trends in fs outsourcing & offshoring 2007-2010 · this analysis takes the form of: an overview...

Trends in FS Outsourcing &

Offshoring 2007-2010

September 2010

Version 2.0

©Elix-IRR Partners LLP, 2010

Chapter Page

1. EXECUTIVE SUMMARY 3

2. INTRODUCTION 4

3. WHAT

• Overall Growth in BPO, ITO and KPO Services

• The FS Industry is the Biggest Consumer of Offshore Services

• ITO Trends in FS

• BPO Trends in FS

• KPO Trends in FS

5

6

7-8

9-10

11-12

4. HOW

• Operating Model

• Operating Model for ITO

• ‘Invisible’ Sourcing – Software Houses in ADM

• Operating Model for BPO

• Operating Model for KPO

• Captives in India

• Future Trends

13

14

15

16

17

18

19

5. WHERE

• Growth in Major Offshore Geographies

• The Rise of Nearshoring

• Emerging & Niche Delivery Centres

• Future Trends

20

21

22

23

5. WHO

• Selection of Key Activities by Institution

• Deal Profiles

• Future Trends

24

25-31

32

6. APPENDIX

• Further Information Available Upon Request

• Contact Us

34

35

Index

2 © Elix-IRR Partners LLP, 2010

EXECUTIVE SUMMARY: Outsourcing Trends in the FS Industry

3

The FS industry is

the largest user of

offshore services and

usage continues to

grow

Operating model

diversification

continues but overall

trend away from

captives

Increased location

diversification,

especially to

nearshore

For FS, India is still the dominant destination, particularly for ITO services, however,

Eastern Europe has become increasingly prevalent for ITO and BPO

Significant increase in use of nearshore sites in US (Florida, Carolina, Texas) and UK (N.

Ireland, Scotland) for processes considered high value or high risk in the BPO and ITO

space, or where data protection regulation prevents full offshoring

Emerging offshore centres in China, SE Asia, S America and Africa expected to play

more significant role in next 3-5 years as arbitrage is eroded by inflation for traditional sites

© Elix-IRR Partners LLP, 2010 Sources: Elix-IRR analysis, DataMonitor 2010, TPI 2009., press releases

Financial Services (FS) accounts for almost a third of all offshore services,

outsourced and captive

ITO and BPO still represent the bulk of the outsourcing activity, but the frequency and

awareness of KPO opportunities within FS companies is growing

While overall offshoring and outsourcing has continued to grow, BPO outsourcing has

faltered in last 2-3 years – for example, Financial services companies put more BPO

deals on hold in 2009 than any other sector (Morrison Foerster, 2010)

Average size of outsourcing transactions has declined in last 3 years

Most FS companies now maintain a ‘multi-sourcing’ approach to ITO and BPO

Existing captive centres continue to be exploited by those that have kept them but

several high profile examples of banks exiting the captive market (Citi, UBS)

Few new captives expected – FS companies preferring to outsource or co-develop

Centres of Excellence (CoE) with 3rd parties (e.g. Barcap in Kiev)

Noticeable examples of banks in-sourcing tasks in both BPO and ITO space – DB from

HCL, Barclays from Accenture - point to continued dissatisfaction with outsourcing services

This analysis takes the form of: An overview of the trends in outsourcing and offshoring by major financial

institutions in the last 3 years, covering the following dimensions

What (functions outsourced / offshored) How (form of offshoring and outsourcing) Where (popular and emerging locations for delivery) Who (summary of major outsourcing transactions by major Financial

Services (FS) players and outsourcers)

Supporting data for the current outsourcing landscape for the FS Industry

Introduction


-

50.0

100.0

150.0

200.0

250.0

300.0

2007 2010 E

KPO (58% CAGR)

ITO (10% CAGR)

BPO (29% CAGR)

26%

CAGR

Source: Elix-IRR analysis of OECD, Gartner and BCG data2008--2009

WHAT: Overall Growth in BPO, ITO and KPO services

FS companies have continued to outsource and offshore throughout the downturn though

at a slower rate than in previous years, mirroring the broader outsourcing market

The IDC reports that outsourced offshoring

generated $260 billion in revenues and had

grown by 25% during 2007-09

However, most activity has been an extension of

existing deals or services – relatively few major

new transactions

Datamonitor reports that the value of new

offshoring deals signed in the last quarter of

2008 fell by 38%, when compared to the

previous year

NASSCOM, the Indian software association,

revised offshoring growth downwards for the

2009 period

$B

Growth in Offshore Services, 2007-2010E


WHAT: The FS Industry is the Biggest Consumer of Offshore Services

Offshore Services Consumption, 2009

Offshoring Activity Survey of FS Institutions

Financial Services, 32%

Manufacturing, 20% Telecoms, 12%

Energy, 11%

Travel & Transport,

7%

Retail, 5%

Pharmaceutical & Healthcare, 5%

Business Services, 5% Media &

Entertainment, 3%

Combination of Back Office, IT and/or Other,

38%

Not aware of any, 26%

Back Office (HR, F&A,

Procurement etc), 15%

IT (Infrastructure,

ADM), 13%

Other (inc. KPO), 8%

Source: CGGC Study, 2010

Source: Deloitte study on financial institutions, 2008

FS accounts for almost a third of all offshore services,

outsourced and captive

Over 75% of FS institutions are outsourcing

almost 40% of FS institutions are outsourcing

across multiple domains

the remaining 25% of FS institutions not

outsourcing are predominantly niche players in

private banking and insurance

ITO and BPO still represent the bulk of the activity but

the frequency and awareness of Knowledge Process

Outsourcing opportunities within Financial Services

companies is now significant (8% of respondents to the

Deloitte study)


Demand for IT outsourcing and offshoring has remained strong and is

growing for the FS industry across all major Western European

markets

e.g. JP Morgan increased outsourcing to India by 25% to

$400mil p.a.

Barclays – creation of IT CoE in Kiev, Ukraine

Use of nearshore locations has increased for higher value IT tasks

Growth of IT delivery centres in low cost US locations e.g.

Texas, Florida and Virginia

Citi – expansion of Belfast (N. Ireland) delivery centre

Basic services such as call centre and remote infrastructure

management offshoring are reaching saturation

High level of vendor consolidation to top tier Indian players by FS

institutions in order to:

Reduce costs by leveraging scale while maintaining service

quality

Mitigate risk / exposure to small vendors

e.g. Citi RightSourcing preferred vendor program

ITO remains a key cost lever for FS but consolidation and optimisation has driven much of

recent activity

WHAT: ITO Trends in Financial Services

Change in the use of nearshore and offshore

capability for the FS Sector, 2009

Source: Equa Terra – Trends in FS Industry across W. Europe, 2009

ADM

End User Mgt

Infrastructure


WHAT: Future Trends in ITO

Infrastructure: Cloud computing as next wave of Infrastructure sourcing – removing

the assets from the institutions

ADM: Moving up the value chain for AD – Business requirements definition and

design offshoring and outsourcing

Service Management: New standards and service models for ITO where current

models are perceived as failing

© Elix-IRR Partners LLP, 2010 8

WHAT: BPO Trends in Financial Services

*Note: % of respondents in the survey who outsource some or all of this function

Source: BPO Trends in FS Industry, Equaterra 2008

Overall BPO slowed in the FS sector, but new opportunities in FS specific process

offshoring are catching up with the more traditional BPO functions

BPO Adoption* by Functional Area in FS

60%

50%

38% 36%

4%

Industry-wide, post 2008 the market for offshoring BPO has

struggled. For 2009, the BPO market’s total contract value

fell 38% to $18.5 bn, its lowest level since 2001 (TPI, 2009)

Financial services companies put more BPO deals on hold

in 2009 than any other sector (Morrison Foerster, 2010)

However, growth is forecast to resume from 2010 onwards -

the BPO market is forecast to hit $450bn by 2012 (Nelson-

Hall,2009)

As organisational confidence grows ‘higher value’ functions

are increasingly being considered for outsourcing /

offshoring (Everest), e.g.

Performance management for HRO

Management reporting and analysis for F&A

FS specific processes were increasingly targeted as an

offshoring opportunity by major players across this period


WHAT: Future Trends in BPO

BPO - FS Specific

Expansion into Front & Middle Office functions

Commercialising Back Office processing engines – major banks as service providers

Move back onshore for failing functions – potentially some institutional client service

BPO – Generic

Procurement outsourcing growth - separation of Strategic Sourcing and Fulfilment functions

Accessing improved ERP system capabilities in the marketplace

F&A - management reporting and analysis


WHAT: KPO Trends in Financial Services The Research, Analytics and Market Data Management market is still immature but this

immaturity presents growth opportunities for FS companies

India KPO Market

0

50

100

150

200

250

300

0

2

4

6

8

10

12

2006-07 2007-08 2008-09 2009-10 2010-11

KPO Export

Total FTE's Employed

Bank/In-House Research

Department

Traditional BPO Firm with

Expansion to KPO Professional KPO Firm

Goldman Sachs Progeon Evalueserve

Morgan Stanley Genpact Amba Research

JP Morgan WNS Irevna

UBS Nipuna Copal Partners

Deutsche Bank Office Tiger Aranca

SAP EXL Lexadigm

GE Wipro IP Pro

Intellevate Accenture Roc Search

IBM Mphasis Market Rx

DataMonitor Infosvs Inductis

Whilst KPO is still a high growth and diversifying industry

area, we believe that most industry predictions from

2008-2009 will be revised down significantly

The majority of large capital markets banks have

established either a captive or outsourced capability for

some basic research functions

Competition has intensified in this sector as niche

players have been increasingly challenged by the major

BPO providers who are growing or acquiring KPO

capabilities

e.g. Cognizant bought out UBS’ captive as part of a

wider delivery centre acquisition

India has been the most common destination for KPO

services but increasingly Philippines, China, Ireland and

Mexico are emerging as alternative destinations

Citi – Expanding KPO operations in Philippines by

30% (2009)

Credit Suisse captive services in Poland (Wroclaw)


WHAT: Future Trends in KPO

Diversification of research services - Product structuring, end-to-end research

production

Growth of legal offshoring for FS

KPO is BPO - most KPO processes become integrated into wider BPO capabilities,

not viewed as distinct discipline

Major BPO outsourcers cannibalise KPO specialists


HOW: Operating Model Major activity

areas

Managed

Service

Labour

Augmentation

Out -Tasking Captives Dedicated

Service

Centre

Transformational

Outsource

Commercialise

Assets

BPO

ITO

BPO

KPO

NOTE: This picture is oversimplified – many banks straddle multiple operating models

Prevalent FS Sourcing Operating Models

‘More of the Same’ - Outsourcing and offshoring growth 2008-10 has been along more

mature / considered lower-risk models. Most major players maintain a ‘mixed portfolio’ of

operating models in ITO / BPO


Major activity

areas HOW: Operating Model for ITO


Managed Service Labour

Augmentation


Service Centre

Transformational

Outsource

Commercialise

Assets

DB

As the most mature area of

outsourcing and offshoring, ITO

demonstrates the broadest spectrum

of operating models

Most major institutions operate a

mixed portfolio of strategies across

ADM and Infrastructure, including:

Captive

Dedicated / co-managed

Managed service

Full service outsourcing is most

prevalent in infrastructure services

ADM services are still perceived as

core in banking sectors especially and

retained on a more task or FTE-

governed basis

High level of consolidation to major

vendors

Invisible outsourcing to software

houses (see next slide)

Significant consolidation to

major Indian players such

as Wipro, Infosys, TCS,

Cognizant

Some banks also taking

functions back in house

from outsourcers – e.g.

Barcap

UBS and Citi have both sold

Indian IT Delivery Centres to

Indian Outsourcers

As Indian players try to expand

into the West, we also see some

sale of assets in Europe – e.g.

Citi data centre in Dusseldorf to

Wipro

Most of the large banks

who developed captive

centres in the last decade

have been increasing the

scope of these centres to

improve onshore / offshore

ratios– e.g. Deutsche Bank,

Credit Suisse


Use of 3rd party software houses to develop and

support own product – for trading platforms and

specialised products it is more difficult to source

staff on the open market or via basic outsource

providers

Leads to creep in discretionary software spend

(disguised in the short term by amortisation)

IT divisions are unable to develop in-house

capabilities due to lead times and investment

requirements

Typical vendors for Capital Markets banks would

include:

FS-specific packaged software vendors

(MiSys, SunGard)

Specialist CMB platforms (e.g. Igefi, ION

Trading)

ERP giants: Oracle, SAP

FS IT divisions have been set

aggressive overall headcount

reductions over the last 2-3 years

Increased scrutiny of IT consulting and

development spend

Tighter procurement controls

Focus on short term cost reductions vs.

Long term capability development

Perceived risk of giving

bespoke/specialist software products to

generic outsourcers

Cause Effect

HOW: ‘Invisible’ Sourcing – Software Houses in ADM In response to pressures on headcount and IT development budgets, IT divisions are relying

increasingly on development and support services by 3rd party software houses


HOW: Operating Model for BPO


Labour

Augmentation


Service Centre

Transformational

Outsource

Commercialise

Assets

Few examples of ground breaking

changes in the BPO space 2008-10;

FS institutions have, as with ITO,

continued to leverage existing models

in trusted locations

Those who already have offshore

delivery centres have been able to

leverage those investments e.g.

Citi has added Procurement / P2P

functions to its offshore F&A centre

in Eastern Europe

SocGen have increased the scope

of their HRO in India

Back office processes for capital

markets remain dominated by captive

centre solutions

Multi-national banks are looking to

leverage their investments in

processing platforms by selling

services to smaller players and hedge

funds / asset managers

Capital Markets back office

processing is still mainly

done by captives

Deutsche Bank has started

to shift some activities back

from HCL to its own

delivery centre (DBOI) to

realise process efficiencies

and improved service

FAO

HRO

CMB

Procurement

FS Specific

Deutsche Bank remain

unusual in the BPO

space having outsourced

the majority of its

procurement to

Accenture. Other players

have predominantly gone

the captive route

Majority of banks have

achieved basic offshoring of

their HR and F&A functions –

for example Citi has extended

the scope of its Eastern Europe

site to take on the majority of

basic accounting activities

Full outsourcing of FS specific

processes is mainly confined to

retail and insurance industries

Managed Service

Major activity

areas


HOW: Operating Model for KPO


Labour

Augmentation


Service Centre

Transformational

Outsource

Commercialise

Assets

KPO is the smallest and least mature

area of outsourcing but is growing in

popularity as banks try to reduce the

cost of their research functions in an

effort to reduce cost to service clients

UBS has led the way in building an

offshore analytics function in its Indian

delivery centre but has since spun the

function off to Cognizant

Small outsourcers have gradually

been acquired by larger players such

as Cognizant, TCS and GenPact

Given the nature of these functions

there is little immediate appetite for

outsourcing anything more than basic

tasks; ‘judgement-based tasks’ remain

largely onshore with high cost analyst

resources

Given perceived high

value nature of

processes involved, it is

unlikely banks will full

outsource research

services as this is seen

as a differentiator

Research and

Analytics

Market Data

`cv

Managed Service

Growing area for capital

markets banks for

provision of basic

investor research to

support analysts, and

also management of

market data services

(library management,

admin, subscriptions)

KPO has ‘jumped’ a

development stage – as the

FTE counts involved are

typically small, FS institutions

have tended to either add into

their existing captive centres

or go directly to outsource

model

Major activity

areas


HOW: Captives in India

Source: Evalueserve – Captives in India, 2009

Captive centres continue to come

under pressure from large-scale

outsourcers, particularly the Tier 1

Indian players

Both Citi and UBS have disposed of

significant captive assets in the last 3

years

However, as the figure shows, many

companies have continued to

leverage their existing captive centres;

as a cost-effective method to

increase offshoring with low

investment (Deutsche Bank)

to retain control on higher value

functions (Citi)

to enable the realisation of process

efficiencies in onshore / offshore

handoffs (BNP Paribas, Deutsche

Bank )

The longevity and effectiveness of the captive offshore centre model continues to generate debate

Operations in Indian Captive Delivery Centres (2007-09)

IT; most mature area of outsourcing therefore least change. Even so, more

roles have been pushed into existing captives e.g. Deutsche Bank

BPO; activity least consistent – some banks have decided that outsourcers

are more cost effective (e.g. Morgan Stanley HRO to Hewitt) but those with

significant offshore delivery have increased offshore ratios (e.g. Citi F&A

and Procurement in Hungary)

KPO as the newest offering has shown most growth in captive services;

Nervousness about outsourcing skills previously seen as core so

have opted for building captives (e.g. Citi)

Poor outsourced service quality (e.g. Credit Suisse now manage

Irevna directly)


HOW: Future Trends

Future of ‘captive’ and dedicated service centre models uncertain but overall likely to

decrease (i.e. Few expected ‘new’ captives)

Trend to exit of captives/co-branding in IT

Commercialisation of Back Office processing captives for the large banks

Continued lack of convergence on single strategy

Service Management capability as a differentiator

For FS Back Office processing (onshore / offshore integration and streamlining)

For IT (multi vendor management for value)


WHERE: Growth in Major Offshore Geographies

Growth in outsourcing revenues ($B 2008-10)

Sources: Everest (10), KPMG (09), NASSCOM (09), McKinsey (08)

2 2.7

4.2

2008 2009 2010E

11 15 21

2008 2009 2010E

6.1 7

11

2008 2009 2010E

5.5 6.3 7.1

2008 2009 2010E

India

E. Europe

Philippines

China

Major outsourcing centres have

continued to grow over the last 3 years

For FS, India is still the dominant

destination, particularly for ITO services

However E. Europe has become

increasingly prevalent,

Basic BPO (F&A – Citi,

Procurement – Deutsche Bank,

Citi)

ITO – BarCap new CoE in Kiev,

Ukraine

Philippines is increasingly popular for

front line support, especially in SE Asia

due to strong English language

capabilities relative to India or China and

low labour cost

China is comparatively unexploited by

FS – whilst most major banks have

some offshoring there, this is largely

confined to the support of Asian

business units (e.g. Hong Kong)

45%

CAGR

38%

CAGR

14%

CAGR

34%

CAGR


New Jersey – multiple

Colorado – Wells Fargo

Florida – Citi, Deutsche Bank

Texas - Amex

Canada - Citi, Deutsche Bank, Morgan

Stanley

Belfast (N. Ireland) - Citi

Dublin (ROI) - multiple

Edinburgh – RBS, HBOS

Derby – Citi

Birmingham – Deutsche Bank

Newcastle – Tesco Bank

WHERE: The Rise of Nearshoring

Secondary locations in home countries or locations in nearby countries with lower labour

and real estate costs

USA

UK

Nearshore site examples

To maintain service quality and proximity of

management for ‘higher touch’ or sensitive services

and processes benefitting from:

Language

Culture

Lower knowledge transfer costs and attrition

rates

Easy to ‘parachute in’ management

Citi has invested significantly in its Belfast centre to

take advantage of significant UK government

subsidies provided, temporarily putting arbitrage on

a par with medium cost offshore sites such as

Prague

Major Indian vendors are now trying to enter this

space, buying data centres and other sites in W.

Europe and US – the objective is to compete on

service with major outsourcers such as IBM,

Accenture and HP

Rationale


WHERE: Emerging & Niche Delivery Centres

South America

Mexico, Costa Rica, Panama: Popular for BPO and also call centres for Spanish

language services

Chile, Colombia, Argentina; Spanish-language services to US and Spain (e.g. Citi

Delivery Centre in Colombia) - Chile in particular is viewed as a stable environment

without the hyperinflation issues previously seen in Argentina and Brazil

Uruguay – niche BPO provider for the banking industry in Montevideo

Brazil: Growing as an IT service provider, particularly Curitiba (‘Silicon Valley of

South America’) but the majority of services are still consumed by the domestic

market due to language issues

Africa and Middle East

South Africa is popular for BPO from the UK due to language and time zone (e.g.

Morgan Stanley asset management). Seen as the FS centre for Africa but has infra-

structure and security concerns

Egypt is the leading emerging outsourcing provider in Northern Africa

Morocco, Tunisia and Algeria are developing language specific offshoring capabilities

for the French market, largely in the contact centre space – (e.g. SocGen, BNPP)

Jordan has grown as an offshore centre for Middle Eastern / Arabic businesses – solid

ITO capabilities though limited talent pool and language constraints


WHERE: Future Trends

Nearshore growth (e.g. US/UK Tier 2 locations) to continue

Rise of emerging locations such in SE Asia (Vietnam, Indonesia) and N. Africa

(Egypt)as lower cost alternative to India and E. Europe

‘Double’ offshoring – Indian centres to offshore own operations to lower cost

centers


WHO: Selection of Key Activities by Institution

Sale of Indian Service Centre to Cognizant

Consolidation of ADM to major Indian players

Sale of Indian IT captive (2008) and German data centre (2010, in

progress) to Wipro, Sale of BPO captive to TCS (2008)

Continued offshoring of F&A and Procurement to its Budapest delivery

centre

Renegotiation of 7 year deal with IBM for infrastructure services

(mainframe, midrange)

Integration of infrastructure outsourcing deals for MS and Smith Barney

merger

Global Managed Service outsourcing of Networks to Verizon (2009)

Aggressive offshoring of Equities trade processing functions to India

Some outsourced BPO processes brought back in-house (from HCL

service to DB captive in India) to improve service and efficiency

Transformational infrastructure outsource with Microsoft and HP to

leverage cloud computing capabilities and drive down costs (first for FS

industry)


WHO: Deal Profiles Index

1. UBS-Cognizant sale of Indian Service Centre

2. Morgan Stanley infrastructure deal with IBM

3. Citi Indian BPO captive sale to TCS

4. American Express cloud computing deal

5. Zurich Financial Services Infrastructure outsource

6. Barclay’s exit of Accenture ADM contract


WHO: UBS-Cognizant Sale of Indian Service Centre

UBS disposed of its Indian Service Centre to Cognizant

Services include ITO (remote infrastructure management), BPO (Wealth Management and Asset Management back office processes), and KPO (research and analytics for the Investment Bank – c. 50FTEs)

Stated objectives of UBS are to :

Reduce time-to-market

Expand service delivery

Enhance productivity, operational efficiency and quality

2,000 FTEs

Multi-Year

ITO, BPO, KPO

Dedicated service centre operated by outsourcer

Company Summary

Scope

Location Provider

Hyderabad, India


WHO: Morgan Stanley Infrastructure Deal With IBM

IBM provide utility infrastructure services to Morgan Stanley’s Individual Investor Group and Discover Financial Services.

Deal is a renegotiation of 2004 contract

IT services are provided by grid computing from IBM’s data centres on an ‘on demand‘ pricing model providing MS with greater flexibility as consumption changes

Applications previously run on mainframes will now be provided on a grid computing basis, and is paid for on a usage basis which MS claims will save $millions p.a.

IBM have also been selected to help MS integrate the IT infrastructure of the Smith Barney business recently acquired from Citigroup

2,000 FTEs

$575m contract value (est.)

5 year extension

ITO and helpdesk

Managed Service

Company Summary

Scope

Location Provider Various (IBM datacentres) inc.

UK

USA


WHO: Citi BPO Captive Sale to TCS

Citi sale of their BPO subsidiary, Citi Global Services Limited (CGSL), based in Mumbai

Includes multiple FS specific processes across Citi’s retail and capital markets businesses

One of the largest captive offshore centres in existence at over 12,000 FTEs

Citi released $500m in cash to help its balance sheet and capital ratios

Citi has committed to at least $2.5bn in revenues over 10 years –revenues at time of sale were c.$280m per year

Continuation of Citi’s strategy to divest captives – previously sold CGIS IT India delivery centre to Wipro

12,000 FTEs

$2.5bn contract value (est.), TCS paid $505m for the CGSL business

10 year contract (2008-2018)

FS specific BPO

Dedicated service centre

Company Summary

Scope

Location Provider

India - Mumbai


WHO: American Express Cloud Computing Deal

HP EDS is managing the American Express end-user desktop computing environment and its global voice and data networks

EDS will provide on-site services for about 60,000 employees in more than 130 countries

In addition, HP and American Express have partnered with Microsoft to deliver cloud computing technologies for Amex - Microsoft’s Business Productivity Online Services - which could revolutionise how infrastructure services are consumed and charged for and dramatically reduce costs.

This will also serve as the test case for many FS institutions nervous about security and reliability issues associated with the new technology

$125m contract value

5 year deal (2009-2014)

Infrastructure services, including cloud computing services

Transformational outsourcing

Company Summary

Scope

Location Provider

Global – 130 countries

Remote management services will be from EDS’ offshore centres


WHO: Zurich Financial Services to CSC

CSC provide data centre and IT infrastructure managed services to Zurich Financial Services (ZFS).

CSC support ZFS’s global service desk, local on-site support and software packaging.

Relationship between ZFS and CSC dates back to 2004.

The contract is designed to transform ZFS's existing data centre environment into a fully modernised, flexible and highly virtualized operation.

Depending on the country specific agreements entered into, up to 1,000 ZFS employees will potentially move to CSC during the first half of 2010.

1,000 FTEs

$2.9bn contract value (est.)

11 year contract (2009-2020)

ITO, Infrastructure

Managed Service

Company Summary

Scope

Location Provider

Various - CSC will cover the group’s IT operations in the UK, US, Canada, Switzerland, Germany, Italy and Spain.


WHO: Barclays and Accenture (Non Renewal of Deal)

Barclays opted against the renewal of their existing AD outsourcing deal with Accenture.

Barclays have decided to bring several outsourced functions back in-house recently

Ended outsourcing deals with EDS and Siemens in 2006 & 2008 respectively

Ended Getronics desktop support contract in 2009

Barclays looking to improve resource flexibility and lower costs associated with developing and maintaining software applications.

Accenture still being used by Barclays as they continue to provide consulting and IT solution services.

230 FTEs

£400m contract value (est.)

6 year contract terminated (2004-2010)

ITO, Application Development

Captive – insourcing of outsourced service

Company Summary

Scope

Location Provider (terminated)

Global – onshore and offshore delivery resources


WHO: Future Trends

Indian players (Wipro, TCS, Infosys, Cognizant etc) to become global players to

challenge established players such as Accenture, IBM, HP

Niche outsourcers (e.g. KPO) to be subsumed into scale players


APPENDIX


Further Information Available Upon Request

Below is a screenshot example of our detailed report on outsourcing and offshoring

transactions available upon request:

Sources: DataMonitor Knowledge Center, 2010, Press search, BusinessWeek, Elix-IRR client experience, Pillsbury Global Sourcing client experience


For interest in viewing this additional report, please contact us at: [email protected]

Contact Us


For further information on the research, please contact the following persons at Elix-IRR:

• Stephen Newton

Partner

Tel: +44 (0) 208 123 5867

Email: [email protected]

• Anthony Potter

Principal

Tel: +44 (0) 208 1231687

Email: [email protected]

Elix-IRR is a Sourcing Advisory and consulting firm, with offices in London and New York, focused on providing

business support through the entire sourcing lifecycle for large-scale outsourcing and other complex sourcing

transactions. Elix-IRR combines technical, operational and supply-chain capabilities, supplemented by extensive

outsourcing advisory operational experience across all aspects of the sourcing process. With deep experience in the

buy-side, sell-side, legal and advisory aspects of sourcing initiatives we provide high-impact services to FTSE 100/

Fortune 500 and middle-market clients across the complex strategic sourcing landscape and guide our clients in making

the right supplier choices.

mailto:[email protected]






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