DAY 3/ Power Breakfast

Strategic Outsourcing in the changed scenario

The round table discussion revolved around 'Strategic outsourcing in the changed scenario' which was initiated by IBM and an interactive session having about 20 CIOs seeking insights into the subject

Rahul Agarwal, client solutions executive, IBM India initiated the discussion with the question of how to maximize IT investment and spend which is scaling up.

The industry scenario reflects as Agarwal pointed that about 30% spend is towards new capabilities, while 70% is spent on running and maintaining existing infrastructure.

To one of the questions from CIOs, as how outsourcing could help, Agarwal reiterated that outsourcing activity would streamline 70% of the money spent in a more judicious manner and also drive savings in the new solutions where 30% is spent.

“The typical range of savings on the first instance that one could see would be to the tune of 17% through outsourcing,” said Agarwal.

All the CIOs agreed that the IT is measured by the innovative business services it enabled, and it needs to be leveraged as a multiplier to enable greater business value.

Agarwal averred that the outsourcing of business processes, applications and infrastructure resulted in the optimization of three integrated delivery streams such as revenue, process and information technology.

In a dynamic infrastructure, business process outsourcing, applications outsourcing, IT outsourcing becomes critical.

From the savings point of view, Agarwal pointed outsourcing could drive 10 to 30% savings depending on the existing technology mix in the physical server consolidation space, about 20-50% saving in the data center consolidation depending upon on existing space utilization.

“The CIOs could easily witness 10-25% in desktop and email, 15-40% in the network environment depending upon the network complexity, 30-40% in the application rationalization and optimization depending upon application overlap, while 25-50% in the storage optimization and virtualization depending on existing technology, management processes and data access requirements,” pointed Agarwal. Responding to the core concerns of the CIOs as to factors to be considered before outsourcing, Agarwal maintained that focus on the core strategy, process infusion, topline growth complications, risk transference, operational efficiencies, service quality and stability, business enablement, skills access, gain scale economies, IT budget-re-alignment, capital to expense model transition and alignment with the business growth.