Positioning Strategy of Swisscom’s ICT Outsourcing Offer White Paper Bachelor Thesis 2011 By Hilal Sahbaz 19 August 2011 Business Administration (International Management) Supervisor: Prof. Dr. Axel Keller I Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Stakeholder Client Swisscom (Switzerland) Ltd Marc Lindt Regula Boller Head of Outsourcing Services Marketing & Sales, Outsourcing Services Müllerstrasse 16 Müllerstrasse 16 8004 Zürich, Switzerland 8004 Zürich, Switzerland Phone +41 58 223 46 41 Phone +41 58 221 57 12 Email [email protected] Email [email protected] Supervisor Prof. Dr. Axel Keller University of Applied Sciences Northwestern Switzerland Riggenbachstrasse 16 4600 Olten, Switzerland Phone +41 62 286 01 48 Email [email protected] Author Hilal Sahbaz Phone +41 76 302 28 71 Email [email protected] Hilal Sahbaz 19 August 2011 2 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd II Executive Summary The paper at hand on positioning strategy of Swisscom’s ICT Outsourcing offer has been written for the Swisscom Switzerland Ltd in Zurich and represents a diploma paper of the bachelor degree program “International Management of the University of Applied Sciences Northwestern Switzerland. Swisscom Switzerland Ltd required a study on ICT outsourcing that positions Swisscom Switzerland Ltd as experienced outsourcing partner. Key arguments, challenges and important aspects had to be collected and put in summarized form into a paper that can serve as white paper for ICT solution and services of Swisscom Switzerland Ltd. The paper consists of three parts named introduction into the issue outsourcing, interview findings and solution approach. The first section shall give the reader a general overview of outsourcing and related development over the past years. Furthermore, insight into the different attributes of outsourcing model and outsourcing standards ITIL are provided. The second part presents the conducted interviews with ICT specialist within Swisscom Switzerland Ltd and existing ICT outsourcing customers of Swisscom Switzerland Ltd. The interview findings show arguments for ICT outsourcing, related risks and challenges, explains the important elements of outsourcing process and presents the competitive environment of Swisscom Switzerland Ltd. Lower total cost of ownership and ability to concentrate more on core competencies are among others the major motives for organizations to assign their ICT services to external service provider. Furthermore, it has been identified that loss of know-how and flexibility are the main Hilal Sahbaz 19 August 2011 3 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd challenge for service user. Whereas for service provider lack of accurate analysis by organization of its own ICT services and processes is the main challenge. Swisscom Switzerland Ltd conducts for each outsourcing project a special risk management program to minimize or even prevent potential risks. Moreover, the outsourcing process includes 4 important phases: Evaluation, Negotiation & Agreement, Transition, and Transformation. Duration and complexity of processes varies according to outsourcing project. Based on the desk research and conducted interviews, a white paper has been created including introduction, benefits, risk and challenges, the paths from insourcing to outsourcing, common outsourcing failures and choosing the right service provider. Hilal Sahbaz 19 August 2011 4 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd III Declaration of Authenticity I the undersigned declare that all material presented in this paper are my own work or fully specifically acknowledged wherever adapted from other sources. I understand that if at any time it is shown that I have significantly misrepresented material presented here, any degree or credits awarded to me on the basis of that material may be revoked. I declare that all statements and information contained herein are true, correct and accurate to the best of my knowledge and belief. 19 August 2011 Hilal Sahbaz Hilal Sahbaz 19 August 2011 5 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Table of Content I STAKEHOLDERS 2 II EXECUTIVE SUMMARY 3 III DECLARATION OF AUTHENCITY 4 IV LIST OF TABLES 5 V LIST OF FIGURES VI LIST OF ABBRATIONS 1. INTRODUCTION 11 1.1. Purpose of the Study 11 1.2. Goals 12 2. METHODOLOGY 12 2.1. Desk Research 12 2.2. Interviews 13 2.2.1. Target Group 13 3. INTRODUCTION TO THE ISSUE ICT 15 3.1. Definition of Outsourcing 15 3.2. Historical Development of IT Outsourcing 16 3.3. Integration of ICT 16 3.4. ICT Outsourcing 17 3.5. Outsourcing Model 18 Hilal Sahbaz 19 August 2011 6 of 76 3.5.1. Financial Dependence Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd 19 3.5.2. Level of External Performance Procurement 19 3.5.3. Strategic Aspects 20 3.5.4. Time Aspects 22 3.5.5. Number of Service Providers 22 3.5.6. Level of Operation Orientation 22 3.5.7. Location 24 3.6. ITIL – ICT Service Management 24 3.6.1. Service Support Process 26 3.6.2. Service Delivery Processes 35 4. INTERVIEW RESULTS 38 4.1. ICT Outsourcing Specialists 38 4.1.1. Target Group 38 4.1.2. ICT Outsourcing of Swisscom 39 4.1.3. Success of Outsourcing 40 4.1.4. ICT Outsourcing Process 42 4.1.5. Competition 43 4.2. Customers of Swisscom 43 4.2.1. Case AXA Winterthur 43 4.2.2. Case Ringier AG 45 5. SOLUTION APPROACH 47 5.1. Introduction 48 5.2. The Benefits of ICT Outsourcing 49 5.3. The Challenges of ICT Outsourcing Challenges 53 Hilal Sahbaz 19 August 2011 7 of 76 5.4. The Path from Insourcing to Outsourcing Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd 55 5.4.1. Evaluation 56 5.4.2. Negotiation & Agreement 59 5.4.3. Transition 60 5.4.4. Transformation 61 5.5. Common Outsourcing Failures 61 5.6. Choosing the right service provider 65 6. CONCLUSION & RECOMMENDATION 66 7. BIBLIOGRAPHY 67 8. APPENDİCES 73 8.1. Interview Guideline – ICT Outsourcing Specialists 73 8.2. Interview Guideline – Customers of Swisscom 74 Hilal Sahbaz 19 August 2011 8 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd IV List of Tables Table 1: Interview Partners – Outsourcing Specialists Table 2: Interview Partners – Customers of Swisscom V List of Figures Figure 1: Sourcing Model Figure 2: ITIL Process Model Figure 3: Service Support Process Model Figure 4: Change Management Process Model Figure 5: Release Management Process Model Figure 6: Service Delivery Process Model Figure 7: Outsourcing Process Model VI List of Abbreviations AM Application Management ASP Application Service Management BPO Business Process Outsourcing CAB Change Advisory Board CI Configuration Item CMDB Configuration Management Data Base Hilal Sahbaz 19 August 2011 9 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd CRM Customer Relationship Management DB Data Base DSL Definitive Software Library EDS Electronic Data System ERP Enterprise Resource Planning FMO Future Mode of Operation GPRS General Packet Radio Service ICT Information and Communication Technology IPT Internet Protocol Telephony IT Information Technology ITIL IT Infrastructure Library ITO Information Technology Outsourcing KE Known Error LAN Local Area Network LOl Letter of Intent NDA Non-disclosure Agreement NEBIS Network of Libraries and Information Centers in Switzerland PMO Present Mode of Operation R&D Research and Development RfC Request for Change RfP Request for Proposal SLA Service Level Agreement SLM Service Level Management TCO Total cost of ownership TTS Trouble Ticket System WAN Wide Area Network Hilal Sahbaz 19 August 2011 10 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd 1. Introduction This Bachelor thesis evolved from a requirement identified by Swisscom Switzerland Ltd, which is the leading telecoms provider in Switzerland. Swisscom Switzerland Ltd provides complete outsourcing of in-house network, voice and IT security infrastructure to corporate business. These businesses heavily rely on ICT (information and communication technology). ICT services require efficient management, coordination and monitoring. In the event of non-fulfilment of these performances, organizations face high employment expenses, unprofitable procurement, poor process and unreliable operation. As an experienced outsourcing partner, Swisscom Switzerland Ltd is looking for a positioning strategy for its ICT outsourcing offer. 1.1. Purpose of the Study An ICT outsourcing offer is usually associated with assignment of existing ICT infrastructure, staff and business processes. In addition, the customers of Swisscom expect with outsourcing to attain a significant financial advantage as well as professional support for the innovation process. Consequently, Swisscom Switzerland Ltd is looking for a positioning strategy. In view on this, the aim of this Bachelor thesis is to produce a white paper that can contribute to position Swisscom Switzerland Ltd’s outsourcing offer and as an experienced outsourcing partner. Hilal Sahbaz 19 August 2011 11 of 76 1.2. Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Goals In total 5 goals were defined, which had to be adjusted during the process of working on this paper. The final wording of the goals is as follows: 1. Provide a conversation introduction for potential customers. 2. Determine advantages of outsourcing for customer. 3. Demonstrate the process of outsourcing. 4. Appoint success factor, which is to be fulfilled by customer. 5. Emphasize criteria to adopt a service provider. 2. Methodology In order to understand the studied topic environment thoroughly, qualitative techniques, such as desk research and qualitative interviews, were seen as the best method for data collection and analysis. The findings were first categorized into interviews with outsourcing specialists and interviews with customer of Swisscom Switzerland Ltd. Then the author analyzed the cross interview results and interpreted the findings in the desk research. 2.1. Desk Research The goal of the desk research was to identify different literature pertaining to the topic of ICT outsourcing. It served as theoretical background and lead for the whole Hilal Sahbaz 19 August 2011 12 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Bachelor thesis. The desk research was conducted with information and literature obtained through the Network of Libraries and Information Centers in Switzerland (NEBIS) as well as on the Internet. The combined theoretical framework, relative to the studied issue and proposed propositions, draws on acknowledged current strategies by decision-making researchers. 2.2. Interviews Out of the desk research, the author developed, together with the supervisor and the client, two interview guidelines in order to conduct interviews with outsourcing specialist and Swisscom clients. All interviews followed the same semi-structured method and both interview guidelines for Swisscom outsourcing specialists (see page 75, Appendix: Interview Guideline –ICT Outsourcing Specialists) and Swisscom clients (see page 76, Appendix B: Interview Guideline – Customers of Swissscom) had been sent to the Swisscom contact person beforehand. After the questions were reviewed the data collection started with personal interviews with six outsourcing specialists. The interviewees for the second part of interviews, namely the Swisscom customers, were nominated by ICT outsourcing specialists. 2.2.1. Target Group The target groups were defined by the client; they are six outsourcing specialists and two clients of Swisscom: Hilal Sahbaz 19 August 2011 13 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Table 1: Interview Partner – Outsourcing Specialists Last Name Name Position Company Mazziotta Guiseppe Outsourcing Account Executive Swisscom Switzerland Ltd Achermann Daniel Senior Solution Architect Swisscom Switzerland Ltd Burtscher Andrea Outsourcing Business Manager Swisscom Switzerland Ltd Studer Basil Head of Outsourcing Delivery Management Swisscom Switzerland Ltd Lindt Marc Head of Outsourcing Services Swisscom Switzerland Ltd Tofighi Bahman Outsourcing Account Executive Swisscom Switzerland Ltd Source: Author Table 2: Interview Partner – Clients of Swisscom Last Name Name Position Company Horvath Andreas Head of Global Network Delivery AXA Technology Services Bischof Dieter Ringier AG Source: Author The reason why only two clients of Swisscom were interviewed was that it was not possible for the client to arrange further interview appointment with its clients. The duration for each interview was approximately 40 minutes. The interviews with outsourcing specialists were conducted at Swisscom in Zürich, with Mr. Horvath at AXA in Winterthur and with Mr. Bischof at Rinigier in Zofingen; each of them was recorded and transcribed. Hilal Sahbaz 19 August 2011 14 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd 3. Introduction into the Issue ICT The introduction to issue ICT outsourcing requires definitions and an overview of the development of outsourcing as well as an elaboration on ICT outsourcing. 3.1. Definition of Outsourcing In the literature there is no single description of outsourcing. The term “outsourcing” is a word combination of the terms “Outside” and “Resource” and means Outside Resource Using. Atlinkemer, Chaturvedi and Gulati (2004) explain the term as the act of subcontracting a part or all of an organization’s information systems work to external vendors, to manage on its behalf. Loh and Venkatraman (1992, p. 7) define it as managing an organization’s IT infrastructure through governance mechanisms with other organizations. According to Horchler (1995, p.1) it describes the ways and opportunities to optimize business functions and processes through contracting services to external service providers, which previously have been performed by internal functional units. Principally, all descriptions lead somehow to transferring the value-added activities of the organization to suppliers. By delivering services and components to qualified and specialized providers the production costs and development costs, but also service overhead costs, are often reduced. By concentrating on their core activities, organizations realize cost advantages and improve their own operative and strategic market position (Gabler Verlag, n.d.). Hilal Sahbaz 19 August 2011 15 of 76 3.2. Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Historical Development of IT Outsourcing In the 1960s and 1970s organizations were proud of being independent. In order to avoid perceived uncertainty, they produced everything on their own. Therefore enterprises operated their electronic data processing as well as all other services by themselves. Communication was done through telephone and data were transmitted by mail or interoffice mail. The main focus was cost reduction. In the 1980s this started to change; organizations began to strengthen and develop their core competencies. This procedure confronted the organizations, for the first time, with the “make or buy” decision and thus raised the idea of outsourcing. Divisions such as IT infrastructure and wage and salary administration were referred to the responsibility of independent organizational units. This developed a market for services such as information technology (IT) and outsourcing started to gain currency in management practice. Nowadays we have a fully developed, mature IT market, where make-or-buy decisions take an institutional role. Communication takes place through exclusive and public networks such as Internet, Intranet and Extranet. E-commerce and E-procurement are strategic tools that have gained vital importance with regard to sales and purchase (Horchler in Gründer 2004, p. 17). 3.3. Integration of ICT The introduction of fax and e-mail enlarged the range of communication channels, and the speed of information exchange increased. Eventually, with the Internet, data, resources and applications became available always and everywhere. Furthermore, it made possible cross-linked business units across national borders. Mobile telephony Hilal Sahbaz 19 August 2011 16 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd complements those net and increases the range of IT services. However, IT outsourcing couldn’t and cannot serve this evolution by itself. IT systems and telecommunication (TC) had to be merged, operated, managed and continuously developed in their entirety. IT and TC merged into a common base, namely into information and communication technology (ICT) which no longer differentiated the individual elements. Henceforth, IT and TC are fully integrated, and ICT service providers develop different applications and operate them (Horchler in Gründer 2004 p.17ff). 3.4. ICT Outsourcing Ever since Kodak decided to hire out its data processing and communication network to DEC, IBM and Businessland in 1989 there has been a trend toward ICT outsourcing (Johansen, n.d.; Horchler, 1996, p.3). Nowadays, ICT outsourcing is an entire end-toend management of the whole ICT without any interface. The ICT service provider is responsible for the complete IT as well as ICT infrastructure and the operation of their applications. However, the customer (service user) is still responsible for the ICT strategy and IT monitoring. All integrated services are collected in one service management that is the central contact point for the customers – one face for the customer. However, the service provider includes, in the Service Level Agreement, all integrated services and makes them visible to the client (Gründer and Lessmann in Gründer 2004, p. 177), namely, the functional service level, which takes over the availability of individual networks, applications, data center, and workplace. The service provider generally reports periodically about the service performances as well as the quality, and is has overall responsibilities. However, to provide such a full ICT outsourcing service requires a service provider that possess competencies and is Hilal Sahbaz 19 August 2011 17 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd experienced in the IT and TC fields and in the whole ICT process. Furthermore, the service provider should be able to integrate both fields (Horchler in Gründer 2004, p. 21). Figure : Sourcing Model Source: Jouanne-Diedrich in euphorie.de, n.d 3.5. Outsourcing Model The choice of the outsourcing model is an important component of outsourcing strategy. There exist various outsourcing forms and, due to customer requirement, new ICT outsourcing forms are being developed continuously. The outsourcing model possesses various attributes, as seen in Figure 1. Hilal Sahbaz 19 August 2011 18 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd 3.5.1. Financial Dependence Before outsourcing, the firm must first decide whether the ICT outsourcing is to be implemented internally or externally. The internal outsourcing of ICT involves setting up a subsidiary that acts as the exclusive ICT service provider for the parent company. External ICT outsourcing occurs when an external, economically independent company (service provider) is commissioned to take over the ICT services for the assigning company (Horchler 1996, p. 17). 3.5.2. Level of External Performance Procurement The level of external performance procurement can be divided into three stages: total insourcing, which means that no service is outsourced to an external provider; selective outsourcing, when up to 80% of the services are outsourced; and total outsourcing, which occurs when the whole process is outsourced to an external provider. (Jouanne-Diedrich 2007, cited in ephorie.de IT Sourcing-Map, n.d.). 3.5.2.1. Total Outsourcing Total Outsourcing occurs when all ICT services are completely outsourced to a service provider; at least 80% of an organization’s ICT budget must be spent on the service provider (Saravanja, n.d.). In this case, the service provider supplies a full outsourcing service, which includes both the transfer of resources and orders as well as associated management tasks. Total ICT outsourcing also includes the integration of employees and the assets and hardware acquisition. Further, the service provider takes over the Hilal Sahbaz 19 August 2011 19 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd overall responsibility for all ICT services, including human resources management, purchasing, financing, maintenance and disposal (Bohlen cited in Gründer 2004, p. 56). 3.5.2.2. Selective Outsourcing The most common model is selective outsourcing. It occurs when only a part of ICT assets is outsourced. Usually, infrastructure management and support are outsourced. Compared to Total Outsourcing, Selective Outsourcing means that less than 80% is outsourced (Willcocks 1994, cited in Johanson, n.d.). 3.5.3. Strategic Aspects Within the IT outsourcing strategy different objectives can be pursued. When following the Co-Sourcing strategy the performances are not charged by technical units, but based on business process and/or outcome (Jouanne-Diedrich, n.d., p. 129). 3.5.3.1. Co-‐Sourcing Co-Sourcing was originally created by EDS (Electronic Data Systems Corporation) (Lacity and Willocks 2001, cited in Jouanne-Diedrich, n.d., p.129). It is characterized by the fact that the settlement of the services/performances is no longer made based on technical units (as is still the case in ASPs), but is based on business process or even on success (Jouanne-Dietrich, n.d., p. 129). Hilal Sahbaz 19 August 2011 20 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd 3.5.3.2. Transitional Outsourcing Transitional Outsourcing proceeds when something new is implemented in the company. Organizations operate this model to introduce major changes such as moving from one technological platform to another. The organization decides to temporarily outsource the function until it builds up competence to handle it internally (Willcocks and Lacity 1998, cited in Johanson, n.d.). 3.5.3.3. Transformational Outsourcing The Transformational Outsourcing model combines the outsourcing of an IT department with a complete reorganization. The IT department will be spun off from the organization into a separate business or completely transferred to an external provider, whereby all internal IT employees become external provider employees (Saravanja, n.d). 3.5.3.4. Value-Added Outsourcing Value-added outsourcing occurs as a form of outsourcing in which both parties bring expertise to operate together on the external market. Thus, the defining element is a partnership-based union with shared revenues and risks (Lacity and Willocks 2001 cited in Jouanne-Diedrich, n.d., p. 129) Hilal Sahbaz 19 August 2011 21 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd 3.5.4. Time Aspects The time aspect provides information about whether the processes are permanently outsourced or are to be performed again internally at a later stage (backsourcing). Backsourcing is when previously outsourced services and processes are brought back in-house and operated internally again. 3.5.5. Number of Service Providers Multi-Sourcing is a model that is mostly used when the services are completely outsourced to different service providers. In contrast, Single-Sourcing is when the organization obtains services from only one service provider. 3.5.6. Level of Operation Orientation The level of operation orientation refers to the form and complexity of the outsourced services. IT infrastructure outsourcing is the most frequent. In the case of Application Outsourcing, IT applications are outsourced. Business Process Outsourcing is the outsourcing of entire business processes. A special form of business process outsourcing is the Knowledge Process Outsourcing, which deals with the outsourcing of knowledge-intensive processes such as R&D. Hilal Sahbaz 19 August 2011 22 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd 3.5.6.1. IT Infrastructure Outsourcing (ITO) ITO includes the provision of some or all information systems by one or more service providers. Responsibility for key decisions associated with those provided services are transferred upon the service provider. Typical outsourced ITO functions are data conversion, database administration, help desk, content development, application development, systems administration, mainframe, network management and website development functions (Ling and McKenzie 2011) 3.5.6.2. Business Process Outsourcing (BPO) Business Process Outsourcing occurs when an organization hands over the management and optimization of a business process to a third party. BPO is a longterm customer-specific delivery and management of key processes. The most common processes covered by customized BPO are accounting, facilities management, logistics, customer relationship management and further business processes to improve performance (Ling and McKenzie 2011). 3.5.6.3. Application Outsourcing Application Management Service (AMS) This model includes the outsourcing of complex and critical application environments such as ERP, CRM, or Web applications. The service provider takes over the hosting, operation, configuration and optimization, and maintenance of software (Bohlen cited in Hilal Sahbaz 19 August 2011 23 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Gründer 2004, p.58). However, the service provider has to possess the appropriate know-how regarding the applications used by the company. Application Service Providing (ASP) Application Service Providing occurs when defined application software is made available for customers via a secure Internet connection, which can be used by several firms simultaneously. Actually, it is a leasing of application software, whereby the ASP customer pays the application service provider based on usage or time license fees . Application Service Providing includes the use of common IT applications, along with the required infrastructure (Heinrich 2002, p. 115). 3.5.7. Location The Offshore Sourcing model means that the service provider is abroad. The reasons are lower wages, hence lower outsourcing costs. If the service provider is from a neighboring country, then it is called Nearshore Sourcing. The term Global Sourcing is also used for Offshore Sourcing or for a combination of models. 3.6. ITIL – ICT Service Management IT Infrastructure Library (ITIL) is the ICT Services Management Framework. ITIL is the most widely implemented standard for IT Service Management in the world, which was developed in 1989 by Central Computer and Telecommunications Agency (CCTA) in recognition of the trend towards end-to-end ICT Services Management and lifecycle management (Government of Victoria 2006, p.1). The main purpose was to achieve Hilal Sahbaz 19 August 2011 24 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd greater transparency and cost savings in purchasing IT services. This is made possible through useful defining of service processes and service levels. ITIL is based on proven best practice knowledge and experience from professionals in the management and delivery of quality ICT services (Skrippek in Gründer 2004, p. 220). Adapting ITIL offer a range of advantages that includes: • Improved IT services • Reduced costs • Improved customer satisfaction through a more professional approach to service delivery • Improved productivity • Improved use of skills and experience • Improved delivery of third party service. Hilal Sahbaz 19 August 2011 25 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Figure 2: ITIL Process Model Source: Ruggles, 2007 3.6.1. Service Support Process ITIL is based on a process approach which is scalable to both large and small IT organizations. Furthermore, it has been designed and structured to deliver flexibility for implementation by any company and model of ICT services provision (Government of Victoria 2006, p. 3). Basically, the processes of Service Support are event-driven. These events are called Incidents. An Incident is not a part of the standard operation of the service and causes an interruption of services or a reduction in service quality (Skrippe in Gründer 2004, p. 222). Hilal Sahbaz 19 August 2011 26 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Figure 3: Service Support Process Model Source: Best Management Practice, 2011 3.6.1.1. Incident Management The primary function of Incident Management is to restore normal operations as quickly as possible with the least possible impact on either the business or the user, at a costeffective price, by responding to actual Incidents and immediately removing of the Hilal Sahbaz 19 August 2011 27 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd cause. The priority of an Incident is influenced by two factors, namely urgency and impact. ITIL uses three metrics for determining the order: - Urgency: The degree to which the incident's resolution can tolerate delay - Impact: The effect on business operation that an incident has. - Priority: How quickly the service desk should address the incident. After classification and prioritization, the Request for Change (RfC) is transferred to Change Management (Skrippek in Gründer 2004, p. 223ff). Other tasks of Incident Management include the monitoring and recording of incidents, namely, to report and control the agreed-on service levels. The service levels are documented in the Service Level Agreement (SLA), which is created by Service Level Management (Chapter 6.2.1). Furthermore, Incident Management is responsible for communicating the reported incidents to the client (Skrippek in Gründer 2004, p. 225). 3.6.1.2. Problem Management Problem Management minimizes the impact of problems on the organization that are caused by errors in the infrastructure, and prevents the appearance of disturbances, problems and errors (Tipton and Krause 2008). Problem Management has three core activities: - Problem handling: Ascertainment and investigation of problems. - Error handling: Monitoring of unknown errors and template of RfC - Problem preventing: Identification of potential disturbances Hilal Sahbaz 19 August 2011 28 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Problem Management supports problem handling within the frame of Incident Management. It provides workarounds for accrued incidents. A problem is an unknown cause for one or more incidents. After a solution is developed to solve a problem, the problem becomes a Known Error. However, if a change is required in the current implementation of IT services to resolve a problem, it will be defined in the RfC (Skrippek in Gründer 2004, p. 226). 3.6.1.3. Configuration Management Configuration management is the implementation of a configuration management database (CMDB) that covers details of the organization's components that are used in the acquisition and management of its IT services (Tipton and Krause 2008). This does not mean a hardware-oriented configuration, but a configuration of all services for the provision of relevant components, such as: software components, description of method, Service Level Agreement, description of function, employees, service appreciable hardware components, etc. (Skrippek in Gründer 2004, p. 228). The main activities of configuration management are: • Planning: Planning and defining the scope, objectives, policy and process of the CMDB. • Identification: Selecting and identifying the configuration structures and items within the scope of the IT infrastructure. • Control: Ensuring that only authorized and identifiable configuration items are accepted and recorded in the CMDB throughout its lifecycle. Hilal Sahbaz 19 August 2011 29 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd • Status accounting: Keeping track of the status of elements throughout the entire lifecycle of configuration items. • Verification and audit: Auditing after the implementation of configuration management to verify that the correct information is recorded in the CMDB, followed by scheduled audits to ensure the CMDB is kept up-to-date. (Tipton and Krause 2008) 3.6.1.4. Change Management Change management ensures that all areas apply a standardized process when implementing change into a production environment, in order to minimize the impact of change-related disturbances (Skrippek in Gründer 2004, p. 230). Change is defined as any adjustment, enhancement, or maintenance to a production business application, system software, system hardware, communications network, or operational facility (Tipton and Krause 2008). Input for Change Management is a Request of Change that can come from different sources, for instance: - Incident Management: RfC of user - Problem Management: Definition of RfC as a solution for a problem - Service Level Management: Change of existing SLA at the client’s request - Availability Management: Improve or optimize availability of IT services (Skrippek in Gründer 2004, p. 230) Hilal Sahbaz 19 August 2011 30 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Not every RfC can be accepted and implemented, and therefore a Change Advisory Board – a decision-making and control authority – is required within the change management. CAB varies in its composition and size depending on the economic importance and the scope of services. Figure 4: Change Management Process Model Source: Osiatis.es, n.d The RfC are assessed according to their urgency and their impact on the adducing IT services. In addition, the standards regarding SLA and Financial Management are applied to decide whether an RfC is accepted and implemented. For this reason, the parties should be represented on the CAB (Skrippek in Gründer 2004, p. 231ff). Hilal Sahbaz 19 August 2011 31 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd 3.6.1.5. Release Management Release Management implements “changes to IT services taking a holistic (people, process, technology) view which considers all aspects of a change including planning, designing, building, testing, training, communications and deployment activities” (ITIL Library.org, n.d.). The practice of effective Software Control and Distribution (SC&D) includes the design of a Definitive Software Library (DSL), into which the master copies of all CIs are stored. The DSL consists of a physical store and a logical store. SC&D processes involve the management of the software CIs and their distribution and implementation into a production environment. This contains the definition of a release program suitable for the company, the definition of how version control will be implemented, and the procedures for how software will be built, released and reviewed (ITIL Library.org, n.d.). Based on the release unit, Release is divided into: - Delta Release is a release of only that part of the software which has been changed. Full Release means that the entire software program will be released again. - Packaged Release is a combination of many changes. (Tipton Hilal Sahbaz and Krause, 19 August 2011 2008) 32 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Table 5: Release Management Process Source: Own elaboration based on Skrippek in Gründer, 2004 The main activities of Release Management are: - Release Policy is a guideline for release planning, naming and numeration convention, as well as communication channels and contents, and distribution channels. - Release Planning includes providing definition of the release to implement necessary CI up-date. - Build and Configure the Release is the implementation of the release planning into a concrete new release version. If a release cannot be implemented correctly, a fall back strategy will be developed. Hilal Sahbaz 19 August 2011 33 of 76 - Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Release Review and Acceptance includes the technical review conducted by the user and operational review conducted by the system administrator. After the review the acceptance of the release is agreed on. - Roll-out Planning determines the implementation strategy: determining the schedule and action plane. - Communication and Training Preparation is the provision and distribution of the new release information, and the preparation as well as the planning of the upgrade. - Distribution and Installation is the takeover of the release to production. At the same time the Release Management monitors the entire logistic from provision through to delivery of soft and hardware. (Tipton and Krause, 2008) 3.6.1.6. Service Desk Service Desk is the central interface between users and the IT service management. It is a single point of contact and deals with incidents, problems as well as questions and provides an interface for all activities in the service support process (Ebenda, cited in Skrippek in Gründer 2004, p. 234). Service Desk is a functional unit but not a process. Usually, the provided support is divided into three levels according to technical degree, namely, 1st, 2nd and 3rd Level Support (Srippek in Gründer 2004, p. 234). Benefits of a Service Desk are: - Increased first call resolution - Skill-based support - Rapidly restored service - Improved incident response time Hilal Sahbaz 19 August 2011 34 of 76 - Quick service restoration - Improved tracking of service quality - Improved recognition of trends and incidents - Improved employee satisfaction Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd (Tipton and Krause 2008) 3.6.2. Service Delivery Processes Next to operational process a well-performing service provider requires processes to support and maintain the administrative aspects (Skrippek in Gründer 2004, p. 236). Service delivery ensures that IT infrastructure is provided at the right time, in the right capacity, at the right price, and is applied in the most efficient way. These are made possible by doing analysis and decisions to balance volume at a production or service point according to the customer’s requirements. Further, it includes the processes required for the planning and delivery of quality and improving the quality of the services delivered (Tripton and Krause 2008). Service Delivery processes and their relationship are presented in the Figure 5. The frame of the thesis allows only a detailed discussion of Service Level Management. The other processes will be briefly presented. - Availability Management optimizes the performances of IT infrastructure and its supporting units to achieve a cost-effective as well as long-term availability ratio that enables the organization to reach its objectives. Hilal Sahbaz 19 August 2011 35 of 76 - Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Capacity Management recognizes and determines the future as well as actual service delivery and required sources for service delivery. Further, it ensures that both current and future capacity and performance aspects are rendered costeffective. - Continuity Management supports the general process of Continuity Management for IT services in the organization while regaining the required IT technic and resources within the essential and agreed timeframe. (Skrippek in Gründer 2004, p. 237ff) Figure 6: Service Delivery Process Model Source: Best Management Practice, 2011 Hilal Sahbaz 19 August 2011 36 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd 3.6.2.1. Service Level Agreement Service level management SLM works at maintaining and gradually improving business activities aligned with IT service quality. This occurs through a continuous cycle of agreeing, monitoring, reporting and reviewing IT service achievements and through taking action to eliminate unacceptable levels of service quality (Skrippek in Gründer 2004, p. 238). Furthermore, SLM is responsible for assuring that the service objectives are documented and agreed in the SLA and monitors and reviews the current service level reach against their SLA objectives. SLM process manages and improves the agreed level of service two parties, the service provider and the service receiver (Tipton and Krause 2008). Moreover, Service Level has to be assigned for various areas, for instance network support, hardware support or application support. Extensive descriptions are necessary to formulate the Service Level audit-proof. In addition, review cycle should be agreed to assess the delivered services (Skrippek in Gründer, 2004 p. 239). Benefits of Implementing Service Level Management are: - It enables both the customer and the services provider to have a clear comprehension of the expected level of delivered services and their related costs for the organization, by drafting these objectives into formal agreements. It can be applied as a basis for charging for services, and can present to customers the value they are receiving. - It supports the service desk with the handling of external supplier relationships, and introduces the possibility of negotiating improved services or reduced costs. (Tripton and Krause, 2008) Hilal Sahbaz 19 August 2011 37 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd 4. Interview Results This chapter presents the findings of interviews with Swisscom ICT specialists and with outsourcing customers of Swisscom. 4.1. ICT Outsourcing Specialists The twenty-four questions asked are summarized into the following topics: Target group, ICT outsourcing of Swisscom, success of ICT outsourcing, process of outsourcing and competition. 4.1.1. Target Group All of the specialists have been in the outsourcing business for a long time – at least 9 years. Some of them operated in different function from their present one, but their work was related to outsourcing. Mr. Mazziotta declared working in different functions enabled him to gather experiences in various outsourcing functions and allowed him to have a broader perspective. However, the specialists were involved at least in nine outsourcing projects in Swisscom Switzerland Ltd. The Senior Solution Architect, Mr. Achermann, couldn’t even tell in how many project he had participated, due to his several roles in each project. Since the clients are corporate businesses, and the projects are extensive and complex, the specialists supervise one or maximum two projects. For instants, Mrs. Burtscher is responsible for the outsourcing project of a very large and well known Hilal Sahbaz 19 August 2011 38 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Swiss bank, and Mr. Tofighi supervises two outsourcing projects. However, some specialists are simultaneously involved in other project as supporting adviser. Furthermore, the interview responses indicate that the customer portfolio of Swisscom Switzerland Ltd is wide. The clients are from the industries of insurance, banking, consulting, industry, media and retail. Also, their customers’ targets and scope are very different, which enabled the specialists to establish and work on outsourcing project for various types of industries. 4.1.2. ICT Outsourcing of Swisscom The interviewees were asked about the products they offer to their client. All of the interview partners offer classical Telco products. Mr. Studer explained that they run everything on ICT, which the customers operated before on their own and would like to outsource now. This product portfolio includes standard voice: fixed-line, mobile; network: LAN, WAN; security services, and further specialties such as Internet Protocol Telephony (IPT), contact center solutions and trading solutions, except IT specific services. To the question what kind of outsourcing model the clients chose, all interview participants answered with full outsourcing. Mr. Mazziotta stated: “Since we are in the Telco business, our products are established, whereas they are non-core businesses for the service user. Therefore, the approach is to overtake infrastructure, staff and operational responsibility, namely, full-service.” However, Mr. Studer declared that there are cases where customers don’t outsource their assets to Swisscom Switzerland Ltd. For example, many customers operate internationally and they also outsource globally. In such cases Swisscom Switzerland Ltd works with its global partners and sometimes its partner takes over the assets. Furthermore, Mrs. Burtscher Hilal Sahbaz 19 August 2011 39 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd pointed that the decision-making is strongly dependent on the industry the client is operating in. For instance, customers from finance and the banking industry have a different security view than the clients from other industries. “However, a lot has changed and developed especially in the finance and banking sector. Due to the financial crisis and cost pressures, the topic of outsourcing arose”, stated Marc Lindt. According to Giuseppe Mazziotta, Swisscom Switzerland Ltd has got the strengths and is also well positioned in the financial sector: “We have the specific know-how. The Swisscom Switzerland Ltd was allowed to establish the first outsourcing project in a financial institution.” 4.1.3. Success of Outsourcing For almost all interview partners cost reduction is the main argument to outsource the ICT - to obtain the same or higher quality for less. Mr. Mazziotta explained that this is possible because ICT is the core competence of Swisscom and therefore Swisscom can provide it efficiently and at a reduced rate. Another argument of the interviewees is that an organization can focus on its core competences as well as develop its profitable business, and does not need to worry about its ICT business, which is the core competence of Swisscom Switzerland Ltd. Further communicated arguments are developing technology, innovation and required know-how and skills. Mr. Achermann declared: “Technology is complex and continuously developing. Many organizations are not capable of maintaining the infrastructure, staff and know-how.” All these arguments are almost without exception applicable to all business sectors. However, the specialists were asked also about the risks for customers. This question was not so easy for them to answer. In summary, they answered that the main risk is that the client is not well prepared for outsourcing, meaning that they does not know their ICT Hilal Sahbaz 19 August 2011 40 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd business well and therefore are not capable of analyzing it. Eventually, this may lead to improper due diligence. Further, Basil Studer explained that if the business is once outsourced, it is too complex to source it back. However, according to Basil Studer, Swisscom has, for each project, a risk process that includes risk identification, evaluation and deposited corresponding sanctions. Further, “we have certified processes, among them access management and declarations”, stated Mr. Achermann. In a further question, the interviewees were asked about the reasons for outsourcing failures. Renege on expectations, too high expectations, poor establishment of confidence base, poor relationship and communication were named most frequently. To prevent such cases, “it is important to communicate and maintain clear communication while whole outsourcing process and after the transformation.” Further, “we have for different client improvement services to ensure that improvement continuously occurs”, declared Mr. Studer. Mr. Mazziota explained that while the agreement stage changes should be made and the contract should be continuously adapted to the business environment. In a last question about successes of outsourcing, specialists were asked what kind of criteria the clients has to accomplish and perform. According to Mrs. Burtscher the organization has to know what they want and document their objectives. For Mr. Lindt it is important that clients perform their duties: “the client should give clear orders, so that we can respond and respect the conditions”, he added. However, Mr. Mazziotta listed three criteria: first the customer has to understand that the responsibilities toward his organization remain. Second, he has to believe in outsourcing, and last but not least the better the client integrates the service provider in his business changes the better and faster the service provider can perform. Hilal Sahbaz 19 August 2011 41 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd 4.1.4. ICT Outsourcing Process Summarized, the outsourcing process is divided into four phases within the Swisscom Switzerland Ltd. The stages are ordered in the following way: offer, transition, transformation and operational phase. It was difficult for the interviewees to answer how long such a process takes, because the duration of a whole process varies depending on the project. Generally, the offer phase lasts three to twelve months, the transition phase two to three months, transformation phase six to eighteen months and the operational phase five to seven years. The first stage includes self-identification and qualification of ICT business, then the RfS and due diligence. In the transition stage everything is prepared so that on the day the responsibilities are transferred to service provider simultaneously occurs the acquisition of people, process and tools. During transformation phase the transformation starts. Everything will be transformed from the status quo, which is customized to service provider standards. On the day one it is the present mode of operation (PMO) and at the end of the transformation stage it should be the future mode of operation (FMO), namely completely transformed into service provider standards. Last but not least, in the operational phase, the services will be continuously evaluated and improved. The interview partners were also asked about the risk in the single stages. It was not so easy for the interviewees to answer this question because it also depends on project and customer. However, Mr. Mazziotta stated if the transformation lasts longer than it was planned or even if it’s not possible to transform the service into service provider standards. And Mrs. Burtscher mentioned:” At the due diligence 100% transparency is required to determine the right performance conditions”. Hilal Sahbaz 19 August 2011 42 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd 4.1.5. Competition Almost all specialists answered that there is a big competition in the Telco business, especially in globally. Basil Studer explained that there are many strong global service providers. He added: “In the future the competition will rather increase than decrease.” Additionally, Guiseppe Mazziotta declared that corporate businesses such as banks want to outsource globally, but want only one provider. As a local provider it is difficult to compete in such an environment. Moreover Basil Studer added: “In international level Swisscom is challenged to cooperate with x international providers. It does not have only one partner.” However, Bahman Tofighi stated that Swisscom established a good infrastructure in the area of voice and data that has spread in Switzerland. And Marc Lindt mentioned: “With Swisscom the total solution is ensured”. 4.2. Customers of Swisscom Due to the low number of interview partners the results are divided according to companies, namely Case AXA and Case Ringier. 4.2.1. Case AXA Winterthur AXA Winterthur is one of the leading insurance companies in Switzerland. It employs roughly 4300 persons in Switzerland and its product portfolio includes complete nonlife insurances. Furthermore, it has over 1,6 million private and corporate customers in Switzerland that are insured with AXA Winterthur. Hilal Sahbaz 19 August 2011 43 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd The interview partner, Andreas Horvath, is employed at AXA Winterthur as Head of Global Network Operations. He is responsible for incidents, problems and changes of global network of AXA. Furthermore he leads 170 employees and is responsible for the operational management of outsourcing agreement of an amount over 90 million CHF. AXA has outsourced its networks, voice and security services to Swisscom Switzerland Ltd. The outsourcing agreement was signed in 2006 and the primary expiration of the contract was end of 2010, but it was extended until end of 2013. Mr. Horvath explained that cost reduction, cost transparency and quality were the reason for AXA to outsource its ICT. “Especially, reduction of total cost of ownership was the main driver”, he added. However, he mentioned also that they recognized the risk of loss of knowhow, but they didn’t take any action against this risk. Over time it has materialized and today, after five years of outsourcing, they see and feel that this internal loss has become a problem. Furthermore, he said: “today, it is not possible to source it back any more and operate the services internal. The collective knowledge and competences are lost at all levels of the organization.” For the decision-making, AXA has considered the quantitative method, and contrasted benefits versus costs. The business manager and CTO attended this decision-making. However, Mr. Horvath declared that the whole outsourcing process lasted two and half years. “Actually the outsourcing project started midyear of 2005 and the end of the project was end of 2007”, he added. During the process AXA recognized risks such as loss of know-how, dependence and turn-lock, meaning that they cannot change the provider anymore. He explained that the processes are so integrated and connected that a dissolution would be to complex and expensive. Hilal Sahbaz 19 August 2011 44 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Moreover, Mr. Horvath explained that to have a successful outsourcing AXA strove for an accurate due diligence phase. The project was the CTO’s own project, therefore he was involved and according to Mr. Horvath they had very good senior management support. He added that the project was well operated and managed. “We sought from the beginning a partnership model, and today there still exists a good relationship between AXA and Swisscom Switzerland Ltd”, said Mr. Horvath. However, AXA evaluate its ICT outsourcing with Swisscom as very good. Mr. Horvath reasoned this assessment as following: “ ICT of AXA Switzerland is best in class based on quality within AXA (global) – the highest availability and best quality of network we have in Switzerland, very good relationship with Swisscom and also in price competitive. We have each year cost reduction” Additionally, he explained that AXA globally outsource to Orange, but due to Swisscom’s high quality service, they do outsource in Switzerland to Swisscom. To the last question, what they would do differently with today’s perspective, he answered with: “to exert more and previous influence on staff of Swisscom during the transition phase, because there were unskilled people and AXA waited patiently until they made Swisscom hire the right people with the required skills.” 4.2.2. Case Ringier AG Ringier AG is a multinational and the biggest media company in Switzerland, with its headquarters in Zofingen. It leads broadcast, radio, online and mobile media brands. Over 7000 people are employed at Ringier AG worldwide. Its core competences are whole media area, publishing and editorial services. Hilal Sahbaz 19 August 2011 45 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Dieter Bischof, the interview partner, is the head of IT processes and in the case ICT outsourcing contract manager Swisscom. Rinigier AG signed a 5-year ICT outsourcing agreement with Swisscom in March 2010. The outsourcing agreement includes the services WAN, LAN, voice, security services and IP address management, which is actually a part of network infrastructure. According to Mr. Bischof the main motive of outsourcing was cost reduction and a further reason was concentrating on core competences. The entire network and telephony are too standardized and therefore they no longer need to operate it on their own. However, he added that the decision to outsource was also related with risk such as abandoning flexibility and individual solutions, and in turn that outsourcing costs more. He explained; “From the service provider we receive a standardized product, because the service provider has to appoint as much as possible with economies of scale. When I have an individual solution the service provider says no or it costs too much.” Moreover, he stated that the staff expenses are three times higher that assumed. “After you have outsourced your employees, you need other people who coordinate, monitor, evaluate and manage the whole outsourcing and that’s why eventually outsourcing costs more”, added Mr. Bischof. However, according to Mr. Bischof the outsourcing decision was a CIO initiative and the decision-making happened purely based on cost analysis. In addition, he also mentioned that the decision was unanimous and that it had an emotional impact – certainly with downsizing. The outsourcing project at Ringier AG started in April 2009 and last until August 2010. Mr. Bischof explained that the due diligence was a very intensive phase for both sides; all processes had to be documented and afterwards the transition lasted 3 months and transformation 5 months. In addition, he mentioned that now, after the transformation, they are no longer able to insource, but it also wouldn’t Hilal Sahbaz 19 August 2011 46 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd make sense to. Further, Mr. Bischof was asked about the risk in the single outsourcing stages. He mentioned that in the first stage it is very important to ensure whether the offer match the RfP and further, in the due diligence, everything has to be examined properly. However, Mr. Bischof explained: “The essential condition for outsourcing is to know the service/business very well. I can outsource nothing, which I cannot handle, because than I cannot define the business and review the quality of service. You cannot outsource problems.” ICT outsourcing services is, according to Ringier AG, good. Mr. Bischof stated that at the technical performances Swisscom is absolutely professional. In entire network and telephony services they are the best in Switzerland. However, he added: “We are talking about whole ICT outsourcing and in monitoring and order processing – web shop – it still needs improvement.” In conclusion, he was asked what they would change or do differently. His answer was: “We were focused on management and formalities of agreement, and insufficiently on technical issues. Afterward, we realized that we signed technical conditions that are unknown.” 5. Solution Approach This chapter presents based on desk resource and conducted interview possible solution approach for a ICT outsourcing white paper. Hilal Sahbaz 19 August 2011 47 of 76 5.1. Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Introduction In today business world the access of information, communication and networking become an essential element of doing businesses. The development of information and communication technology (ICT) and its applications are changing the way businesses work and interact (Horchler in Gründer, 2004, p.16). Furthermore, due to continuously increasing competitive pressure, quality, flexibility, innovation, technology and associated costs become evermore important business drivers. To be successful and lucrative in this competitive environment, on the one hand organizations have to focus on its core competencies and on the other hand perform necessary basic services such as ICT, which are complex and costly (Interviews, 2011). In this case considering whether if would be more economical whilst to be able more focusing on its own core competencies is a strategic action. The service provider can perform equally or even better quality for lower costs, by taking advantages of economies of scale and focusing on basic services which are its core competencies (Mazziotta, 2011). Nowadays information and communication technology (ICT) is essential to corporate businesses. Effective and efficient insertion and use of ICT boost and maintain competitiveness by supporting business processes. Often is for internal IT department too complex and extensive to operate and foster ICT services and solution by their own (Studer, 2011). ICT services require efficient management, coordination and monitoring. In the event of non-fulfilment of these performances, organizations face high employment expenses, unprofitable procurement, poor process and unreliable operation (Lindt, 2011). Next to qualified people, it requires corresponding infrastructure (Mazziotta). Hilal Sahbaz 19 August 2011 48 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd For these reasons, it is recommended to consider and evaluate the potential to outsource its ICT to external service provider in order to focus on its core competencies and maximize its profit. Swisscom Switzerland ICT provides a broad range of information and communication products and services for corporate businesses to find appropriate ICT outsourcing solution. Furthermore, it includes services such as good consulting, efficient project implementation, active accompaniment of solutions, rapid adaptation of solutions, quick rectification of faults, online management of solutions, and check and process of bills (Swisscom, 2011). 5.2. The Benefits of ICT Outsourcing Currently majority of corporate businesses consider outsourcing some parts of their businesses and most commonly their information technology function. There exist many advantages for doing so and the order of importance of the argument is different for the outsourcers. According to Beulen, Ribbers and Roos (2011, p. 15) the business strategy and the IT strategy of organizations have an influence on the order of the argument. Van der Zee and van Wijngaarden (1999) express that increasing IT services flexibility, decreasing the total cost of ownership of IT services and achieving IT services innovatively as the most important reason. Udo (2000, p. 423) address qualified ICT staff outside the organization, while Tiwana and Keil (2007, p. 622ff) point to realizing a strategic focus on central competences and therewith taking advantage of specialization and decreasing total cost of ownership of the ICT. Through conducted interviews with outsourcing specialists and customers of Hilal Sahbaz 19 August 2011 49 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Swisscom, and desk research have revealed the following main reason to outsource ICT: • Decreasing the total cost of ownership • Increasing flexibility of ICT services • Achieving innovation in ICT services • Achieving a technology shift • Ability to focus on its core competences • Rendering the ICT services costs variable • Improving the company’s financial ratios • Access to qualified and specialized staff (Beulen, Ribbers & Roos 2011, p. 15) Decreasing the total cost of ownership External ICT service provider offers at least the same services in higher quantities for lower costs than the organization’s IT department thus lowering unit costs and raising efficiency. This is possible form them due to economies of scale (Mazziotta, 2011). Furthermore, external service provider can obtain better prices both on the delivery side and buying side than organization itself, which is feasible by standardization of the information services (Studer, 2011). Increasing flexibility of ICT services Hilal Sahbaz 19 August 2011 50 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd External service provider is capable to react quickly to changes in the demand of services with regard to the quantity of these services (Burtscher, 2011). Such capability and flexibility is required to retain competitive positions. Furthermore, flexibility is also necessary to maintain with the market’s dynamics (Kanter, 1994 cited in Beulen, Ribbers & Roos, 2011, p. 16). Achieving innovation in ICT services Due to the increasingly rapidly developing of the information and communication technology services companies face growing complexity, especially large and international companies (Lindt, 2011; Achermann, 2011). Much of the ICT function’s attention and much innovation is necessary to maintain the business processes connected and keep up competitiveness (Klepper, 1995 cited in Beulen, Ribbers & Roos, 2011, p. 16). Achieving a technology shift The service provider seeks to use and apply latest and best technology to provide high quality product. The service provider has the ability to continuously adapt its services to changes in the market, by investing in latest technology. Ability to focus on its core competencies Providing information services is a supporting activity that contributes to core business Hilal Sahbaz 19 August 2011 51 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd processes. Its added value is limited and the competitive advantage to be achieved is limited as well (Lacity and Hirschheim, 1993 cited in Beulen, Ribbers & Roos, 2011, p. 18). To assign basic ICT services to specialized ICT service provider, leads organization be able to concentrate more on their own core competencies. Rendering ICT services costs variable If the ICT department of the organization is responsible for ICT service providing, the organization will have to invest in information and communication technology, which leads to fixed ICT costs. However, the external service provider can spread the investment cost over its several clients and keep the ICT services costs variable (Beulen, Ribbers & Roos, 2011, p. 19; Burtscher, 2011). Financial ratios Outsourcing IT services can improve financial ratios such as turnover, profit per employee and market to the book value without influencing the organization’s primary processes. For example the company reduces their book value and then has fewer staff (Loh and Venkatraman 1992 cited in Beulen, Ribbers & Roos, 2011, p. 19). Access to qualified and specialized staff Managing and operating ICT requires specialized skills and knowledge, therefore hiring the right person is especially important. Further, recruiting qualified staff is difficult and Hilal Sahbaz 19 August 2011 52 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd is related to high costs and staff turnover is a significant risk to service delivery continuousness (Beulen, Ribbers and Roos, 2011, p. 20). Staff of the external service provider is at least equally or better qualified and the external service provider is able to train and appoint specialized people (Lindt, 2011). 5.3. The Challenges of ICT Outsourcing Challenges The ICT outsourcing benefits are naturally associated with risks factors and challenges, which requires particular attention. Lack of Analysis In some extent, ICT outsourcing fails already in the evaluation phase due to a lack of analysis. When the organisation does not analyse accurately enough its ICT infrastructure and services, consequently it may make a wrong choice regarding outsourced processes and services. Errors in the analysis phase causes consequential errors in the offer or request stage (Mazziotta, 2011; Lindth, 2011). Therefore, it is not possible to draft a really suitable offer. Increased dependence on supplier Outsourcing information and technology services transfer the responsibility for their delivery to external service provider. For many organizations it is not easy to be dependent on their service provider and to discuss its requirements with outsiders instead of an internal IT department (Lacity and Hirschheim 1993). Furthermore, Hilal Sahbaz 19 August 2011 53 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd confidence hast to be built between the client and service provider. If the client lack of confidence in its service provider, the outsourcing cannot work well. The service user has to believe in outsourcing and in competencies of its service supplier (Mazziotta, 2011; Achermann, 2011; Lindt: 2011). A loss of knowledge and know-how When processes are contracted out, ICT department staff may transfer to the company providing the services. The knowledge and know-how of the staff will also transfer to the service provider and it will take much effort to obtain them again (Horvath, 2011). This may be a challenge for an organization and an argument for not being willing to outsource (Lacity and Hirschheim 1993 cited in Beulen, Ribbers and Roos, 2011, p. 23). Hilal Sahbaz 19 August 2011 54 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Confidentiality risks Since important organizations’ information is stored electronically – and under no circumstances should fall into the hands of competitors - the security risks are a frequently mentioned reason for not outsourcing the information services delivery (Beulen, Ribbers and Roos, 2011 p. 23). Decrease of Flexibility When the ICT is assigned to external service provider, organizations may not be as flexible anymore as before. They may not be able to order short-term, because the staff is not anymore internal and everything has to be done formal and documented. (Lindt, 2011; Bischof, 2011) Back-Sourcing ICT staff transfer to service provider may lead to knowledge and skill loss. The organization assigned with is staff as well as internal know-how. This results in that the organization is not able anymore to source the ICT services back and operate it again internal. (Studer, 2011, Horvath, 2011) 5.4. The Path from Insourcing to Outsourcing In the literature there are various models for the distribution of the outsourcing process. The process varies between four to nine stages. The author agreed on following the Hilal Sahbaz 19 August 2011 55 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd process model, as seen in the Figures 6 based on conducted interviews with Swisscom ICT Specialists as well as Swisscom ICT outsourcing customers (2011), and various literatures. Figure 7: Outsourcing Process Model Source: Author 5.4.1. Evaluation After the organization has decided to outsource its ICT services to external servicer provider, structured management and carefully action is necessary (Power, Desouza and Bonifazi, 2006, p. 14). Hilal Sahbaz 19 August 2011 56 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd The first phase involves not only finding the potential service provider (Schroeder, 2005), but also organization needs to asses the value of its services are to be outsourced and to define its goals and required improvements (Power, Desouza and Bonifazi. 2006, p. 32). First of all, it has to be decided which specific services are to be outsourced. In a further step, these services have to be evaluated and documented. In order to be able to outsource successfully, the organization has to know its operations, processes and services very well (Bischoff, 2011). Therefore, in the first phase it is common to develop an IST-analysis of current situation to define and document the actual processes and services. Following, the Due Diligence will be made of existing assets as well as of the staff, which will be transferred to the external service provider. (Interviews, 2011) Furthermore, this phase also includes preparation of a draft of cooperation with the service provider in form of letter of intent (LOI). Also common is the requirement for use of a suitable management system such as ITIL. These needs are considered in the request of proposal IST-Analysis IST-Analysis assesses the initial situation for the necessary make-or-buy decision, which should precede any outsourcing project. This will also clarify what services can be outsourced at all, without endangering the basic knowledge of the company. For this purpose, each step of the supply chain should be analyzed to determine which of the provided services can be outsourced. To do so requires identifying the necessary capacity for the provision of relevant skills and the sufficient availability of these in the Hilal Sahbaz 19 August 2011 57 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd company. It should further be analyzed whether these skills contribute to building or keeping competitive advantages and thus are among the core competencies (Onpulson, 2011). Request for Proposal After the IST-analysis is implemented, the outcomes will be written down in the form of a Request for Proposal (PFP). This document includes the description of the current situation and the objectives of the outsourcing project. RFP is one of the most important documents in outsourcing process (Söbbing und Wöhlermann, 2005, p. 48 ff).This indicates the extent of currently existing ICT landscape and distinguishes between the operation and the systems to be migrated. After a detailed comparison of the offers is conducted, a decision is made. After such a decision is taken, and following the examination (due diligence process), the actual contract negotiations occur. (Tofighi, 2011) Due Diligence “Due Diligence is the process of investigation by potential parties to an outsourcing agreement. It usually is done after signature of a non-disclosure agreement (NDA) and down-selection of the vendor from a field of perspective service providers” (Outsourcing-Law.com 2011). The implementation of due diligence seeks to overcome or at least reduce general uncertainty about the future development of the framework conditions and unequal allocation of information between the parties (Kranebitter 2002, p. 12). Hilal Sahbaz 19 August 2011 58 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Letter of Intent Further, a Letter of Intent (LOl) can be applied as a form of pre-contract with binding statements in the timeframe between the first organizational communications and the date of the outsourcing agreement. It is generally agreed within the evaluation stage, in order to focus in negotiations and the agreement stage on the legal aspects such as acquisition of staff, the design of service level agreements as well as the financing model (Söbbing and Wöhlermann 2005, p. 48 ff). 5.4.2. Negotiation & Agreement The negotiation and agreement stage begins with the negotiations, which are associated with costs for lawyers and benchmarking institutions. During the negotiations, efforts for the organizational integration of the company at the process level and technical level begin. At the process level the future interfaces between the companies are defined. On the technical level, the integration of ICT systems of the service provider is agreed upon. The agreement stage ends with conclusion of the contract (Schroeder 2005, p 33). Depending on the size of the outsourcing project, several framework agreements can be contracted. The framework agreement is a debt obligation, which regulates the environment for future transactions (Horchler 1996, p 209). Service Level Agreement Furthermore, in the negotiation and agreement stage a service level agreement (SLA) is defined. SLA is a fundamental element of the legal agreement between the Hilal Sahbaz 19 August 2011 59 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd outsourcer and the service provider. SLA expresses specific and concrete performances, which are subject to changes in the framework agreement and are therefore listed in the appendix. Typically, SLA also proposes corrective action and any penalties that will come into force if performance falls below the agreed standard. A well-defined SLA determines expectations for both sides of the relationship and provides targets for precisely evaluating performance to those objectives (Hayes 2004). 5.4.3. Transition After the successful negotiation and conclusion of contract, the transfer of tangible assets and the transition of service provision to service providers take place. A successful management of transition is crucial for the subsequent operational stage. Therefore, it has a strategic importance. The operation begins, once the service provider has transformed the acquired infrastructure, applications and processes. At the beginning of this phase, the whole outsourcing and processes are in the present mode of operation (PMO) (Interviews, 2011). Especially, the SLA plays an important role here. SLA and the cost savings will continuously monitored and reported. Also the change management is important, because the outsourcer’s needs may change constantly. In addition to the normal operation, it is important to conduct a professional project management, and therefore adapted to the new ICT needs (Schroeder, 2005, p. 34). Hilal Sahbaz 19 August 2011 60 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd 5.4.4. Transformation Mostly, the operation systems are transferred into a leveraged environment that allows the service provider to take advantage of the leverage effect (Mazziotta, 2011). This stage is one of the most intensive periods for the service provider. In order to achieve economies of scale operations systems have to be standardized and integrated into existing systems portfolio of the service provider, namely into so called future mode of operation FMO (Schröder, 2205, p. 34; Interview, 2011). 5.5. Common Outsourcing Failures Although these factors give rise to a well-planned, efficient implementation and skilful managed outsourcing initiative, often organization do not recognise the commitment and discipline it requires obtaining outsourcing benefits. Many organizations do not become aware of its impacts. This absence of awareness results in outsourcing activities often to enormous consequences. Eventually, organizations move their failed outsourcing business to another service provider and recur to same mistakes or they source back (Power, Desouza, Bonifazi, 2006, p. 19). 1. Lack of management commitment 2. Minimal knowledge of outsourcing methodologies 3. Lack of an outsourcing communication plan 4. Failure to recognize outsourcing business risk 5. Failure to tap into external sources of knowledge 6. Unrealistic goals Hilal Sahbaz 19 August 2011 61 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd 7. Poor relationship management Lack of management commitment The first failure that leads organization to weak outsourcing relationship is the thinking that outsourcing is a quick solution for core problems bothering their businesses such as cost structures, narrow quality and insufficient staff. The management has to understand the long-term impact of outsourcing to their organization’s overall business strategy in order to formulate an implementing strategy. Otherwise the misunderstanding can result in vague agreements, milestones and deliverables, which will create conflicts between outsourcer and service provider. Since organizations outsource large parts of their business, often executives minimize the objectives, time, cost and resources needed to develop successful outsourcing strategies. A successful outsourcing requires executive engagement and determination to resolve fundamental business problems to developing an outsourcing initiative and passing the problems on to potential service provider (Power, Desouza and Bonifazi, 2006, p. 20ff). Minimal knowledge of outsourcing methodologies Outsourcing is a complex business strategy and many organisations underestimate even fail to admit this. Organisations do not recognise their lack of knowledge of the outsourcing process and management discipline. Only few organisations have staff, processes, procedures and tools that can conduct the business through the outsourcing process, involving strategy design, requests for proposal, provider identification and selection, agreement negotiation, project transition and outsourcing relationship management. To be successful, proven methodology and industry best practices have to be identified, established and implemented (Power, Desouza and Bonifazi, 2006, p. 21). Hilal Sahbaz 19 August 2011 62 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Lack of an outsourcing communications plan Outsourcing rumours can lead to bad influence at all levels of the organisations. Fears and worries can create a negative influence on organisational productivity. Well before starting with outsourcing employee productivity may decreases, lower turnover and low employee morale become pervasive and lack of trust in the organisation lead to poor service and product. To approach these issues carefully, a formal communication plan that expresses the purpose should be created. It should define the organisational processes and how communications will flow throughout the organisation, including the time lines, communication channels and contact persons for questions and issues. It should be attached great importance to address all questions and issues that may arise from the employees as well as from the stakeholders. Furthermore the organisation must be able to communicate findings, such as the details of the outsourcing plan: What will be outsourced, when it will be outsourced and who will be impacted. Failure to recognize outsourcing business risks Next to benefits and competitive advantages outsourcing is a risky position and in some cases a difficult issue as organisation moves its staff, functions and process to external service provider. Doing business is all about managing risk and outsourcing is no exception. To eliminate surprises in the future risk-reduction strategies should be established. Organisations have to consider what happens when the relationship ends and, examine as well as mitigate risks. Failure to tap into external sources of knowledge Hilal Sahbaz 19 August 2011 63 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Another mistake that most organisations do is not recognising the complexity and business impacts of outsourcing and rely on their internal resources to guide the organisation through the outsourcing process. To make the outsourcing initiative successful professional expertise is required. It must be clarified whether the organisation has the seasoned outsourcing expertise. Unrealistic goals Over years the organisations build business processes, methodologies, tools and infrastructures, products and applications, but these are usually not documented and codifying the intellectual know-how. Many organisation do not recognise how complex and difficult is it to transfer this know-how to service provider. Often outsourcers do not spent enough time and effort to document their know-how and transfer it to service provider. They set unrealistic objective for service provider that create conflict and tense the relationship between outsourcer and service provider. Organisation must set realistic goals that makes service provider able to improve quality and reduce costs based on objectives. Poor relationship management Managing the ongoing outsourcing relationship is an important aspect and has to be understood by outsourcing organization. A relationship management plan is the key to conduct the outsourcing relationship. According to Power, Desouza and Bonifazi (2006, p. 29) such a relationship management plan should includes descriptions of the outsourcing efforts, identification of key shareholders, schedule of activities, roles and responsibilities, budgets, performance measurements, work products, resources, required Hilal Sahbaz skills and knowledge, change control 19 August 2011 process, quality assurance, 64 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd configuration management, communication plan and tools, equipment, facilities and security. 5.6. Choosing the right service provider One of the major criteria to outsource successfully is to have the right business partner. During the negotiation phase, the organization face difficulties to choose the right business partner. The service provider has to be selected very carefully. It is essential to be sure that the negotiating service provider has the potential to be a service provider. Not all service providers are equally qualified (Power, Desouza and Bonifazi, 2006, p. 107). There are various criteria to be considered: • Adequate experience and proven success • Best practice processes such as ITIL • Appropriately skilled resources • Integrated leading technologies • Financial performance and backing • Appropriate frameworks for service level management • Continuous improvement in their business • Strong transition experience (People, Tool, Process) • Appropriate motivation to improve your services Hilal Sahbaz 19 August 2011 65 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd 6. Conclusion & Recommendation The study explored that ICT service provider can deliver the specified ICT service equally well or even better than the outsourcing company, by lowering costs and raising flexibility. In addition, latest technology allows the service provider to supply required quality in the most efficient and economical way. As a result, the outsourcing company can focus on its core competencies. However, the advantages are countered by risk factors such as dependency on external service provider, loss of know-how, decrease of flexibility and abuse of confidentiality. In view of this findings, Swisscom Switzerland Ltd can position itself as experienced ICT outsourcing partner while considering the reported challenges, common failures, critical success factors and taking advantage of listed outsourcing motives. A weakness of the study is the unrepresentative survey results. Both interviews with ICT outsourcing specialist and existing outsourcing customer of Swisscom. However, due to unexpected circumstances it was not possible for Swisscom Switzerland Ltd to arrange further interview appointment with its outsourcing customers. It is recommended to approach the white paper for potential ICT outsourcing customer purpose, however a further survey with existing and potential customer will validate and refine the findings. Hilal Sahbaz 19 August 2011 66 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd 7. Bibliography Achermann, D. 2011. Interview with Author on 4 August 2011. Zürich. Altinkemer, K. Chaturvedi, A. and Gulati, R. 1994. “Information systems outsourcing: Issues and evidence”, International Journal Information Management. 14/4: 252-268. Arter, O. and Morscher, L. 2008. ICT-Verträge – Outsourcing. 11. Tagunsband. Bern: Stämpli Verlag AG. Baker, T. and McKenzie, L. 2001. “Global Outsourcing Outsourcing to Canada: Legal and Tax Considerations”. Technology Ececutive Club. Available at: http://www.technologyexecutivesclub.com/Articles/outsourcing/artGlobalOutsour cing.php (Accessed 12 July 2011) Beulen, E. Roos, J. and Ribbers, P. 2011. Managing IT Outsourcing. 2nd ed. Oxon: Routledge. Best Management Practice. 2011. The Structure of ITIL. Available at: http://www.best-managementpractice.com/applicationmanagement_demo/content.aspx?page=am_6&showN av=true&expandNav=true (Accessed 22 July 2011) Bischof, D. 2011. Interview with Author on 15 August 2011. Zofingen. Burtscher, A. 2011. Interview with Author on 4 August 2011. Zürich. Hilal Sahbaz 19 August 2011 67 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Corbett, M. F. 2004. The Outsourcing Revolution. Why It Makes Sense and How To Do It Right. Chicago: Dearbonr Trade Publishing. Gabler Verlag. Gabler Wirtschaftslexikon. Keyword: Outsourcing. Available at : http://wirtschaftslexikon.gabler.de/Definition/outsourcing.html (Accessed 6 July 2011) Government of Victoria. 2006. ICT Standard. ICT Services Management Standard Adoptation of ITIL. Available at: http://www.dtf.vic.gov.au/CA25713E0002EF43/WebObj/ITSMServiceManagem entStandard/$File/ITSM%20Service%20Management%20Standard.pdf (Accessedon 24 July 2011) Gründer, T. 2004. IT-Outsourcing in der Praxis. Strategien, Projektmanagement, Wirtschafltichkeit. Berlin: Erich Schmidt Verlag GmbH. Hayes, I. S. 2011. “Metrics for IT Outsorucing Service Level Agreements”. Clarity Consulting. Available at: http://www.clarity-consulting.com/metrics_article.htm (Accessed 8 August 2011) Heinrich, L. 2002. Informationsmanagement. München: Oldenburg Wissenschaftsverlag GmbH. Horchler, H. 1996. Outsourcing. Eine Analysye der Nutzung und ein Handbuch der Umetzung. – Markt – Recht – Management – Abwicklung – Vertragsgestaltung . Köln: Datakontest-Fachverlag GmbH. Hilal Sahbaz 19 August 2011 68 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Horvath, A. 2011. Interview with Author on 9 August 2011. Winterthur. ITIL Libary.org. 2011. Release Management. Available at: http://www.itlibrary.org/index.php?page=Release_Management (Accessed 22 July 2011) ITIL Official Site. 2011. What is ITIL. Available at: http://www.itil-officialsite.com/AboutITIL/WhatisITIL.aspx (Accessed 22 July 2011) Johanson, B. d.n. In: Research Vits. 2008. “Knowledge Sharing in ICT Outsourcing Relationships”. Available at : http://www.vits.org/publikationer/dokument/346.pdf (Accessed 8 July 2011) Jouanne-diedrich, H. In: Ephorie.de. n.d. “15 Jahre Outsourcing-Forschung: Systematisierung und Lessons Learned”. Available online at: http://www.ephorie.de/pdfs/Informationsmanagement_Outsourcing_von_Jouan ne-Diedrich.pdf (Accessed 8 July 2011) Jouanne-Diedrich, H. In: Ephorie.de. n.d. “Die ephorie.de IT-Sourcing-Map”. Eine Orientierungshilfe im stetig wachsenden Dschungel der Outsourcing-Konzepte. Available at: http://www.ephorie.de/it-sourcing-map.htm (Accessed 22 July 2011) Kranebitter, G. 2002. Due Diligence. Risikoanalyse im Zuge von Unternehmenstransaktionen. München: Verlag Moderne Industrie. Hilal Sahbaz 19 August 2011 69 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Lacity, M. and Willcocks, L. 2003. “IT sourcing reflecitons. Lessons for customers and suppliers”, Wirtschaftsinformatik. 45/2:115-125. Lindt, M. 2011. Interview with Author on 4 August 2011. Zürich. Loh, L. and Venkatraman, N. 1992. “Determinants of information technology outsourcing: A cross-sectional analysis”, Journal of Management Inform Systems. 9/1:7-24. Mazziotta, G. 2011. Interview with Author on 4 August 2011. Zürich. Onpulson. 2009. Outsourcing. Available at http://www.onpulson.de/themen/115/outsourcing/ (Accessed 22 July 2011) Osiatis. 2011. Introduction and Purpose. ITIL- IT Service Management. Change Management. Available at: http://itil.osiatis.es/ITIL_course/it_service_management/change_management/in troduction_and_objectives_change_management/introduction_and_objectives_ change_management.php (Accessed 23 July 2011) Outsourcing-Law. 2011. Due Diligence in Outsourcing. Available at: http://www.outsourcing-law.com/due-diligence-in-outsourcing/ (Accessed 8 August 2011) Power, M. J. Desouza, K. C. and Bonifazi, C. 2006. The Outsourcing Handbook. How Hilal Sahbaz 19 August 2011 70 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd to Implement a Successful Outsourcing Process. London and Philadelpia: Kogan Page. Ruggles, D. 15 March 2007. What is ITIL. Technology Trends & Management Consulting. Blog. Available at: http://druggles.wordpress.com/category/iso-20000/ (Accessed 4 August 2011) Saravanja, M. n.d. ICT Outsourcing – models and experiences. Available at: http://www.ceciis.foi.hr/app/index.php/ceciis/2008/paper/view/110/37 (Accessed 19 July 2011) Schroeder, F. 2005. Erfolg von Outsourcing. Hamburg: Dr. Kovac. Söbbing, T and Wöhlermann, K. 2005. “Rechtliche Fragen im IT-Outsourcing”, Praxis der Wirtschaftsinformatik. Outsourcing HDM 245: Studer, B. 2011. Interview with Author on 4 August 2011. Zürich. Tipton, H. F. and Krause, M. 2008. “ITIL and Security Management Overview”. Information Security System. Available at: http://www.infosectoday.com/Articles/ITIL_and_Security_Management.htm (Accessed 24 July 2011) Tiwana, A. and Keil, M. 2007 “Does Peripheral Knowledge Compleent Control. An Empirical Tes in Technology Outsourcing Alliances”. June 2007. Strategic Management Journal. 28/6: 623-634 Hilal Sahbaz 19 August 2011 71 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd Tofighi, B. 2011. Interview with Author on 4 August 2011. Zürich. TSO. 2000. ITIL 2. Appendix F: Service Support Process Model. Available at: http://www.tso.co.uk/demo/itil2/cd/content/ss/ss_apdx_f_01.htm (Accessed 22 July 2011) Udo, G. 2000. “Using Analytic Hierarchy Process to Analyz the Information Tecnology Outsourcing”, Industrial Management & Data Systems. 100/9: 421-429. Hilal Sahbaz 19 August 2011 72 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd 8. Appendices 8.1. Interview Guideline – ICT Outsourcing Specialists Einleitung 1. Welche Stelle haben Sie in Ihrem Unternehmen 2. Wie viele Kunden betreuen Sie momentan? 3. Wie viele Outsourcing-Projekte haben Sie bisher begleitet? ICT Outsourcing 4. Welche ICT Outsourcing Produkte bieten Sie an? 5. Welche Formen des Outsourcings bieten Sie an? (Totales Outsourcing, Selektives Outsourcing, etc) 6. Sind die Entscheidungen brachenabhängig? Auf Outsourcing-Formen bezogen 7. Aus welchen Branchen sind Ihre Kunden? 8. Welche Branchen bevorzugen welche Outsourcing Formen? (z.B. Finanz, Forschung und Entwicklung, Industrie) Erfolg des Outsourcings 9. Was sind für Sie die Argumente für ICT Outsourcing? 10. Sind diese Argumente auf alle Branchen anwendbar? 11. Können Sie die Argumente nach Wichtigkeitsgrad ordnen? 12. Gibt es Risiken für den Kunden? Falls ja, welche? 13. Wie geht Swisscom mit Risiken um? 14. Woran kann Outsourcing scheitern, bzw. nicht erfolgreich sein? 15. Hat Swisscom einen Massnahmenplan für solche Fälle? 16. Welche Erfolgsfaktoren muss der Kunde erfüllen um erfolgreich outzusourcen? Outsourcing-Prozess Hilal Sahbaz 19 August 2011 73 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd 17. In wie viele Phasen teilen Sie den Outsourcing-Prozess auf? (z.B. Evaluation, Verhandlung und Vereinbarung, Transition) 18. Können Sie diese Phasen erläutern und erklären (Ablauf)? 19. Wie lange dauert ein Outsourcing-Prozess? 20. Wie lange dauern die einzelnen Phasen? 21. Wenn Sie Risiken in den einzelnen Phasen betrachten, welche Gefahren/Risiken bestehen in Welchen Phasen? Konkurenzfähigkeit 22. In welchen Leistungen gibt es am meisten Wettbewerb? 23. Mit welchen Konkurrenten in welchen Bereichen/Leistungen konkurriert Swisscom? 24. Wie/Wo steht Swisscom im internationalen Wettbewerb? 25. Bildet Off-Shoring eine Gefahr für die Wettbewerbsfähigkeit der Swisscom? 8.2. Interview Guideline – Customers of Swisscom Einleitung 1. Name und Sitz Ihres Unternehmens? 2. Branche Ihres Unternehmens? Versicherung 3. Welche Position haben sie in Ihrem Unternehmen? ICT Outsourcing 4. Wann und auf welchen Zeitraum haben Sie den Outsourcing Vertrag abgeschlossen? 5. Welcher Bereich / welche Bereiche der ICT sind outgesourct? (Mehrere Antworten möglich) ¨ Business Service (Payment, Customer Contact Acess): ____________________ ¨ Infrastruktur Services (WAN / LAN): Hilal Sahbaz 19 August 2011 74 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd ____________________ ¨ Kommunikation Services (Voice): ____________________ ¨ Security Service: _______________________ ¨ User Service: Workplace Service 6. Welche Funktionen/Aufgaben sind Kernkompetenzen Ihres Unternehmens? Entscheidungsprozess 7. Was war der Anstoss Outsourcing in Betracht zu ziehen? 8. Was sind die Argumente für Outsourcing? 9. Können Sie diese nach Wichtigkeitsgrad ordnen? 10. Gab es Argumente gegen ICT Outsourcing? Falls ja, welche? 11. Wie würden Sie diese nach Wichtigkeitsgrad ordnen? 12. Mit welcher Methode wurde die Outsourcing-Entscheidung getroffen? ¨ Qualitatives Verfahren (Argumentenbilanz, Checklist) ¨ Quantitatives Verfahren (Kosten vs. Nutzen) 13. Wer war an der Entscheidungsfindung beteiligt? 14. Wie lange haben die verschiedenen Phasen: Evaluation, Entscheidungsfindung, Transition und Transformation gedauert? 15. Bestehen aus Ihrer Sicht Gefahren/Risiken bei einem ICT Outsourcing? Falls ja, welche? 16. Wenn Sie die Risiken in den einzelnen Outsourcing-Phasen betrachten, was für Risiken bestehen in der Evaluation-/ Entscheidungsfindung-/ Transition-/ Transformation-Phase? 17. Welche Voraussetzungen musste Ihre Firma erfüllen um erfolgreich outsourcen? 18. Was waren die Ziele Ihrer Firma im Outsourcing-Projekt? 19. Wie würden Sie den Erfolg des Outsourcing Projekts bewerten? Antwort erläutern. ¨ sehr gut ¨ gut ¨ befriedigend ¨ ausreichend Hilal Sahbaz 19 August 2011 75 of 76 Positioning Strategy of ICT Outsourcing Offer Swisscom (Switzerland) Ltd ¨ mangelhaft ¨ ungenügend 20. Wie wurde der Erfolg gemessen? 21. Was würden Sie aus heutiger Perspektive in den verschiedenen Phasen anders anpacken? Hilal Sahbaz 19 August 2011 76 of 76
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