IT Value Maximization

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From control and command to trusted partnership
Baltic IT Cruise November 22, 2004 Ulf
BaggströmManaging Director, CSC Sverige AB
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From control and command to trusted partnership

• How can you combine the typical outsourcing
  control and command environment with a trusted
  partnership that creates innovation and added
  value?
• Insanity is doing the same thing over and over
  again and expecting a different result. Albert
  Einstein

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Agenda

• Snapshot of CSC Computer Sciences Corporation
• State of the Swedish IT-Industry
• Different outsourcing models
• Trusted Partnership Why and how

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Snapshot CSC Computer Sciences Corporation
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Our mission is to help clients achieve strategic
goals and profit from the use of information
technology.

• Specializing in
• IT and business process outsourcing
• Systems integration and development
• Management and technology consulting and
  professional services

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Global strenghts local delivery
Third largestIT-services company In the world
Revenue
Spacetechnology
Employees
Mission Critical
Founded 1959 Delivered IT-solutions in over 45
years
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CSC in the Nordics
4000 employees
Revenues approx US 5 billion (prognosis FY05)
Main offices in Copenhagen, Stockholm, Oslo and
Helsinki
Public
Private
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State of the Swedish IT-market
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Swedish IT-market - An industry in pain

• Lost 16 billion SEK the last four years
  (Professional services companies) 359 million SEK
  i förlust 2003
• Adcore, Framfab, Icon Medialab
• Share price fell from 180 SEK to 0,5 SEK
  (Framfab)
• More than 12.000 people has left the IT-industry
• Ericsson reduced number of employees by 60,000
• Unemployement among IT-people over 10
• www.kickad.nu (www.fuckedupcompany.com)

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But there are signs of a turnaround

• Prognosis shows that companies will turn it
  profitability this year (Total losses of 359
  million SEK in 2003)
• Predicted average growth 4,8 for the coming
  years (IDC)
• More job advertisements
• Surveys show that IT-investments are increasing
  (Företagsbarometern)

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What is growing?

• The investments in IT is still targeting areas
  where organisations can save costs
• High demand for outsourcing services
• Sweden is still unmatured (BPO, Offshore not
  common)
• About 40 of all IT-services in the Swedish
  market are outsourcing services.
• The outsourcing services is that fastest growing
  segment in the market and is expected to
  represent more than 50 of all IT-services in the
  next couple of years.

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Different outsourcing models
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Why do organisations outsource their
IT-functions?

• Financial benefits
• Increased cost control
• Increased efficiency
• Many synergies
• Focus on core business
• Increased flexibility
• Increased quality
• Sometimes organisations outsource their IT to
  solve internal problems

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Potential for outsourcing
Market Availability
Complexity
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Trusted partnership Why and How
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Partnership arrangements...
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Aggressive Management of the Legacy Portfolio
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Trust and Control

• The key to optimal outsourcing relationships
• Optimal relationships rely on right balance
  between trust and control

Gartners research found that outsourcing deals
usually are constructed to rely on control
which organizations understand, rather than on
trust
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Key components of Trust and Control (1/2)
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Key components of Trust and Control (2/2)
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Trust and Control Conclusion
By building a relationship based on trust will
create added value in an oursouring
arrangement. These factors are often "negotiated
out" of outsourcing deals because traditional
approaches are based on control rather than
trust.
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Thanks for your time! Questions?
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Experience. Results.