switch, change and go along with inno-
everything comes together in the workplace.
vations. Nobody wants to be tied down in
I-bridge (the IT organisation for Randstad,
someone else’s private cloud and so minimum
TempoTeam and Yacht, see the case on page
lock-in is important (also because of an exit).
30) is also focusing on the internet-centric
Standardisation is only feasible with sufficient
workplace: not because it is easier, but simply
support. When there is a company takeover or
because there is no other choice.
support to Mobile Device Management, and
merger, why should you require the new users
PART 2 | WORKSPACE 29
Goodbye SLA – focus on end user CASE RANDSTAD and KPN
The world of work is constantly changing; the
“During the past year, I-bridge was faced with
primary process of HR service providers is
many persistent incidents that had a significant
shifting towards the internet. It is therefore
impact on end users. Examples include prin-
understandable that Randstad’s IT landscape is
ting failures or slow thin-client workstations.
also changing rapidly. I-bridge, the IT service
It took I-bridge a lot of effort to cope with all
provider of the Randstad Group since 2002,
the challenges, leaving little time for innova-
has already for some time been outsourcing its
tion, let alone restoring order in the basic IT.”
workplace and helpdesk support to KPN. The
There were also still backlogs in workstation
digital revolution within the Randstad com-
functionality. By no means all employees in the
panies in the Netherlands has led to a shift in
Netherlands possessed a business mobile phone
focus from SLAs and KPIs to serving the end
or laptop. Valk explains: “Some intermediaries
user in the best possible manner.
were unable to work from home or consult the CRM system when working at the customer’s
Michiel Valk, Managing Director of I-bridge
premises. Another consequence of the backlog
since 2012, has been closely involved in the
in the digitisation process was that office staff
transformation process.
had to spend too much time on typical back
‘Satisfied end users are productive end users’ Michiel Valk 30 outsourcing Performance 2015
‘We expect that the traditional service desk will no longer exist in 2020’ Peter Wienbelt
time for other important core functions, such as
Basis in order: business makes new wishes
recruitment or contact with customers or tem-
By first choosing a stable IT environment, space
porary staff.”
was created for the next stage of IT innovation:
office tasks. As a result, the business had less
the transformation of the workplace and the
Clean up first, then update
complete overhaul of the IT support. It is stri-
I-bridge decided to focus first on solving the
king that – after the basic IT had been dealt
most serious problems by updating many
with – the business seemed to be emancipated.
devices (thin clients, laptops), implementing
Valk: “People came with more and more new
upgrades and increasing the bandwidth of data
questions and wishes. For example, they wanted
connections. The proposed plan to entirely
to expand online opportunities. You need solu-
update all workstations was cut back to just an
tions such as sub-sites, campaigns and the use
upgrade to Windows 7, so that priority could be
of social media for this. Up until then, the exis-
given to creating a more stable infrastructure.
ting online environment was too generic and with too little focus on profiles and targeting.”
“From our monthly end user satisfaction measu-
Another wish was in the field of cooperation, for
rements it emerged at the end of 2012 that the
example through the use of multimedia, such as
results of that choice were positive,” explains
video chat or video conferencing. Furthermore,
Peter Wienbelt (Client Director, KPN). “The
the Randstad organisation wanted to reduce the
number of calls to the service desk fell, while
time required to perform support processes by
satisfaction increased. However, the number of
means of further digitisation.
major incidents – those that affect more than 20 percent of the user population – was still
Digitisation requires new IT
too high in 2012.” From 2013, we therefore con-
These ever changing end users made clear to
centrated on the careful analysis of incidents,
I-bridge and KPN that their cooperation should
which led to the implementation of even more
mainly be focused on reducing the distance
upgrades and application modifications.
between I-bridge and the business. Therefore,
PART 2 | WORKSPACE 31
I-bridge was not so much guided by the theme
Change in the cooperation
of ‘cost savings’, but rather by the most impor-
Both I-bridge and KPN have modified their
tant driver: a (more) productive end user. In
partnership. Wienbelt: “It is really important
the transformation to a new, modern busi-
that everyone gets together often. In that way
ness infrastructure, the emphasis has shifted
you are better able to understand one another’s
from working with traditional SLAs and KPIs
context and you maintain greater insight into
to cooperation focusing on end user expe-
requirements. Many improvements can be
rience. Valk: “With its IT solutions, I-bridge
traced back to the means of cooperation, or the
aims to create maximum value for the opera-
relationship. But also having a shared vision –
ting companies of the Randstad Group in the
for example, about entering and setting up self-
Netherlands and believes in two principles:
service – is crucial, especially when you want to
satisfied end users are productive end users
update and innovate together.”
and enterprise IT = consumer IT. Randstad is an employer that employs many young people.
Valk: “In an open partnership there is plenty
They are used to intensive personal use of the
of space to work together on the development
latest technology: the latest devices, social
and implementation of innovations. Formal
media channels for communication, diverse
SLAs don’t fit into this quite as well, however.”
apps, applications and cloud solutions.”
Wienbelt: “We expect that the traditional
The workplace: a major upgrade KPN and I-bridge have drawn up an ambitious agenda in order to update the workplaces within the Randstad Group in the Netherlands. Randstad is an early adopter in the field of cloud applications and from 2013 switched to Google Apps for Business in phases. The digitisation of the administrative processes was also implemented further, both towards customers and towards tem-
randstad is an early adopter in the field of cloud applications 32 outsourcing Performance 2015
porary employees. In addition, Choose Your Own Device (CYOD) was rapidly rolled out and a network update was implemented, so that wireless multimedia use was possible. In the meantime, KPN and I-bridge are designing a self-service portal with an extensive knowledge base. The introduction of interactive user forums and the development of apps for the business are also planned. Important is the establishment of the iservice point, a desk for end users in the Randstad headquarters. Employees are not only able to have their problems solved, but can also receive advice about use. Staff from the service desk can also be found at the iservice point; they are concerned with problem management, changes, site support and knowledge management. The iservice point will eventually also be involved with the training and education of employees. The impact of every change is monitored by means of continuous research into end user satisfaction.
‘The presence of a good IT toolbox also makes you more attractive as an employer’ service desk will no longer exist in 2020. This
data, including logging and trend analyses, reli-
will be replaced by another added value: exam-
able information about incidents becomes avail-
ples include knowledge management, analyses,
able, so that you are better able to search for
processes. These are decisive for productivity
sources of interference together. Subsequently,
and end user satisfaction and thus also have a
in accordance with the plan-do-check-act
value that you can market. We are now freeing
cycle, we are mainly focused together on con-
people for the analytical side of the service
stantly examining what is happening. Satisfied
desk. In addition, agreements about developing
end users lead to less hassle. In this respect,
knowledge have been made in the new contract.
you must also look further: there is not only less
New incidents are by definition converted into
absence owing to illness and less staff turn-
informed articles, so that information can be
over, but the presence of a good IT toolbox also
found the next time it is required. Therefore
makes you more attractive as an employer.”
lately we have had little discussion about SLAs.”
Contract: keep it simple Valk: “The heart of the new agreement has been simplified: you can summarise the cooperation in a few sentences. The term of the agreement is mainly determined by the idea that it is a good idea to evaluate properly once every two or three years; not because you absolutely want to re-issue an RFP, but because reality is changing rapidly in the world of end users. For that matter, five-year contracts in the IT world are anyway much too long. The reduction of calls is an important and shared objective, as well as the development of knowledge as a basis for self-service. Together with KPN, we are permanently examining user behaviour. By using big
PART 2 | WORKSPACE 33
PART 3 | ECOSYSTEMS
Transformation: from multisourcing to ecosystem Written by Mariël van der Linden
Up until now, outsourcing deals have primarily focused on the lowest price and efficiency. A solid contract, a comprehensive management organisation and a complete package of SLAs with bonus/penalty schemes should steer everything in the right direction. This model is not always successful and certainly not sustainable. The future lies in partnerships with the starting point being shared interests, openness and trust. Ecosystems are entirely in keeping with this. Additional advantage: thinking and acting on the basis of an ecosystem is conducive to innovation. The way in which we as people within organisa-
doing, the context within which we are doing it,
tions design ‘cooperation’, originated from our
why we are doing it, what others are doing, for
long-standing opinions about value creation:
what reason and what the result is. This makes
realising economic value in the most efficient
cooperation rather more difficult. People are
possible manner. In our pursuit of efficiency,
alienated from their work and from the company
people outsource tasks so they can focus on their
where they work, leading to the loss of a lot of
own specialised task. This aim does produce effi-
the connective power and pride. In the past we
ciency gains in the short term, but also leads to
were able to check what we were doing when
extensive fragmentation and compartmentalisa-
performing the task, because we saw what the
tion of activities, while simultaneously leading
effect was. Now we have to have faith that the
to value impoverishment in the grey area of
party (or parties) to whom we have outsourced
ancillaryactivities. These ancillary activities are
the task are also able to perform it satisfactorily.
of great value, but often remain invisible. The result is that they are only missed when they are
Therefore, we establish a regulatory body when
no longer performed.
outsourcing IT. But who then monitors this body? And who provides the glue between all
Efficiency stands in the way of cooperation
the fragmented pieces? The fact that this is a
Fragmented tasks without context arise by
tions have in coordinating outsourced processes.
cutting up business and work processes too
Major incidents make it painfully clear that
much. The link to the ‘why’, the wider aim of it all,
parties have not been able to successfully shape
has disappeared. We no longer know what we are
the intended collaboration.
34 outsourcing Performance 2015
challenge is evidenced by the difficulty organisa-
All parties are committed to the ultimate goal of the group
PART 3 | ECOSYSTEMS 35
The connected world Our society is becoming increasingly complex
Successful ecosystems innovate
due to the influence of social media and new
In their daily lives people form part of several ecosystems: family, sports club or the workplace. Ecosystems are always there, whether people are aware of them or not. Ecosystems based on forms of cooperation are also visible everywhere around us. For example, within the ‘sharing economy’ where the user (employee or citizen) plays a key role in a network. With apps like Peerby, for example, you can borrow things from people in your neighbourhood. Other successful examples include Airbnb and SnappCar. Within these collaborations, feedback loops, focusing on behaviour, are used to continually remind participants of the greater goal. Peerby, for example, highlights the fact that it is easy and fun to lend things to one another. If a Peerby borrower returns things either broken or dirty, they will probably receive a negative review on the platform and then can no longer borrow anything. The platform thus ensures that the behaviour is in keeping with the values of the ecosystem. The ecosystem itself organises this interdependence and connection.
technological possibilities. Everything and everyone is connected more and more and the mutual dependence between people and organisations is increasing. The connected society has a major impact on our way of life. The world around us has become accessible and transparent. As a result, the boundaries between people and organisations and between organisations themselves are blurring. We look differently at work, at organisations and the role they play in our environment. Organisations are no longer individually able to fully innovate. Value creation and innovation are increasingly shifting from separate organisations towards ecosystems. Nevertheless, our vision of cooperation is often still traditional in nature. Thus all sectors try to realise optimisation and innovation with partners within their own sector. However, because of the coherence in our society, it is more logical to transcend sectors. Sectortranscending thinking and open innovation is the best way to solve the major social issues (for example, healthcare, energy supply and the financial sector). The key to innovation lies in the creation of new combinations. That starts by restoring the link with the why, the greater purpose and a shared ambition that transcends the interests
interaction with one another, they together
of all stakeholders. To this end, we need to
form a functional unit. There is no body present
demolish our existing thought frameworks and
that keeps the cells or micro-processes in their
silos. The second step is the formation of new
place; they organise their own coherence. All
ecosystems with partners who together want to
cycles in nature are intertwined. The ecosys-
achieve this ambition.
tem continually finds the best solutions for the constraints and opportunities that arise, and
Breeding ground for innovation
with the least possible waste of energy and
Ecosystems – from a biology perspective – are
materials. Said another way: an ecosystem is a
dynamic communities of plants, animals and
network of entities that depend on each other
micro-organisms in an environment. In their
to survive. In complex biological ecosystems
36 outsourcing Performance 2015
Cooperation in ecosystems requires different competencies special things occur that are impossible at lower,
– The organisations involved make a value case
simpler organisational levels. Changes in micro-
in which all the parties’ value streams are included and coordinated.
processes thereby create macro effects. New opportunities arise that cannot be traced back
– The organisations involved are equal partners in the network, contributing individual value
to the properties of the underlying systems.
and extracting collective value.
Connecting
Ecosystems of organisations also form a sound
Effective partnership
basis for renewal and innovation. Various
A successful ecosystem ensures that the
organisations join forces in new ecosystems,
behaviour of the elements remains in keeping
thereby achieving a breakthrough in problems
with the values of the ecosystem. The ecosys-
and issues. The problems in one sector can be
tem itself organises this interdependence and
solved with the knowledge and resources of
connection. In addition, new connections and
the other sector. However, we must connect
possibilities also arise within an ecosystem.
them together first to find this out. Fortunately,
Things are different within organisations.
people – unlike microorganisms – are aware of
Traditional forms of cooperation between
the existence and potential of ecosystems. This
organisations (such as multi-vendor sourcing)
offers both support and opportunities:
usually start from the zero-sum paradigm.
– Everyone within an ecosystem is aware of the
Here, the purchaser puts the seller under pres-
great ambition and purpose of the ecosystem
sure to offer a discount. The buyer gains a
and knows exactly what its added value to
little and the seller loses a little, but the sum
the whole can be. It is openly discussed there.
of the two figures is still zero: the buyer has
The goal is too large to be tackled by only
gained what the seller has lost. That is far
one party.
from a common goal, and also constitutes an
– The why (context and ambition) and how
obstacle to innovation. While zero-sum mainly
(coherence) of the ecosystem give meaning
results in optimisation and fragmentation, cre-
to its own contribution. All parties are com-
ating and connecting is the focus in the case of
mitted to the ultimate goal of the group.
cooperation in ecosystems.
PART 3 | ECOSYSTEMS 37
Business as owner, IT as facilitator
the focus of IT policies and solutions is shifting
Jointly working towards a solution that has
towards ecosystems; the CIO is thus becoming
value for everyone; that is what collaboration
the most important facilitator of cooperation
within ecosystems is all about. IT fulfils an
for the entire ecosystem.
important basic condition in this respect: it can be regarded as the glue that can provide for
The IT department plays an important role in
both connection and for innovation. IT allows
facilitating this cross-organisational collabo-
for connectivity, communication, data and
ration: examples include the realisation of the
information exchange between the parties.
final technical solution and ensuring the optimal performance of information systems. The
Within or between organisations new part-
bulk of the work, however, is concerned with
nerships are often initiated from the business,
足changing the procedures in business processes
with the IT department then having the task of
and reaching agreement on information sharing
facilitating and organising this. It is clear that
within the ecosystem. These themes that tran-
38 outsourcing Performance 2015
Transformer tips – Formulating a shared ambition is key. The results should have considerable added value for all participants. The strength of the joint ambition appears when there are setbacks and obstacles. These should therefore go much further than just ‘earning more money’. – Support of individual boards of management of participating organisations is essential in order to level the walls between organisations and opposition within organisations. Without this support, the chances of enduring success are low. – Organisation-transcending projects within ecosystems are business projects, not IT projects. The majority of the work concerns the reconciliation of culture, processes and behaviour. Only a small part of the work concerns the actual realisation of the solution. – Discussions about individual organisational interests and higher ecosystem interests keep returning. If the greater goal produces added value for all those concerned, that is not a problem. – Ecosystem projects lead to changes in existing practices and supply chain pro-
scend the organisation can only be pickedup on and agreed by the business representatives. The questions involved include: – how is cooperation shaped in the new situation? – which roles do the different organisations
cesses. Grey, unwritten rules possibly become transparent and visible. This can lead to opposition or resistance in people within the ecosystem. A good communication plan about the new agreements, the changes in processes and practices is important to eliminate this resistance. – Sharing data and information within the ecosystem is exciting at the start. It creates a lot of discussion about ownership, access rights and competitive position of the individual organisations. Proper agreements should be made so that the barriers to sharing are removed. – Every attempt to introduce structure within the cooperation is outmoded at the time of trying. That is because none of the parties are the sole owner. All steps are determined and taken in consultation with one another. – Mutual relationships remain complex and are redefined every time. Flexibility and ‘the ability to let go’ are continuously tested for everyone. – Trust and open communication together form the engine that initiates and maintains cooperation.
– who can see that information and what is done with it? – which interests are there from the various organisations? – how can we bring these into line with the ultimate goal and the shared ambitions?
play in this? – how do we deal with data and information sharing? – who is the owner of information?
These issues will have to be discussed in detail with all business stakeholders before a technical solution emerges. Ecosystem projects are
PART 3 | ECOSYSTEMS 39
thus always business projects, and ownership,
Reading suggestions
control and participation from the business is
– Baken, N. (2014). De oplossing van de crisis
essential in order to produce innovation within the ecosystem.
New competencies Cooperation in ecosystems requires different competencies from participants, confidence among the players, the abandoning of the traditional negotiation strategy (‘tit for tat’) and perseverance and commitment with respect to
kost niets. http://www.manifestnicobaken.nl – Kaats, E., Opheij, W. (2012). Leren samenwerken tussen organisaties. Vakmedianet, Deventer – Kolind, L., Bøtter, J. (2014). Unboss. Vakmedianet, Deventer – Mulder, A. (2014). Wat is leven? Queeste van een bioloog. Arbeiderspers, Utrecht – Sinek, S. (2009). Start with Why: How great
the initial points of departure. The risk of not
leaders inspire everyone to take action.
reconciling and not speaking out is that con-
Penguin Putnam Inc., London
flicts of interest persist and still emerge later on; or that implementation does not take place. Intrinsic motivation, passion and commitment, trust, transparent attitude, openness and conducting good dialogue are characteristics of the people who contribute successfully within ecosystems. People with these qualities are able to make the difference from their own organisation within the collaboration. Mariël van der Linden wrote this article in a personal capacity. Together with companies, she investigates the possibility of new trans-sectoral collaboration within ecosystems, for example in the port of Rotterdam, Schiphol Airport, government and healthcare sector.
40 outsourcing Performance 2015
A port as ecosystem Case in the port of Rotterdam
The port of Rotterdam is a good example of an
three other companies in the supply chain
active ecosystem: factors such as complexity,
are informed by telephone or email; other
competition, interdependence, cost savings
players in the chain are not informed or are
and essential innovation play a major role here.
informed much later. This causes unexpected
Cooperation between all partners in the chain
delays and waiting times – not only for the
offers enormous potential. The sharing of infor-
ship by the quay, but also for the following
mation is one of the points of departure.
ship that is expected. In 2010, this resulted in approximately 310,000 waiting hours in
The volume of world trade will continue to
Rotterdam, equivalent to more than 35 man-
increase in the coming years. The port of
years. Similar problems occur worldwide in all
Rotterdam has the ambition to achieve a doub
ports. Rotterdam, together with partners and
ling in throughput capacity by 2030. More and
other market players, is seeking optimisation
larger ships not only contribute to economic
and cooperation with the aim of being the most
growth, but also increase the burden on the
efficient, safe and sustainable port in the world,
port and the environment. Sixteen of the world’s
so that it can effectively respond to changes in
largest ocean-going vessels produce – at full
the port schedules.
speed – as much harmful emissions as all the cars on the planet. Ocean-going vessels sail to
Sharing information
ports at high speed; but before they can enter
In order for the processes to run smoothly, it is
the port, they are anchored at sea waiting for
crucial to have access to the right information.
their turn at the terminal. Such high speeds
The parties involved have therefore launched
and the waiting times are caused by the way
the initiative to improve the sharing of static
in which international ports currently operate,
information (about terminals or depth in the
how all the parties involved work together.
port) and dynamic information (about arrival and departure times). The aim is for chain part-
Processes under the microscope
ners to be promptly informed of changes so
An analysis of the existing work processes
they are able to adjust their own schedules.
performed by the various parties in the port
Many terminals now operate with the ‘first in,
of Rotterdam shows that an average of 16 to
first served’ principle. With more reliable port
20 companies are involved in the loading and
planning, terminals can work with virtual arrival
unloading of a ship. However, no single party
times. A ship’s captain is then certain that he
has a view of the entire chain. If one company
can immediately moor in Rotterdam at the
is half an hour late, no more than two or
scheduled arrival time. The effect of this is that
PART 3 | ECOSYSTEMS 41
A picture of the future is that you will soon be able to track your new wooden table from Indonesia – from manufacture to delivery to your door – online. Based on your para meters (e.g. speed, environmental impact and price), the most efficient journey will be compiled for your table. All available appropriate modalities are deployed as though just one
means of transport is involved. What are now separate processes and separate modalities are then merged, with optimal information exchange between all links in the new chain. Consumers, producers and transporters gain real-time insight and influence on the current location of the goods, turnaround time and arrival time.
vessels travel more slowly and arrive exactly
global chain. And that has led to the adoption of
on time. This leads to a significant reduction in
global transport and logistics standards within
(fuel) costs – eighty percent of shipping costs
the port infrastructure. Transport by road, rail,
consists of fuel costs – and much lower CO2
water and air are now still separate transport
emissions. A second positive effect is that the
streams (modalities), each with their own eco-
time in port of vessels can be reduced. Both
system, chains and handling processes. In the
measures contribute to an improvement in the
future, these individual transport flows will
port’s competitiveness.
be combined and deployed in one integrated transport system, focused on the efficient and
A new perspective
reliable transport of goods from A to B. The
This initiative is all about a change in focus:
focus of transport is thus increasingly shifted to
from ‘in the port’ to ‘outside the port’ and not
traffic management directed towards optimal
so much about the use of new technology. New
goods throughput (see case above).
thinking, the sharing of information and a different perspective on business models are para-
Success factors
mount. All project partners are willing to look
It appears from the port ecosystem that a
beyond their own organisation, to put aside
common purpose and a shared ambition is a
short-term interests and to work together
good starting point to get all parties round
for the longer term benefit for all. This has
the table: in this example, the parties that
increased the awareness that the port and all
come to the port and parties working in the
the parties involved form part of a much larger,
port. Successful participation requires com-
42 outsourcing Performance 2015
mitment and support from the management
the positive impact of information sharing is,
and involvement from workers. Clarifying the
results in involvement and all kinds of new ideas.
added value for participating organisations of
The development of the associated, necessary
the project within the ecosystem takes time,
technological solutions goes in small steps. The
but is important to find solutions for conflict-
port ecosystem is growing and can no longer be
ing interests. The coordination and progress
seen separately from the entire transport chain.
run more smoothly if the supervision of the
Because transport does not stop at national
project is performed by a body that is trusted
borders, new trans-sector collaboration will
by all parties, such as an independent associa-
ultimately be required between existing and new
tion. Information represents value – it is impor-
chain partners at a global level. International
tant to consider the question what it means to
cooperation and adhering to global standards
share data and information with one another.
are prerequisites for achieving this.
It creates a lot of discussion about ownership, access rights and competitive position among
MariĂŤl van der Linden wrote this article in a personal
the partners involved. Actually showing what
capacity.
The parties involved have therefore launched the initiative to improve the sharing of static information and dynamic information PART 3 | ECOSYSTEMS 43
Managing behaviour with a collaboration board CASE AHOLD
Ahold has completely outsourced almost all her IT, with the best partner being sought for each area. The smooth functioning of such a complex multi-vendor model requires additional control and effort on the part of Ahold. To encourage cooperation between suppliers, a collaboration board was established in 2012 with all (strategic) suppliers and Ahold sitting around the table every six to eight weeks. The direct reason for the creation of this collaboration board was that Ahold, during her transformation programme for the renewal of the application landscape, noticed that communication, cooperation and coordination between the various application and infrastructure providers
Arno Gerrits
did not run optimally. “The behavioural component is the hardest to influence during cooperation between strategic partners,” according to
Transparent performance
Arno Gerrits, responsible for Vendor & Contract
The contract must reflect reality as much as
Management within Albert Heijn IT. “Vendors
possible, says Gerrits. “That requires flexibility
always indicate that they would like to work
from the vendors: Ahold in principle wants to
together and are willing to make agreements.
have the possibility of requesting a proof of
But when it comes to being really open and
concept on Friday, which should then run on
moving along with other vendors, contractual
Monday. Because building mutual trust plays a
restrictions are quickly involved. Therefore, the
major role in the board, the account executives
collaboration board only includes the account
have already been designated and cannot send a
executives of service providers who have the
substitute in their absence. The delivery side is
mandate to make agreements. Because predict-
also involved in the board, since it is especially
ability is low within Ahold, activities in the board
the project managers who will have to work
regularly lead to contract amendments.”
together.” During the board meetings they are
44 outsourcing Performance 2015
asked what they come up against: what are the
in advance for a lot or project that may soon be
barriers and obstacles preventing cooperation?
put out to tender. Suppliers can also contribute their best practices, with the aim to keep one
“In the collaboration board, a supplier scorecard
another focused and learn from each other.
is presented so that the performance of all
The board is also a platform where vendors can
parties is visible to everyone. This ensures that
express criticism about the Ahold, the client.
providers challenge one another and perform
Many obstacles they encounter have in fact
better when their KPIs go into the red. This
nothing to do with competing colleagues, but
openness and transparency approach works
concern Ahold as principal. Ahold is already
well and leads, for example, to critical but posi-
aware of most of the obstacles, but confirma-
tive input from the providers. However, the
tion from providers increases the pressure to
disadvantage of openness and transparency is
set to work here. The board therefore not only
that vendors prey on each other’s business. To
stimulates the cooperation between vendors,
prevent this, a joint code of conduct has been
but also with Ahold itself.”
drawn up for all participants in the board. The essence of this code: jointly promoting Ahold’s
Ahold strives to be the customer of choice for her
success instead of pursuing individual success.”
strategic partners. Gerrits: “If a vendor comes with an innovation, I want it to think of Ahold
Board increases involvement
as launching customer. In order to become ‘cus-
Vendors are happy to collaborate in the board,
tomer of choice’, you should also look at yourself
because they hear all kinds of things. Ahold
and become recognisable, visible, predictable
also uses the board sessions to, for example,
and more reliable. Vendors are then more willing
present the portfolio plans twice a year. Gerrits:
to understand you as customer, to really get to
“Vendors can use such information to prepare
know you and go for that extra mile.”
‘The behavioural component is the hardest to influence’ PART 3 | ECOSYSTEMS 45
Although competition is required to get the best
everyone knows where he stands. This naturally
proposition in each domain, Ahold does not want
leads to discussion. In time, when the project
to turn to the market every time. On the con-
office is up and running, there is room for a new
trary, Gerrits strives for more peace and a clear
KPI based on priorities that are then under dis-
overview and therefore does not want too many
cussion. This simple KPI is fine to practice with:
different vendors in each domain. That makes
first let’s see if we can handle this, then you
investing in relationships more manageable.
can always go for more complex goals. After all, the simpler the KPI, the greater the chance of
Start simple
success.” There are still no continuous KPIs, but
The collaboration board is also the place where
Gerrits does expect that they will be developed
careful experimentation takes place with (tem-
in the future, even though they will have to be
porary) collaborative KPIs. As an example,
sufficiently specific and tangible.
Gerrits refers to the implementation of a new project office by Ahold: “Since the optimal
Gerrits’ ultimate ambition is “to be able to put
supply of information is crucial for the operation
a business issue to the group and have the
of a project office, a temporary KPI was linked to
differentparties come together with a solution
this: to what extent does a vendor participate in
that is best for Ahold. In the future, IT demand
the timely delivery of information? The results
will, after all, increasingly be driven from the
of this KPI are shared with all vendors, so that
business.”
46 outsourcing Performance 2015
‘In the collaboration board, a supplier scorecard is presented so that the performance of all parties is visible to everyone’ PART 3 | ECOSYSTEMS 47
The Harbour Master’s night’s rest Case Port of Rotterdam
The Harbour Master of the Port of Rotterdam
finished making improvements: efforts are being
is responsible for the safe and efficient hand
made to reduce the resolutiontime to two hours.
ling of shipping and in this respect aims to be
The KPI has now been developed further and
the frontrunner: efficient handling of shipping
the emphasis has shifted from shorter resolu-
also contributes to the competitive position
tion times to fewer incidents. The Port Authority
of Rotterdam. The Harbour Master therefore
also has a responsibility for achieving the KPI: in
works closely with various inspectorates and
the case of major incidents, the Port Authority
with chain partners, such as terminals, pilots
is responsible for ensuring that the right people
and towing services.
from the relevant suppliers are sitting together round the table within 30 minutes.
If the IT systems fail, the entire Port Authority has a major problem. This was felt in 2010: during a period of three months, the total downtime was 2.5 days. In 2011, this led to a more tightly organised control of the IT chain partners and the formulation of a special collab orative KPI: the Harbour Master’s night’s rest. In short: the Harbour Master must not be disturbed by major incidents. The KPI was translated into the operations as the resolution time for critical incidents.
Faster solutions, fewer incidents The KPI was launched in conjunction with a bonus/penalty scheme. The proceeds of the bonus not only went to the service providers, but were also used to fund improvement projects. Partly due to the introduction of the collaborative KPI, the turnaround time of major incidents was reduced from eight hours to less than four hours. The Port Authority has not yet
48 outsourcing Performance 2015
The emphasis has shifted from shorter resolution times to fewer incidents
Space for change
Secondly, for the internal organisation, working
The launch of a collaborative KPI is relatively
with collaborative KPIs is more complex than
easy, but then the real work starts. First of all:
you initially think. Each department must
what needs to change in the procedures and the
ultimately define a measurable sub-KPI that
behaviour of all parties involved? After all, the
contributes to the main KPI. The most impor-
success of collaborative KPIs is dependent upon
tant advice is therefore: start with a simple
the willingness of suppliers to cooperate. This
main KPI that can easily be translated to other
was a tough challenge for the relevant IT vendors
departments.
at Port of Rotterdam. Their delivery units were not accustomed to doing business directly with
This article was written in collaboration with Youssef
the end customer, nor were they willing to make
Hmamouch and Lourens Visser (on personal capacity).
exceptions. As principal, it is therefore important to give the suppliers adequate space for this change and not to rely too much on the 足contract.
PART 3 | ECOSYSTEMS 49
PART 4 | SOFTWARE ASSET MANAGEMENT
Grip on software: from toxic to strategic asset Written by Marco Gianotten and Ton Arrachart
An increasing share of the IT budget is spent on software licences, while large organisations have simultaneously lost sight of the licences and versions they possess. Software vendors are also tightening the screws: if they suspect non-compliance, an audit follows. Penalties can amount to tens of millions of euros. High time therefore to make serious use of Software Asset Management (SAM). This not only ensures that you avoid paying penalties, but also strengthens the continuity of the business by means of the targeted replacement of outdated software. According to analysts, medium-sized and large
Nevertheless, greater transparency and a
enterprises currently spend a quarter of their
higher cost share also lead to questions:
IT budget on licences and support fees. In the
including about the added value of upgrades
wake of these are the high costs of manage-
implemented by software vendors. Upgrades
ment, upgrades and corrective maintenance.
to a new version do not always contain the
An ever decreasing budget remains for new ini-
functionality the business really needs and
tiatives, such as new development and innova-
the learning curve for users is sometimes so
tion; at many companies this has fallen to less
long that the value of a new release is nega-
than 20 percent of the IT budget.
tive. Does a secretary work faster after she has received the latest version of Word?
The fact that a larger share of total IT expenditure is devoted to licences is not only due to
The overall costs of software also increase in
higher rates for maintenance, but is mainly the
another area: companies spend more and more
result of (or thanks to) greater transparency.
on management tools, so they gain a better
When more is known about which software
understanding with the aid of systems rather
is used due to the deployment of intelligent
than IT staff.
and automated tools during self-audits, there is generally an ‘increase’ in the amount of
Are penalties the new business model?
licensed software. A migration to Office 365
On the other hand, it is clear that large listed
also provides a more reliable picture of the
software vendors are tightening the screws
number of users and the actual software usage.
on their existing customers. They claim their maximum rights. Many software vendors are
50 outsourcing Performance 2015
Organisations spend a quarter of the IT budget on licences and support fees PART 4 | SOFTWARE ASSET MANAGEMENT 51
strongly focused on creating and increasing shareholder value. With an extensive installed
SAM and Airbus
base they have an interest in sales growth,
The fact that defective Software Asset Management can yield enormous damage has become clear from the development of the Airbus A3801. In the case of the Franco-German Airbus, the Germans were responsible for developing all the wiring for the new aircraft. The Germans used an old version of Catia CAD system, developed by the French, dating from 1980, while the French used the latest upgrade during the development of the aircraft. The result: the 530 kilometres of cabling that were developed did not fit. Impact: a two-year delay and 6 billion dollars in extra costs. Needless to say that the Germans naturally received an upgrade to the latest version, but this was subsequently followed by a total reorganisation of Airbus so that the same mistake would not be made again during the development of the Airbus A350.
clockwise or counter clockwise. If the growth in new licences is disappointing (for example because customers are facing economic difficulties) more will have to be earned from the installed base. An annual maintenance fee (for maintenance and upgrades) of around 20 percent of the licence fee is now customary on top of the license fee. In theory, after five years, you have paid double for your licences due to these maintenance fees. Software is an asset in which developers invest time and money. It is therefore understandable足 that software vendors want to protect their intellectual property so that their business model remains intact on the basis of both licences and maintenance contracts. Things change when large software vendors such as SAP and Oracle regard intellectual property as a means of generating a third, additional, revenue stream on top of their normal sales, by routinely auditing their customers for compliance. These companies are
1 See Businessweek: http://buswk.co/1oxh7rf
not unsuccessful. This third revenue stream, the compliance sales derived from the imposition of penalties, is increasing fastest at software companies. Surcharges for non-compliance appear to
Software is present throughout the production
be the new profit centres.
cycle: from design to production, and testing to maintenance. Software is gonna eat the world,
Business impact of version management
so the risks of very outdated software increases.
The customer indeed deserves some of the
This results in the Black Swan effect: events
blame. Many software consumers have not
having a major impact on the business that seem
properly identified their assets. Many CIOs
rare and unpredictable, but which in retro足spect
drag along a complex IT landscape that is
were not so improbable.
sometimes three to four decades old. Few companies possess a central source that
In the small print
records all purchased software and its use.
The risks of careless Software Asset Management
Software Asset Management is not only nec-
go beyond stagnating or even failing business
essary for compliance, but also to manage the
processes. A combined penalty of 120 million
risks caused by version differences, end-of-life
euros was imposed by Oracle on six major Dutch
systems and software from a bygone era.
companies because they made use of a private
52 outsourcing Performance 2015
cloud from T-Systems. Each separate company had already paid licence fees, but Oracle did not permit resource pooling. According to the licensing model, payments had to be made for each physical processor, regardless of whether a core on that processor was used or not. The argument was that when the number of cores increases due to pooling in a cloud environment, each core must be paid for. The number of hosts, the number of CPUs on the host, the number of cores on a processor and the core factor together determine the number of licences. Software Asset Management thus also involves
Large listed software vendors claim their maximum rights
identifying the impact of the small print in the terms of a licence.
Penalties as déjà vu
and from which he wants to generate some
Companies are increasingly confronted with
handsome profits. The consequence of this
ever higher penalties for non-compliant use of
approach is that both conditions and occur-
software. A few years ago, the penalties were
ring problems quickly enter the legal realm.
lower; now they can be as high as 25 percent
At the same time, many CIOs want to escape
up to 150 percent of the annual license fee.
from the lock-in for the licensing costs and
Companies often enter into discussions after
maintenance of enterprise software. Only in
a penalty has been imposed. After negotia-
this way can more money be made available
tions, the amount is sometimes reduced and is
for those areas where there is sufficient inno-
then perceived as a discount. It is not uncom-
vation by providers, such as mobile applica-
mon for the penalty imposed to be spread
tions, SaaS, PaaS, BI, Big Data and open source.
internally over other cost items and charged
CIOs are beginning to understand that besides
to internal customers by the central IT depart-
rationalisation (fewer systems and software),
ment. The end result is that it still has to be
they can also save on maintenance by switch-
paid and if nothing changes, the penalty just
ing to external service providers such Remini
returns the following year. Compliancy audits,
Street and Spinnaker. The fact that the move
usually performed by external parties such
to third-party maintenance is a threat to major
as KPMG or PwC, may thus appear in a bad
software providers, such as SAP and Oracle,
light. Incidentally, these ‘independent third
is evident from the discounts they offer when
parties’ also have a business model: if they do
renewing maintenance contracts if their cus-
their work thoroughly, they can generate extra
tomers have a concrete proposal from another
revenue for the software vendor.
provider. But even if you, as CIO, outsource compliancy management and Software Asset
Third-party maintenance on the rise
Management, it remains your problem: from
Many CIOs regard software as a necessary evil;
the Plan Do Check Act perspective, you only
opposite them is the vendor, who has devel-
outsource the Do. The Check remains your own
oped the product on which IP rights are vested
responsibility.
PART 4 | SOFTWARE ASSET MANAGEMENT 53
Traditional licensing model obstacle to IT transformation?
Customers who become users
Companies that take the step towards virtu-
based and/or hybrid solutions, organisations
alisation and cloud computing are confronted
are forced to follow the development of their
with new challenges. The step from client-
on-premises systems at the same rate of renewal
server to client-cloud implies that companies
as their cloud applications. It is also possible
and governments say farewell to their old IT
that you do not migrate to Windows 7 for stra-
landscape with associated licences. There is
tegic reasons, but that the choice is forced upon
then no longer the option of, for example,
you because vendors make that decision.
As a consequence of the trend towards cloud-
working longer with existing software versions (thus without having to invest in the latest ver-
Moreover, the traditional licensing model turns
sions and licences). Cloud-based software is
the Internet of Things (IoT) into a time bomb.
upgraded remotely, whether you want it or
On the eve of this development, fundamental
not. Regardless of whether the pay-as-you-
choices have to be made that may have far-
go model ultimately yields a cost advantage,
reaching implications for the future costs. New
internal compatibility problems may arise in
business models based on IoT may in future
hybrid cloud models, where companies work
become a millstone around the neck of the
with both on-premises licences and SaaS solu-
business because companies go from licences
tions. An example: the marketing department
for (internal) users to licences for sensors and
has some good news: a new, flashy website has
devices.
been launched. Curious employees go straight to the web and a pop-up appears indicating
A similar situation occurred at a municipality
that an upgrade to a new version of Internet
which, because of cost considerations, wanted
Explorer is required. Everyone accepts this
to integrate SAP modules into self-service facili-
upgrade, but unfortunately the end result is
ties for citizens. When 200,000 new ‘end users’
that the web-based financial system, which
appeared, this did not go unnoticed by the soft-
does not yet function on the newest version,
ware vendor, which also looked at this change
becomes unavailable.
retrospectively. Opting for open source – as a solution to get
Surcharges for non-compliance appear to be the new profit centres 54 outsourcing Performance 2015
rid of the outdated licensing model – is not the obvious choice either. The licence costs may partially disappear, but these are replaced by other costs in terms of compatibility, consultancy, support and development. Companies that switch to open source, make things more expensive for the companies that continue to purchase from the traditional vendors. The software vendors see their customer base dwindle, the base of regular customers shrinks while they attempt to keep their turnover stable.
Best practices Pay penalty subject to clean-up campaign Following negotiations, one of the four largest municipalities in the Netherlands managed to reduce a claim by Oracle to 20 percent of the original amount: still an unforeseen heavy financial blow of millions of euros, however. Such an amount is usually divided by the municipality between more than twenty departments. The economic incentive to address the non-compliance is thus greatly reduced: everyone only suffers a little pain. The central municipal IT organisation wanted to actively address the unnecessary use of licences and started a project. It was agreed with Oracle that the penalty would be paid and that within one year the number of licences in use would be reduced by 25 percent. This goal was achieved. Hold software vendor liable for business continuity during audit Microsoft conducted automated audits on the test, acceptance and production environments within a large company by means of an IT auditor. The business-critical Exchange environments were thereby severely disrupted; these were unacceptable to the CIO. This could not be explained to the business or the senior management. From that moment, it was decided to have software vendors accept liability for damage to the business before allowing them to run their scripts; any damage is recovered on the basis of lost production hours.
System integrators should sign licence compliance statements During a call for tenders by a multinational for the development a new web-based core system, the winner was incomplete in its description of the necessary software and the licences from third parties that the customer would have to pay for after completion of the project. The licences for an internet application server were not included, despite the fact that the term web-based system was used by the customer in the tender. The additional costs were almost half a million euros. Since then, system integrators have to sign a licence compliance statement, indicating that they are making a complete offer including all necessary licences from third parties. Additional costs to third parties are thus avoided and a level playing field is created during the bidding. Thinking out of the box Dredging firm Van Oord has servers on almost all vessels with Oracle running on them. These are stand-alone versions because the cloud model does not work well due to the lack of affordable connectivity at sea. There are few users on each vessel, but Van Oord wanted an enterprise licence. With standalone servers, Oracle charges on the basis of processor power. This might have been a reason for making these as light as possible, but Van Oord足obviously did not want too much downtime. Together with Oracle a creative solution was found: Van Oord itself became an Oracle reseller and was thus able to exchange the licensing model on the vessels for a royalty model.
PART 4 | SOFTWARE ASSET MANAGEMENT 55
you cannot rationalise and you continue to act defensively when another claim is received from a software vendor. However, companies fear that their software licensing costs will rise if they identify everything properly and realise transparency in use. As CIO, you cannot easily score with Software Asset Management therefore. To get a grip on costs and proactively curb the use of old, redundant and duplicated software, CIOs will have to take matters into their own hands. To avoid unpleasant surprises, Software Asset Management must become an integral part
If you know what you have available, you are able to manage it
of sourcing decisions. Software is no longer just a set of packages and written programs, but becomes the foundation and rationale of a modern enterprise.
From consciously incompetent to consciously proficient Compliancy is not a goal in itself, but a result of efforts in two areas: you have your business in order and your relationship with your supplier is also good. Therefore, both asset management and vendor management are important. Good asset management is a matter of knowing what you have available, how and by whom it is used and when licences expire. That process starts
New-style Software Asset Management
with procurement. If the business buys a licence,
An initial conclusion is that software becomes
as CIO you must choose: do you condone
a toxic asset if you do not manage it properly.Â
its misuse? Many companies are consciously
The disadvantage of old-style software Asset
incompetent: they know that there are short-
Management is that it is only defensive in
comings in the registration. If you know what
nature; you identify which software you use
you have available, you are able to manage it.
in order to avoid claims, penalties and sur-
Pre-assessments can be of assistance here. It
charges. Software Asset Management therefore
would also be useful if software vendors made
goes much further than the purchase of tools:
tools available to their customers. If they don’t
a fool with a tool is still a fool. For decision-
want this, is this motivated by an extra business
making and control you must also know how
model? Meticulous Software Asset Management
often software is used, how old it is and what
is also concerned with change management.
its role and importance is to the business and
Only the technical impact of changes is then
within business chains. Without this knowledge,
often examined, and not non-technical issues,
56 outsourcing Performance 2015
such as the financial and compliance impact.
or older packages are not visible and income
Employees will be surprised if you ask the busi-
cannot be attributed to them either. The indi-
ness for discharge after completion of a project:
vidual IT user will not make that calculation for
a statement of work which shows that every-
his own IT needs, so this must be managed by
thing is nicely in order at the end of a project, so
the IT department itself.
that no claims follow from vendors, for example due to the discovery of traces of software.
When you are transparent as a customer, you can probably count on fairer treatment from
Update vendor management
your suppliers. If you are not, the relationship
If you enter into consultations rather than wait
is not balanced and you run the risk that a sup-
until things go wrong, flexible and temporary
plier will make optimum use of the terms of the
solutions are often possible. If you encounter足a
licence. Entering into discussions about the
problem, you can proactively contact the vendor,
terms of licensing is not advisable, but you can
also to make known any plans you may have,
discuss your needs and the calculation model,
for example. For the vendor that behaviour has
thus the application of licence terms. Do not
an advantage: it gains commercial opportuni-
be afraid to discuss matters openly (fairly open
ties, and you give the signal that you want to be
anyway) with your software provider.
compliant. In that way you make it less attractive for a vendor to perform a costly compliance
Ton Arrachart is CIO of Van Oord and board member of
audit. Invest that money in the relationship and
the CIO Platform with responsibility for the suppliers
in a better price/performance ratio! Broaden
portfolio.
your outlook and not only look at costs, but also at the impact and the role of software within a digitising company. Software Defined anything, or SDx, is the trend that things are increasingly being organised足 with software: virtual data centres, networks and the deployment of applications with DevOps. By properly identifying the significance of this trend, a clearer picture emerges of the overall impact of, for example, employing 500 new employees. This leads not only to 500 new mailboxes, for example, but also to 500 new cloud licences.
Rationalise and invest in the relationship Other solutions lie in rationalising the software足 landscape. At Van Oord, for example, a number of the available AutoCad versions were scrapped. Greater emphasis is placed on the added value of software: to what extent does it result in sales? At many companies, the costs of smaller
PART 4 | SOFTWARE ASSET MANAGEMENT 57
Outsourcing Performance Outsourcing Performance (OP) is the benchmark about the quality of relationships between client organisations (outsourcers) and their external service providers. The opinion of customer organisations is important for service providers in order to improve themselves and their relationship with their customers. Customers, too, can learn about best practices and cases from OP. Outsourcing Performance consists of a quantitative and qualitative component and their combination is the key to the study’s success. The numbers and figures don’t tell the whole story: the study also supplements the results with an underlying account, which is unique for each client situation and service provider. For that reason, Giarte is generous in its feedback while being prudent in its approach. It is all too easy to misinterpret percentages if the context is
unclear. The study aims to stimulate discussions and is not a performance or selection tool. The quantitative component consists of an online study where a large amount of data is collected on sourcing strategy and client-provider relation ships. Giarte then supplements the figures with background data by means of telephone and face-to-face interviews to ensure that the results are interpreted correctly. The online data was collected in the second quarter of 2014 and the participants were persons within the organisations who have the best insight into the service provider relationships: CIOs, CTOs, sourcing VPs, vendor managers and contract managers. This research paper is a summary of the booklet entitled Outsourcing Performance 2015. A free copy of this yearbook (in Dutch) can be ordered via www.giarte.nl or www.outsourcingperformance.nl.
research response 2008-2014 2008
2009
2010
2011
2012
2013
2014
Number of respondents
275
306
354
403
400
526
566
Number of organisations
242
277
292
306
293
347
439
Number of unique relations
674
646
584
705
682
805
834
58 outsourcing Performance 2015
Research 60 Structure of the study 62 Satisfaction with delivered services 63 Recommendation of the service provider 64 Three client groups 66 Being a good customer 68 Application Management 70 Infrastructure Management 72 End User Management
59
research
Structure of the study a minimum of seven evaluations from different clients. Only three service providers (Atos, Capgemini and HP) have sufficient evaluations in all three domains, the other service providers are present in only one or two domains (see figure 1). A service provider needs a minimum of fifteen evaluations from different client organisations in order to receive an Outsourcing Recommendation Score (ORS). Only the results for service providers with an Outsourcing Recommendation Score are made public. Nineteen providers received a public score this year.
Each year Giarte researches the relationship between clients and service providers. The research takes place in a closed community of key decision makers. It is only possible to participate in the research with a personal invitation after Giarte has checked the relationship. This summary presents the main results of the study. Outsourcing Performance divides the sourcing market into three domains: Application Management (AM), Infrastructure Management (IM) and End User Management (EUM). To be represented in a domain, service providers require
figure 1 – representation of the service providers in the three domains
AM
Nearshore
Offshore
Levi9
Infosys
ISDC
TCS
Sogeti
Wipro
Accenture
CGI Ordina IBM
T-Systems BT IM ASP4all
Imtech ICT Jitscale Schuberg Philis
Capgemini Atos
HP
Simac Valid
Fujitsu Pink Elephant
Cegeka
Note: the position of a provider within the fields is random
60 outsourcing Performance 2015
KPN
Centric
Detron OGD
EUM
table 1 – services per domain
Application Management (AM)
Infrastructure Management (IM)
End User Management (EUM)
• Application Development
• Technical Application Maintenance
• Workspace Management
• Systems Integration
• Mainframe Management
• Device Management
• Functional Application Maintenance
• Hosting & Storage
• Helpdesk
• Cloud Applications
• Security Management
• Packaging
• Test Management
• Internal networks
• Office Applications &
• Application Helpdesk
• External networks
Compared to last year, a few providers are excluded from the study: Bull, Cognizant, HCL and Verizon did not receive enough evaluations. BT did not receive fifteen evaluations and as such did not receive a public ORS. Pink Elephant did receive fifteen evaluations and was awarded an ORS for the first time. CGI and Sogeti received sufficient evaluations to be included in the Infrastructure domain, as well as in the Application domain. Cegeka and Valid received enough evaluations to receive satisfaction scores in the End User Management domain; they were already represented in the Infrastructure domain.
Collaboration
Questions per service provider Per service provider a number of questions is asked for each of the three domains if the service provider delivers in that domain: • The recommendation of the service provider • The satisfaction with delivered services • The chance that the current contract remains at the service provider • The chance that the service provider wins additional business in that domain This research part focuses on the recommendation and the satisfaction.
Each domain covers a range of services; table 1 provides an overview.
research 61
research
Satisfaction with delivered services For the second year, the satisfaction has been measured along two lines: standard delivery and non-standard delivery: 1. Standard delivery, comprising of running the operations and executing standard changes 2. Non-standard delivery, comprising of executing the non-standard changes and projects Service providers with seven or more evaluations in a domain received a satisfaction score, based on a weighted average. The highest, average and lowest scores in each of the three domains for standard and non-standard delivery are shown in figure 2. In Application Management (AM), 13 service providers received satisfaction scores, 22 providers received scores in Infrastructure Management (IM) and 12 providers in the End User Management (EUM) domain. The average scores do not differ significantly from last year. It is surprising that the average score for standard delivery in AM is now lower than that score in the IM domain. The digitisation of the enterprise creates a lot of pressure in the application portfolio of many organisations. Retiring legacy applications and building new apps for the digital enterprise is complex work. Part of the pressure to solve this issue is now felt by service providers who assist with this task. In the IM and EUM domains the average scores are helped by new service providers which have a satisfied clientbase of medium-sized organisations. Satisfaction scores with non-standard delivery vary considerably per service provider. In Infrastructure Management, the difference between the best and worst scores is more than 40 points. In the AM domain, the nearshore pro-
62 outsourcing Performance 2015
viders – with operations in Eastern Europe – score well on this point. In the EUM domain, the satisfaction with non-standard delivery is the lowest and scores vary per service provider. Many organisations are investing in new concepts for workspace management, such as the use of tablets. Service providers are not always very flexible and fast in changing their portfolio to accommodate the new devices and services. Also, projects in the EUM domain often call for competencies that are not always immediately available. figure 2 – satisfaction scores across all service providers per domain Standard delivery 100 89
80
83
60
67
69
54
53
75 64 54
AM
IM
EUM
40 20 0
Non-standard delivery 100 80
83
83
60
60
57
40
43
40
68
20
55 31
0 AM
IM
EUM
Highest score in the group of service providers Average score in the group of service providers Lowest score in the group of service providers
Recommendation of the service provider The satisfaction scores are related to the services delivered by service providers today. We also want to know if clients perceive their providers as partners for the future. Therefore, we ask them if they would recommend their provider to other organisations. A positive recommendation positions the provider as a trusted relation and exudes confidence in their strategy. Organisations can give their recommendation on the basis of a six-point scale. When a provider delivers services in more than one domain, a separate recommendation is given for each domain. Hence, organisations were able to give up to three recommendations (for AM, IM and EUM). Figure 3 shows the distribution of all recommendations for each domain.
Compared to last year’s results some minor overall differences can be recognised. In Infrastructure Management, clients are more positive in the recommendation of their service provider. In Application Management, the percentage of clientswho give a negative recommendation – the Detractors – rises, but also the percentage of clients who are very positive goes up. In End User Management, recommendations have become milder and less extreme. Especially in the Infrastructure domain, progress has been made. Five different service providers (Fujitsu, HP Enterprise Services, OGD, Pink Elephant, Schuberg Philis) only received positive evaluations for their services in this domain. This has never happened before.
figure 3 – distribution of outsourcing recommendation scores per domain 60% 50% 40%
34
42
40
34
33
37
30% 20% 10% 0%
12 1
12
10
3
Application Management
1
3
16 9
Infrastructure Management
2
6
5 End User Management
Distribution in % Certainly not
Probably not
Almost certainly
Almost certainly not
Probably yes
Certainly
research 63
research
Three client groups Having a large fan-base is crucial for service providers from a commercial perspective. In the past few years we have learnt that dissatisfied clients are willing to switch providers. And when a client – especially a large one – leaves the service provider a substitute client is not readily available. Clients prefer not to switch service providers: a substantial transition budget is often involved, you risk to create an environment with negative energy when the leaving service provider does not cooperate and it takes time to rebuild relations and the required business knowledge.
We distinguish three different groups when we analyse outsourcing recommendation: the Detractors, the Passives and the Promoters (see table 2). The size of each group for each of the three domains can be seen in figure 4. In all domains the percentage of Promoters – the fans of service providers in that area – increases compared to last year. In the AM domain, the percentage of Detractors also increases. This group only becomes smaller in the IM domain. The situation in the EUM domain improves, but it is still the domain where client organisations are the most critical in recommending their provider. table 2 – three client groups
Question ‘Would you recommend the service provider as an outsourcing partner if someone asked you to?’ Certainly not
Almost certainly not
Detractors
Probably not
Probably yes
Almost certainly
Passives
Certainly
Promoters
figure 4 – size of the client groups per domain 58 60%
51
50%
47
46
51
50
46
42
50
50 36
40% 30% 20% 10% 0%
7
4
2 2013
2014
Application Management Detractors
Passives
64 outsourcing Performance 2015
2013
6
6
4 2014
Infrastructure Management Promoters
2013
2014
End User Management
44
figure 5 – client groups per service provider Accenture
5
60
35
ASP4all
76
24
Atos Capgemini
31
60
9
Centric
50
50
CGI
41
59
Detron
13
38
49
Fujitsu
43
57
HP Enterprise Services
41
59
IBM
27
59
14
Imtech ICT
61
39
KPN
6
40
54
OGD
65
35
Ordina
43
57
Pink Elephant
56
44
Schuberg Philis
88
12
Simac
57
43
Sogeti
8
T-Systems
44
48
Passives
31
54
15 0%
Detractors
26
61
13
20%
40%
60%
80%
100%
Promoters
The growing Promoter groups are therefore an encouraging sign. Of all Promoters in the AM domain, 90% have a firm intention to stay with the current provider, in the group Passives this percentage is significantly lower: 41%. In the EUM domain the differences are even greater. Within the Promoter group, 95% indicate a firm intention to stay, only 33% of the Passives have also this intention and none of the Detractors think that it is very likely that the current contract will be renewed.
Figure 5 shows the distribution of client groups per service provider. This distribution is based on all recommendations received for all three domains (if more than seven recommendations were given in that domain). For example, the distribution for Atos is based on three domains, while the distribution for Accenture is only based on their recommendations in the Application domain.
research 65
research
BEING A GOOD CUSTOMER Our message to client organisations is that their own approach towards sourcing greatly influences the chances of achieving a successful outsourcing outcome or not. Good clients do not focus on the exceptions that a service provider has to make for their organisation. They focus on the strengths of the service providers and look what adaptations are necessary within their own organisation. Mature governance skills are needed to align the service portfolio of the service provider with the desired business outcome within the client’s organisation. Demand management becomes increasingly important for IT organisations, because the business very quickly becomes impatient. It has become very easy for the business to create or buy IT solutions themselves without any help from the IT department. If the IT organisation does not want the business to make shortcuts, the
demand management process must ensure that the sourcing partners are able to react swiftly to changing needs. We asked organisations to rate their own governance skills at two levels (see table 3): are you able to manage the service provider (supply) and are you able to manage the IT demand from the business (demand)? Figure 6 shows the results. Traditionally, the focus is on managing service providers. But in order to be a good client, managing demand from within your own organisation becomes even more important. The results clearly show that there is still improvement potential with regard to demand management. Only 34% of all organisations rate their demand management as strong.
table 3
Question ‘How do you assess your own skills to’: – Manage the IT-demand from the business (demand)? – Manage the service providers (supply)? Weak
66 outsourcing Performance 2015
Very strong
figure 6 – governance skills of outsourcing organisations 45% 40
40% 35%
Supply 37
Demand
36 31
30% 25% 19
20% 14
15% 9
10% 5% 0%
5 1
1
Weak
4
3
Very strong
research 67
research
Application Management There is no longer a tradition that the service providers in the AM domain see relatively high recommendation scores. Organisations need to change a lot in their application portfolio and the service providers feel this heat. Only two service providers see a significant increase in their recommendation score: Ordina and Sogeti. All other service providers see their score decline, HP sees a very small increase. HP is a relatively new player in this domain and its portfolio of AM services cannot easily be compared to the other players in this domain. Its score is also based on less than 10 evaluations.
the business pressure is high. However, they score less on standard delivery once the application transitions from the project to the maintenance phase of the lifecycle. The distribution of the application satisfaction scores is shown in figure 7. Figure 8 shows the Ârecommendation scores for the AM domain for service providers with sufficient evaluations.
Recommendation score The Recommendation Score in a domain is calculated as the percentage of clients giving a positive recommendation to a specific service provider. Because the Recommendation Scores are not weighted, they are prone to variation from year to year.
Nearshore and offshore service providers do not have sufficient evaluations to obtain a public recommendation score. But clients are generally satisfied with their services. Especially the nearshore providers perform well on non-standard delivery. They are able to quickly deliver on projects when
figure 7 – distribution of satisfaction scores in application management (am) Non-standard delivery AM domain
Standard delivery AM domain 50%
50% 40
40% 30% 20%
30%
1
4
Very dissatisfied
68 outsourcing Performance 2015
25
27
30
20%
16
10% 0%
40%
32
7
10% 0%
Very satisfied
9 3
Very dissatisfied
6
Very satisfied
figure 8 – outsourcing recommendation in the application management domain 85
Accenture
95 75
Atos
86 76
Capgemini
79 73
CGI
76 89
HP Enterprise Services*
88 79
IBM
87 84
Ordina
74 83
Sogeti
76 0%
10%
20%
* Score is based on less than 10 observations
30%
40%
50%
60%
70%
80%
2014
90%
100% 2013
research 69
research
Infrastructure Management Service providers in the Infrastructure Management domain worked a lot on re-engineering their data centres and support processes to make them work for the digital age. These efforts are now paying off when they look at the satisfaction (see figure 9). Satisfaction increases because clients have fewer outages and the services are predictable with regard to business continuity. For the first time, clients in Infrastructure Management are more satisfied with standard delivery than clients in Application Management. Satisfaction can still be improved with regard to non-standard delivery. Especially the larger service providers have low scores. Improvements can also be seen in the recommendation scores. Five service providers have only positive recommendations in this domain. And this is not just an incident, because all of them have 10 or more evaluations. Furthermore, these perfect scores are not only concentrated within niche players or medium-sized providers.
This means that both large multinationals and medium-sized players have learnt how to work their service providers. There are only two providers that see a notable decrease in their Recommendation Score: Detron and Ordina. The perfect score of 100% in 2013 for Ordina was based on only seven evaluations, their current score of 73% is based on fifteen evaluations. Detron sees a switch in its recommendation score: last year its score in the EUM domain was very low. This year, clients are negative about the services in the IM domain and more positive about the EUM domain. Figure 10 shows the percentage of clients who are positive about their recommendation of the service provider in the Infrastructure Management domain.
figure 9 – distribution of satisfaction scores in infrastructure management (im) Non-standard delivery IM domain
Standard delivery IM domain 50%
50% 41
40%
40%
32
30%
30%
20%
20% 13
10% 0%
29
1
5
7
Very dissatisfied
70 outsourcing Performance 2015
10% 0%
Very satisfied
16
28
17
4
6
Very dissatisfied
Very satisfied
figure 10 – outsourcing recommendation in the infrastrcuture management domain 94 95
ASP4all Atos
58
64 75
Capgemini Centric* CGI*
75
80 78 86
- N/A 64
Detron
80
Fujitsu
100
80
HP Enterprise Services
100
64 63
IBM*
69 94 95
Imtech ICT 75 74
KPN OGD
93 73
Ordina Pink Elephant
100 100
- N/A
100 100
Schuberg Philis Simac Sogeti*
100
74 57
- N/A
T-Systems
85
71 0%
84
10%
20%
* Score is based on less than 10 observations
30%
40%
50%
60%
70%
80% 2014
90%
100% 2013
research 71
research
End User Management In 2013 we noticed that clients in this domain were no longer structurally dissatisfied with the provided services. This is still the case, but the positive trend ceased and a larger percentage of the clients are dissatisfied compared to last year’s results. The distribution of the satisfaction scores for both standard and non-standard delivery is more negative (see figure 11). Companies started to invest in a new generation of workspaces. They add tablet and smartphone users, upgrade their online collaboration possi bilities and experiment with self-service for IT support. Service providers need to supply clients with a broad range of expertise to support all these initiatives and the required competencies are often scarce. Therefore, the satisfaction with non-standard delivery is especially low.
In general, clients feel that service providers are going in the right direction with their vision on workspace management. Notably Centric and HP Enterprise Services see their score improve as a result. But clients feel that the pace of translating these visions into reality can increase. Several other service providers therefore see a decline in their recommendation. OGD manages to retain the perfect score of one hundred percent for the second year in a row (see figure 12).
figure 11 – distribution of satisfaction scores in end user management (eum) Standard delivery EUM domain
Non-standard delivery EUM domain
50%
50% 40
40% 30% 20%
1
5
Very dissatisfied
72 outsourcing Performance 2015
31
30% 20%
16
10% 0%
40%
33
6
26
10% 0%
Very satisfied
17
21
2
3
Very dissatisfied
Very satisfied
0
50
100
figure 12 – outsourcing recommendation in the end user management domain
35
Atos
52 64
Capgemini
80 92
Centric
75 80
Detron
63 91
Fujitsu
88 63
HP Enterprise Services*
55 79
KPN
88 100
OGD
Pink Elephant
100 89 - N/A 82
Simac
92 0%
10%
20%
* Score is based on less than 10 observations
30%
40%
50%
60%
70%
80% 2014
90%
100% 2013
research 73
About Giarte Giarte records experiential knowledge and experiences about IT services in business environments. To this end, Giarte makes use of two unique instruments: ITsat® and Outsourcing Performance® (OP). ITsat is a monitoring and analysis tool designed to measure and improve the quality of IT services; Outsourcing Performance includes an annual benchmark study and serves as a platform for highlighting market developments, trends and best practices.
Research results from recent years can also be interactively examined with the aid of the Performance Browser. The site also has digital versions of the current and previous yearbooks, in the form of an interactive PDF. New columns, analyses and background articles are regularly published on the website. Professionals who want to keep abreast of the latest developments can subscribe to the Outsourcing Performance newsletter. www.outsourcingperformance.nl
Giarte gives presentations, facilitates workshops and organises in-house brainstorming sessions for all levels within IT organisations. About Outsourcing Performance Outsourcing Performance is the benchmark about the quality of relationships between client organisations (outsourcers) and their external service providers. The annual Outsourcing Performance (OP) benchmark study has existed since 2002. OP measures the perception on the customer side of the market: among senior management, such as CIOs and vendor managers. The opinion of customer organisations is important for service providers in order to improve themselves and their relationship with their customers. Customers, too, can learn about best practices and cases from OP. As part of its research and analysis, Giarte supports both customers and suppliers who want to elevate the cooperation to a higher level. About the Outsourcing Performance site (only in Dutch) By means of the outsourcingperformance.nl website, you have access to online profiles of the leading service providers on the Dutch market. These profiles contain information that is not included in this Outsourcing Performance Yearbook.
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About Giarte’s ITsat® Giarte is nationally and internationally active with the framing, measurement and improvement of User eXperience (UX) for services that corporate IT delivers to the business and the (end) users. We assist with the development and drafting of XLAs (eXperience Level Agreements) in order to focus attention on the end user. We look for the right mix of hard and soft control variables and help to stress test KPIs for effectiveness. With our ITsat® service we monitor and analyse the perception of IT among more than 300,000 end users, including customer satisfaction with the quality of processes (ITIL) that affect (end) users. We develop and deliver visual analysis tools for our ITsat customers, enabling the causes of dissatisfaction (root cause analysis) to be clarified and the impact of improvement actions to be monitored. www.giarte.com
Colophon Outsourcing Performance 2015 Outlook * Strategy * Research Authors Marco Gianotten, Rikke van der Heide, Jurgen Huige, Sven van de Riet, Ton Arrachart, Erik Bouwer, Mariël van der Linden Editorial Office Erik Bouwer, Linda van ’t Klooster Project Management Linda van ’t Klooster Concept, design and illustrations Overhaus, Amsterdam Printing Company Drukkerij Calff+Ando Giarte Jacob Bontiusplaats 9 1018 LL Amsterdam P.O. Box 890 1000 AW Amsterdam Telephone: 020 622 3444 Fax: 020 638 4039 info@giarte.com www.giarte.com www.outsourcingperformance.nl © Copyright Giarte Media Group BV, Amsterdam, October 2014 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the copyright holder.
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TRANSFORM Outsourcing performance 2015 – TRANSFORM
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