selling complex services: bpo and ito version 2.0 rwp, aa 06-13-03

Selling Complex Services: BPO and ITOSelling Complex Services: BPO and ITO

Version 2.0

RWP, AA

06-13-03


LAW’s Strategic Objectives for 2003

• Outsourcing: Continue double-digit growth in BPO

• Infrastructure: Drive growth in design/build/ manage secure distributed infrastructure

• SI/Consulting: Continue margin improvement• Server Technology: Expand market for ES7000• Branding: Build market awareness of Unisys• Ongoing: Maintain tight cost controls


Course Objectives• Define outsourcing from the market point of view and link the Unisys

definition of Information Technology and Business Process Outsourcing (ITO/BPO)

• Identify the business drivers that lead to an outsourcing opportunity

• Identify the Business drivers of “C” level executives that lead to business initiatives and expanded business opportunities.

• Identify the capabilities, strengths & weaknesses of an organization’s ability to change

• Determine the current business performance, and the gap between the current and desired state

• Identify the ITO and BPO services Unisys provides that are required for the client to achieve their performance goals and objectives

• Create a executive level presentation that restates the value Unisys provided to the client’s business


Key Learnings

• You will learn about . . . •The outsourcing opportunity that exists for Unisys

•The size of, and scope of a typical outsourcing sale

•The account control outsourcing provides


Course Activities

• Guide a sales team through three executive meetings

• Complete a TAS opportunity plan

• Identify the complex services a client requires to meet their business objectives

• Build an outsourcing services strategy for the client

• Build the sales approach for that opportunity


SCS BPO and ITO: Schedule Day 1 (8:30-5:00)

Welcome & Module 1 Module 2: Business Drivers Module 3: Current Environment Evening Reading Assignment,

Module 5: Filling the Gap

Day 2 (8:30-5:00)

Module 4: Mapping Out a Sourcing Strategy Module 5: Filling the Gap Prepare Analyst Questions (30 mins) Q&A with Industry Analyst (30 - 45 mins) Module 6: Selling the Solution Module 7: Value Tracking and Feedback


Materials

• Participant’s Guide

• Case Study

• Simulation

• Companion Text: Strategic Outsourcing: Exploiting the Skills of Third Partiesby Ian Benn with Jill Pearcy


Housekeeping

• Phones & Pagers

• Start Times

• Breakout Rooms

• Breaks & Lunches

• Smoking Area/Rest Rooms

• Issues Parking Lot


MODULE 1:

Introduction


Module 1: Introduction

1) Charles Gerhards, Deputy Secretary and CIOGovernor’s Office of Administration

2) Jim Tinney, Director of the Commonwealth Technology Center


Market Trends & Business Demands

Driving Business Strategies Through Sourcing Strategies:

• More Effective Delivery of Services

• Improved Overall Business Performance

• Cost Predictability and Efficiencies

• Improved Customer Loyalty

• Increased Market Share

• Improved Shareholder Value


Barriers to Success

Outsourcing Reasons

• Improve company focus

• Reduce & Control operating costs• Make Capital Funds Available• Cash Infusion

• Gain access to world class capabilities• Free up internal resources• Resources not available internally

• Accelerate re-engineering benefits• Function difficult to manage

• Share risks

Barriers

Strategic

Financial

Resource

Performance

Risk

FIVECATEGORIES


Sourcing Strategies Meeting Business Demands

IT Efficiency

Business Outcomes

MANAGEMENT

OPTIMIZATION CREATION

ACCESS

Delivery

Exploit knowledge and human capital to maximize market share

Deploy and apply resources and processes to maximize return on

assets

Connect knowledge and relationships in virtual markets to

maximize return on equity

Procure functionality tomaximize operating income

Value

Shared Environment

Enterprise Environment


ExecutiveInvolvement

Senior Executive Involvement

Business Cycle

Sales Cycle

Vendor Jail

RFP

Time


“Vendor Jail”

Sales Cycle

RFP

Third Parties Competitors


Know Who the Key BPO Influencers Are

Cross-Functional Procurement Team

Initial Decision to Outsource

Vendor Selection Final Sign-Off

Chief-Level Officer/COO

12% 8% 10%

Function Head 9% 29% 10%

CIO 2% 3% 5%

14%0% 8%

3%11%0%Procurement

CFO 33% 14% 27%

CEO 30% 5% 29%

Vice President of Business Unit 16% 8%14%

125 respondents Source: Gartner


Blended e-Learning GO Sales Solution

Selling Complex Services

Online Assessment & Tests

Instructor Led Training with

Computer Simulation

WEB Cast Archives (Placeware)

GO & Global Sales WEB Site Links, Manuals & Guides &

SimulationArchived

portfolio WEB Casts

Panel of GO Sr. Mgmt reviewing

opportunity success

WEB Based, Self-DirectedWEB

Based, Self-

Directed

Instructor Led

Classroom

GO Executive

Led

Selling Complex Services

Selling Complex Services Coaching /

Mentoring / Post work

Outsourcing Presentations

PASS


Implement and Manage

Life Cycle of Business Change

UNDER CONSTRUCTIONgoals

objectives

desired performance

level

gap

current performance

level

solution phase:

desired performance

level

evaluate & adjust

implement & change

Current:PeopleProcessesInfrastructureResources

Conceptualize

Assessment

Requirements

Design

LOI

Due Diligence

SOW

Contract


What Are Your Top 5 Benefits?

1. Increase client’s loyalty to buy more from Unisys.

2. Create greater value for your clients.

3. Increase client’s perceptions of you as a “Trusted Advisor”.

4. Increase knowledge of customers business and the issues driving their decisions.

5. Increase your “Cross Selling” capability and thereby increase your total sales.


“Building a framework for a trust-based

relationship is the most powerful way of

ensuring the long-term success of a

strategically important outsourcing deal.”

The Trusted Advisor Role

“Trust and Control: The Key to Optimal Outsourcing Relationships” Gartner, April, 2003Roger Cox, Ian MarriottStrategic Analysis Report


10 Key Components of Trustin an Outsourcing Deal


Trust: Three Key Learnings

• Most major deal failures are due to a breakdown in the overall relationship between a business and its outsourcing provider.

• Successful outsourcing relies on a range of contacts and interfaces between the service recipient and service provider that go beyond the day-to-day delivery of services specified in contract schedules.

• outsourcing deals are less likely to be based on buying specified services, and more likely based on buying a relationship


Introductions

• Name

• Market / Accounts

• Services Sales Experience

• Expectations


MODULE 2:

Business Drivers


Module 2: Business Drivers

1) Curt Haines, Director, Bureau of ConsolidatedComputer Services, Governor’s Office of

Administration2) Martin Horn, Former Secretary of Administration


1. Define outsourcing from the market point of view and link the Unisys definition of Information Technology and Business Process Outsourcing (ITO/BPO).

2. Identify the business drivers that lead to an outsourcing opportunity.

3. Identify the Business Drivers of “C” level executives that lead to outsourcing initiatives and expanded business opportunities.

Module 2: Business Drivers

Objectives:


Outsourcing: Definition and Overview

• What is Outsourcing?• The Unisys “Brand” of Outsourcing:

What’s in a Name?• Types of Outsourcing: ITO, BPO• Why Outsourcing: External

(Customer) Benefits• Why Sell Outsourcing: Internal

(Unisys) Benefits• Why Outsource Now?


What is Outsourcing?

• A long term contractual arrangement in which a service provider takes ownership of, and manages, a client’s

• Information systems

• IT operations

• Technology-enabled business processes


What’s in a Name?

OUTSOURCING

Business Process Outsourcing (GO)

Information TechnologyOutsourcing(GO)

Financial ManagedServices(GI)

Managed InfrastructureServices(GIS)EnterpriseBusiness Services

(GI Public Sector)


Business Process Outsourcing (BPO)

Definition:

• Performing entire business operations functions which may include the information technology operations, applications management and business process integration

Examples:

• Payment Processing• Life & Pension• Mortgage Processing• Healthcare Payer Administration• Finance• Contact Center• Imaging/Workflow


Information Technology Outsourcing (ITO)

Definition:

• Long-term, contractual arrangement in which a service provider takes ownership of and manages a client's information systems operations or department

Examples:

• Data Center Management• Applications Management• Distributed Systems• Desktop and Network Services


BPO vs Managed Services

• Business Process Outsourcing: Performing entire business operations on a one-on-one basis.

• Managed Services: outsourcing provided to mutliple clients from one or several locations.


Core, Non Core

NON-CORE, YET CRITICAL

CORE BUSINESS

• Check Processing

• Policy Administration

• Mortgage Loan Administration

• Human Resources

• Supply Chain Mgmt.

• Managing market Image/trademarks

• Caring for patiuents

• Developing new consumer products

• Cafetieria

• Laundry

• Maintenance

NON-CORE, NON-CRITICAL


Why Outsource?What’s in it for the customer?


Why Sell Outsourcing?What’s in it for Unisys?

Long term, recurring revenue stream

Enhanced financial

predictability& visibility

Builds long term client

relationships

Promotes other Unisys

products

Increases company

value

Improves business stability


Why Outsource Now?

• Image problems?

• “Is our industry reputation where we want it to be?”

• Strategic direction change?

• “We are moving toward a more ‘virtual’ corporate model.”

• Financial goals not being met?

• “Our year-end results were lower than expected, we have to do something!”

• Business pressures mounting?

• “This pending merger—we must show ROI— and quickly.”

The compelling event.




goalsobjectives

gap

current performance

level

solution phase:

desired performance

level

evaluate & adjust

implement & change

current:PeopleProcessesInfrastructureResources

Image: Wall Street, Customers, CompetitiveStrategic: Trends, Directions, FutureFinancial: Profit, Budgets, AnalystPressures: Market, Industry, Technology, Servicing, Media

External Drivers:

Conceptualize

Assessment

Requirements

Design

LOI

Due Diligence

SOW

Contract


IMAGE STRATEGIC FINANCIAL PRESSURES

Comments / Internal Strife

CEOOverall External View,

3 Year PlanBalance Sheet and Income Statement Growth,Stock Valuation

Competitive Changes,Globalization,Commoditization, Symbiosis

Immortality

CFOFinancial and Analyst

ROI, Profitability Cost PredictabilitySecurity of assets

ROI, Profitability, Cost Predictability

Market Slumps, Regulation, Changes,Asset longevity

Needs of Business vs. ROI

CIO End User SupportStandardization

Cost Containment and effectiveness

Technology Realization,Market changes

Practicality vs. demand

Overall operational effectiveness

Move the business forward by year

Cost Symbiosis, Impartial,Prioritization

Equity distribution,

CTOStandardization and competitive advantage

Operational, Functional, Relevance to mission critical

Justification of recommendations

Vendors, Political and Inner circle structure

Protect his decisions, Grounded and Impulsive

Overall effectiveness and completeness of information

Repository of intellectual capital and it’s application

Justification of costKeeping it real,

Tangible proof of value

Market Position and Public View

Market Share and Retention

Revenue GrowthAttention, Recognition,Competition

Competitive Gain, Perceived Value

“C” Levels and Internal & External Drivers

COO

CKO

CMO


• Improved service

• Access to key IT resources business processes and skills

• Speed to Market

• Financial stability, diminished customer risk

Outsourcing’s New Emphasis: Business Benefit


Practice Exercise Module 2:

Part 2:

Complete the Module 2 Simulation and Initial Executive call and identify:

1. Business Drivers (capture in Compelling Events of TAS)

2. Key Issues per Executive (capture in the Decision Criteria of TAS)

3. Business and Personal Agendas for Key Executives (capture in TAS)

4. Initial Tactics

Part 1:

Review the Client Case introduction sheet in Appendix A. and begin documenting on the TAS Opportunity Plan in the following:

1. Customer Business Profile

2. Opportunity Profile

3. Compelling Event


TAS FormCustomer’s Business Profile

REVENUE PROFIT FISCAL YEAR END CORPORATE AFFILIATION

Opportunity Profile

Compelling Event

Describe the customer’s business conditions. Include finance, revenue, profit and key performance indicators. Identify the customer’s major lines of business, affiliations, products, and markets. Include information about recent mergers and acquisitions.

Describe the customer’s project or application. What are the customer’s business objectives for the project? What is the total cost and/or budget for the project? How does the project affect the customer’s overall business?

What is driving the customer to make a decision or a change in the current situation? What is the payback if they make a change? What are the consequences if they do not act? What specific date is associated with the consequences/payback?

Target Target Account Account SellingSelling

Opportunity Opportunity PlanPlan

AccountAccountSales OpportunitySales OpportunityDateDateTeamTeam

(CONFIDENTIAL WHEN COMPLETE)

Target MarketingSystems


MODULE 3:Current

Environment


Module 3: Current Environment

Karl Kaiser, CIOCity of Minneapolis


Objectives:

1. Identify the capabilities of an organization’s ability to change.

2. Determine the strengths and weaknesses in an organization’s ability to change.

Module 3: Current Environment




goalsobjectives

gap

current performance

level

solution phase:

desired performance

level

evaluate & adjust

implement & change


Conceptualize

Assessment

Requirements

Design

LOI

Due Diligence

SOW

Contract


• People

• Processes

• Infrastructure

• Resources

Current Environment

“You can only carry and accomplish so much with what you have.”


PeopleOrganization Capability: People

• Skills

• Knowledge

• Experience

• Bandwidth

Barrier or Enabler?

1. Retaining

2. Training

3. Maintaining

And at what Cost?

“I lost the new play book, what do we do and when?”


Processes

Organization Capability: Processes

70s, 80s, 90s, and 00s: it’s all about change

1. How you do work:

• Beginning to end

2. What you do work with:

• Tools

• Applications

• Support

“Businesses continue searching for greater results with reduced overhead.”

Selling Complex Services: BPO and ITOSelling Complex Services: BPO and ITORecords

Processes Cut Across Departmental Boundaries

RealityOffices

LoanOffices

Bank Branches

250

39

20

EdinaOffice

Scottsdale

Fargo

Open/Setup

SecondaryMarketing

ProcessingClosing

Underwriting

Processing

Closing

Records

Servicing

ProcessingClosing

Underwriting

Records

ClosingPackage

Open/Setup

PropertyUnderwriting

Open/Setup

Infrastructure


Infrastructure

• Systems / Technologies

• Facilities (Locations)

• Networks

• Applications / Operating Systems

Organization Capability: Infrastructure

“If they see it they may take it away.”


Resources

• Alliance Partners

• Budgets

• Contractors and Vendors

• Policies

Organization Capability: Resources

“If they see it they may take it away.”


Force Field

Driving Force

RestrainingForce

PeoplePeople

ProcessesProcesses

ResourcesResources

InfrastructureInfrastructure

Business DriversBusiness Drivers

Emerging TechnologiesEmerging Technologies

TrendsTrends

The Goal:Greater

Performance

Enabler?Inhibitor?Both?


MarketPosition

BusinessPerformance

ProcessEfficiency

SingleChange

Multiple Changes

EnterpriseWide Changes

FocusOf

Benefit

Scope Of Change

BusinessRe-invention

Organization Transformation

ProcessRedesign

Match scope and pace of change to companies’ need for and ability to change!

Scope vs. Ability


Current Environment “Checklist”

1. Scope of Current Operations 2. Target Operating Model3. Details by Work Type4. Staffing Numbers and Costs5. HR Terms and Conditions6. Premises7. Assets8. Technology 9. Third Party Contracts

10. Other Costs11. Costs Associated with Transfer


Practice Exercise Module 3:Part 1:

Complete Module 3 Simulation and Executive call; identify the barriers the company is facing in:

1. People and their skills / knowledge

2. Processes in the way they perform their work

3. Infrastructure in the systems they use and that are deployed

4. Resources in additional partners and providers they use

As you go through the simulation, document on the TAS form:

• The problem areas

• Identified areas the company has indicated they need to change (opportunity section)

• Identify the infrastructure areas that would most likely require change to support successful achievement of the business goals.

Part 2:

Create a Force Field diagram that illustrates their barriers & enablers in People, Processes, Resources and Infrastructure.


TAS Form






Opportunity Assessment

SALES OPPORTUNITY ORDER AMOUNT CLOSE DATE

Write in the date and assess your position using + or –. DATE DATE DATE

If you don’t know, put a question mark. Assess your competitor’s position.

Repeat at critical points in the sales campaign.

IS THERE AN OPPORTUNITY? OUR

CO. OUR

CO. OUR

CO.

1 CUSTOMER’S APPLICATION OR PROJECT

DEFINED UNDEFINED

+ –

2 CUSTOMER’S BUSINESS PROFILE

STRONG WEAK

+ –

3 CUSTOMER’S FINANCIAL CONDITION

STRONG WEAK

+ –

4 ACCESS TO FUNDS YES NO

+ –

5 COMPELLING EVENT DEFINED UNDEFINED

+ –

CAN WE COMPETE?

6 FORMAL DECISION CRITERIA

DEFINED UNDEFINED

+ –

7 SOLUTION FIT GOOD POOF

+ –

8 SALES RESOURCE REQUIREMENTS

LOW HIGH

+ –

9 CURRENT RELATIONSHIP STRONG WEAK

+ –

10 UNIQUE BUSINESS VALUE STRONG WEAK

+ –

CAN WE WIN?

11 INSIDE SUPPORT STRONG WEAK

+ –

12 EXECUTIVE CREDIBILITY STRONG WEAK

+ –

13 CULTURAL COMPATIBILITY GOOD POOF

+ –

14 INFORMAL DECISION CRITERIA

DEFINED UNDEFINED

+ –

15 POLITICAL ALIGNMENT STRONG WEAK

+ –

IS IT WORTH WINNING?

16 SHORT-TERM REVENUE HIGH LOW

+ –

17 FUTURE REVENUE HIGH LOW

+ –

18 PROFITABILITY HIGH LOW

+ –

19 DEGREE OF RISK LOW HIGH

+ –

20 STRATEGIC VALUE YES NO

+ –


MODULE 4:

Mapping Out a

Sourcing Strategy


Module 4: Mapping Out A Sourcing Strategy

John Little, Director of Retail Services, Barclay’s Bank

Part of Intelligent Processing Solutions, Ltd. (iPSL)


Objectives:

1. Identify the gap.

2. Identify the reasons the gap exists.

3. Determine the sourcing strategy.

Module 4: Mapping Out A Sourcing Strategy




goalsobjectives

gap

current performance

level

solution phase:

desired performance

level

evaluate & adjust

implement & change


Conceptualize

Assessment

Requirements

Design

LOI

Due Diligence

SOW

Contract


1

2

GoalsObjectives

Do it Better

Current:PeopleProcessesTechnology

Implement & Manage

Traditional Paths

solution phase:

• Design

• Build

Failure to achieve expected results

Problems


What is Possible?

1. What is possible?

2. What happens if we miss?

3. Where do I measure:

• Productivity?

• Focus Areas?

• Costs?

• Effectiveness?

gap

current performance

level

desired performance

level


What is Possible?

Current:PeopleProcessesInfrastructure Resources

Unisys Client

Current:PeopleProcessesInfrastructure Resources


IT Capability vs. Contribution

LowLow HighHigh

HighHigh

IT Capability

IT C

on

trib

uti

on

Strong Strong

Outsourcing Outsourcing

CandidatesCandidates

Strong Strong

InsourcingInsourcing

CandidatesCandidates

TransformationalTransformational

OutsourcingOutsourcing

SelectiveSelective

OutsourcingOutsourcing

IT Capability vs. Contribution

LowLow HighHigh

HighHigh

IT Capability

IT C

on

trib

uti

on

Strong Outsourcing Candidates

Strong InsourcingCandidates

Transformational

Outsourcing

Selective

Outsourcing

Outsourcing is accepted business practice. Lacking balance supply and demand, IT responses to service crises achieve little until next crisis.

Source: META Group

The Sourcing Lifecycle

• Business Alignment•Map to business plan

• IT Assessment•Skills, value, ability to improve

• Sourcing Strategy•Value vs. Capability

• Source Selection•Evaluation criteria

• Sourcing Management•Tools, SLAs, improvement

Developing Sourcing Strategies


Outsourcing vs. Insourcing1. Do I want to be in the check processing

services business?

2. Do I gain competitive advantage by retaining this service in house?

3. Can someone else provide this service?

4. Can someone else do it more effectively?

5. What risks am I taking by having someone else perform the service?

6. Are there measures that can be taken to limit my risks?

7. Are there some things that I should always retain?


New Sourcing Models

IT Efficiency

Business Outcomes

MANAGEMENT

OPTIMIZATION CREATION

ACCESS

Delivery

Exploit knowledge and human capital to maximize market share

Deploy and apply resources and processes to maximize return on

assets

Connect knowledge and relationships in virtual markets to

maximize return on equity

Procure functionality tomaximize operating income

Value

Shared Environment



Service Provider Segments• Business services - e.g., business process re-engineering

(BPR), business process outsourcing (BPO), business service provider (BSP)

• Traditional outsourcing - e.g., data center, desktop services

• Applications - e.g., application maintenance, ASP models

• Management - e.g., management service provider (MSP), security service provider (SSP)

• Infrastructure service providers - e.g., Internet service provider (ISP), network service provider (NSP), commerce service provider (CSP), hosting service provider (HSP)


Mapping Services to Sourcing Models

Service Provider (TSSP and SSP)

ASP

BPR/Change Mgt.

Applications Outsourcing

Enterprise Operations

Meta Market Maker

IT Efficiency

Business Outcomes


IT Outsourcing

Internet Market Maker

Hosting — Internet Data Center

Product Support

MANAGEMENT

CREATIONOPTIMIZATION

ACCESS

Consulting

Integration

Shared Environment

Desktop

NetworkHelp Desk

BSP/PSP


Analysts’ Views: Unisys Positioning

Unisys

Challengers Leaders

Niche Players Visionaries

Abilityto Execute

Verizon

Compaq

LockheedMartin SAIC

CGI Group

Perot SystemsACS

EDSIBM

CSC

Completeness of Vision

Gartner’s “Magic Quadrant” The “META Spectrum”


Client’s Sourcing Strategy

Based on:

• Vision & Values

• Political and Financial Assessment

• An Action Plan


Client’s Sourcing Strategies

• Standardize

• Centralize

• Streamline

• Outsource


Three Types of Relationship

Business Value Enhancement

EffectivenessFocused

EfficiencyFocused

Utility

Competitive Advantage

Frontier

Relationship Complexity


Measuring Performance:

• Does the client currently measure and track their performance?

• What areas do the measure?

• Why are they focusing on these areas?

• What improvements have they stated they want to achieve in those areas?

• Do they know what is possible?


Standards

Cross-Training and Knowledge Management

Online services and routine automation

Remote management

Cross-functional and integrated services

Change management and root cause analysis

What Causes the Problems?

Process

Inefficient service management• Duplicate problems• Title & land registration• Process inefficiency• Labor utilization• Small/remote sites

Transaction

Inefficient service transactions• Number of mortgage applications• Application processing time• Underwriting time• Exception processing• Appraiser reliance

Example: Mortgage

Processing


Predictability

Scalability

IncreasedEnd User Satisfaction

Risk Mitigation

Outsourcing Value Proposition

Flexibility

MeasurableBusiness

Value

21

36

4

Lower Cost

5


Gain/Strengthen Control• Provide consistent service delivery processes• Achieve predictability of infrastructure performance

and budget

Improve Service Quality• Apply transferred knowledge to better align IT with

business objectives• Continuously improve end-user service experience

and your customers experience

Address Skill Set Requirements• Execute faster• Reallocate resources to strategic IT business

How Much Transformation Is Possible?


Gain/Strengthen Control• Provide consistent service delivery processes• Achieve predictability of infrastructure performance

and budget

Improve Service Quality• Apply transferred knowledge to better align IT with

business objectives• Continuously improve end-user service experience

and your customers experience

Address Skill Set Requirements• Execute faster• Reallocate resources to strategic IT business

Achieve Predictable Costs• Leverage Unisys resources• Manage service delivery costs• Leverage vendor toolset• Reduce Training Expenses



• Productivity Improvements

•Improved User Satisfaction

•Lower TCO

• Greater Flexibility to match Business Requirements to User Needs

• Measurable Results

•Formal Service Levels

• Predictive Costs

•Fixed for given level of Service over time

• Greater Strategic Value



Potential Showstoppers

Tax Transfer of staff Premises Assets Liabilities Regulatory


Target Prospect Profile: BPO & ITO

• Compelling business event driving outsourcing decision• Change in financial model• Change in management structure• Examples - merger/acquisition, executive turnover, industry

turmoil, division sold

• Opportunity in Unisys targeted industries• Financial Services• Public Sector• Transportation• Communications• Media/Commercial


Target Prospect Profile: BPO & ITO

• Project budgeted or required• Predisposed to outsource non-core and non-strategic

core business processes or IT operations (e.g., directed by Chairman via annual report or identified executive sponsor/advocate)

• No major labor issues with the proposed outsourcing solution

• No major government (e.g., tax laws) or political issues (e.g., state protectionism) limiting outsourcing

• TPI or other third party not in the account


Target Prospect Profile (BPO-Specific)

• Sales relationship at Business Unit Head, COO, CFO or CEO level

• Contract value $50M or greater• Contract term 5 years or more• Opportunity in existing Unisys BPO market

• Payment processing• Check processing• Remittance processing

• Mortgage administration• Life & pension insurance administration• Healthcare payer administration• Airline operations administration

• Cargo or baggage management• Passenger ticketing• Boarding Inventory• Passenger baggage reconciliation


Target Prospect Profile (ITO-Specific)

• Sales relationship at VP MIS, CIO, COO or CFO level• Contract value $20M or greater• Contract term 3 years or more• Client has mixed hardware environment, which includes

Unisys equipment• Opportunity is for an existing ITO offering

• Data Center Management• Managed Hosting Services• Application Management• Network Management• Desktop Management

• Lowest cost is not the ONLY vendor selection criteria


1. List the areas discovered in the simulation case study where the client does not appear to understand the magnitude of risk and consequences.

2. Create two or three consequence questions that will expose the gap to a C-level executive.

3. Identify areas in which Unisys can help the client achieve greater results.



TAS Form






Opportunity Assessment

SALES OPPORTUNITY ORDER AMOUNT CLOSE DATE

Write in the date and assess your position using + or –. DATE DATE DATE

If you don’t know, put a question mark. Assess your competitor’s position.

Repeat at critical points in the sales campaign.

IS THERE AN OPPORTUNITY? OUR

CO. OUR

CO. OUR

CO.

1 CUSTOMER’S APPLICATION OR PROJECT

DEFINED UNDEFINED

+ –

2 CUSTOMER’S BUSINESS PROFILE

STRONG WEAK

+ –

3 CUSTOMER’S FINANCIAL CONDITION

STRONG WEAK

+ –

4 ACCESS TO FUNDS YES NO

+ –

5 COMPELLING EVENT DEFINED UNDEFINED

+ –

CAN WE COMPETE?

6 FORMAL DECISION CRITERIA

DEFINED UNDEFINED

+ –

7 SOLUTION FIT GOOD POOF

+ –

8 SALES RESOURCE REQUIREMENTS

LOW HIGH

+ –

9 CURRENT RELATIONSHIP STRONG WEAK

+ –

10 UNIQUE BUSINESS VALUE STRONG WEAK

+ –

CAN WE WIN?

11 INSIDE SUPPORT STRONG WEAK

+ –

12 EXECUTIVE CREDIBILITY STRONG WEAK

+ –

13 CULTURAL COMPATIBILITY GOOD POOF

+ –

14 INFORMAL DECISION CRITERIA

DEFINED UNDEFINED

+ –

15 POLITICAL ALIGNMENT STRONG WEAK

+ –

IS IT WORTH WINNING?

16 SHORT-TERM REVENUE HIGH LOW

+ –

17 FUTURE REVENUE HIGH LOW

+ –

18 PROFITABILITY HIGH LOW

+ –

19 DEGREE OF RISK LOW HIGH

+ –

20 STRATEGIC VALUE YES NO

+ –


MODULE 5:

Filling the Gap


Module 5: Filling the Gap

Charles Weiser, Group CEO, RAMS Home Loans

HOME LOANS


Objectives:1. Identify the outsourcing

services Unisys provides that are required for the client to achieve their performance goals.

2. Create a conceptual solution that represents the future state of the client’s operations.

3. Understand the key drivers and inhibiting factors that affect customers’ outsourcing decisions

Module 5: Filling The Gap




goalsobjectives

desired performance

level

gap

current performance

level

solution phase:

desired performance

level

evaluate & adjust

implement & change

Current:PeopleProcessesInfrastructureResources

Conceptualize

Assessment

Requirements

Design

LOI

Due Diligence

SOW

Contract


Outsourcing Drivers / C-Level Benefits: General

Business Drivers:• IT/ Business Alignment

• Speed-To-Business Results• Staffing Issues

• Recruiting• Training• Retention• Core Competency Decisions

• Rising Costs & Limited Budgets• Globalization of Business• Complexity & Rate of Change• Increasing End User Demands• Security of Assets

C Level Benefits:• Image

• Increasing Revenue

• Decreasing Costs & Predicting Costs

• Profitability

• Market Share

• Competitive Advantage

• Productivity

• Alternative Uses of Capital

• Protection of Corporate Assets & Officer Liability


BPO Services

Major Components Major Benefits Major Competitors

Major Differentiation

1. Payments• Check• Remittance• Image Archive• FEDI & Internet-based• EBPP• Research, adjustment

& exceptions• Cards

2. Mortgage• Origination• Servicing

- Payments- Secondary Mrktng.

3. Insurance• Policy Admin• Pension• Customer Care• Claims

4. Healthcare• Member & provider• Claims Management• Call Center Support

Single Point of accountability

Reduced & Predictable Transaction Costs

Economies of Process

Cash flow improvements

Risk Share & Gain Share

Reduced Capital Investment

Reduction in headcount

Speed to business

EDS, IBM, CSC, ACS, Fiserv, Accenture

Niche:Exult, Remitco, Convergys, Convansys

Vertical industry expertise

Global reach

Technology heritage

End-to-end capability

Contract Flexibility

Change Management Expertise

Partnership Approach

Multi-vendor support

Employer of Choice


ITO Services

Major Components Major Benefits Major Competitors

Major Differentiation

1. Data Center

2. Applications Management

3. Distributed Computing

4. Desktops & Networks

1. Scalability

2. Lower Unit Costs

3. Improved Service

4. Expanded career paths for transitioned employees

5. Predictable IT costs

6. Skills Infusion

7. Avoidance of capital investment

8. Access to latest technology

IBM, EDS, CSC, ACS, Perot, CGEY, CGI, SAIC

Technology Heritage (Unisys)

Customer intimacy

Experience

Global reach

Contract Flexibility

Change Management Expertise

Partnership Approach

Multi-vendor support

Employer of Choice


Unisys Outsourcing Differentiators

• Business partner approach• Benefit sharing

• Cost efficiencies• Profits

• Listen to the client’s needs before formulating a solution• Help clients define initial requirements drawing on operations and

industry expertise• Outsourcing contracts developed to anticipate changing requirements

and future enhancement needs• Relationship operates on mutual respect and trust, not contract

administration

• Focused areas of industry expertise• Financial Services• Public Sector• Transportation • Communications

• Commercial/Media


Unisys Outsourcing Differentiators

• Strong reference accounts - for example:• Payment processing

• Check Processing (iPSL, UPSL, WaMu and Maybank)• Remittance Processing (Comcast)

• Insurance Claims Administration (UISL, Royal & SunAlliance)• Mortgage Loan Administration (RAMS)• State & Local Government Administration (Commonwealth of PA,

City of Minneapolis)

• Large-scale transaction processing expertise• Transition management expertise (people, processes &

technology)• Unisys equipment expertise


Evolving to Meet Our Clients' Needs

Traditional ITO

Vertically-Specific BPO

Horizontal BPO

Helping our clients move to the next step in IT support value!

Value Principles• IT alignment with business• Measurable improvement• Accountability• Cost control • Predictability • Risk sharing• Flexible contracting

Partnering to produce measurable business value


Outsourcing Deal “Flavors”

• Lift and Drop: takes on an existing operation and makes no change to either the operational processes or IT systems involved.

• Financial Engineering: releases capital from the operation or seeks some new method of pricing which allows the client to meet his business objectives, i.e., moving costs from fixed to variable based on volume.

• Platform for growth: service provider sees a market opportunity to create a service offering and leverage this across incremental volume by winning business from additional clients.

• Process change: transformational – often a “greenfield” approach, wherein the service provider acts as a change agent for the client. In this case, significant investment, and often long payback period


Unisys Outsourcing “Landscape”

Payments• IPS• RPS• R&LInsurance• Unisure• OSIRISMortgage• UFSSHealthcare• HealthPas

Technology Cost Savings

Bu

sin

ess

Ben

efit

“ITO”Data Center

Application ManagementDistributed Computing

Desktops/NetworksHosting

“Horizontal BPO”BPR, Workflow, Doc. Mgmt., HR,

Call Center, CRM, SCM


Business Process Outsourcing (BPO)

Basic Set of BPO Services1. Payments Processing2. Insurance Processing3. Healthcare Payer

Administration4. Mortgage Processing

On our radar (future):5. Transportation (Ground and

Air)

Additional Services:1. Finance & Accounting2. Human Resources3. Travel Expense Reporting4. Call Center

Load it up!!!


IT Issues + Business Issues = BPO

”

“From “IT-Enabled BPO: Is There Any Other Kind?”Katrina Menzigian, IDC

“ . . . BPO has always been technology enabled . . . if the BPO provider had not leveraged technology at some level, then it would not have been able to generate profit margins capable of keeping it in business.”

”IDC research shows that gaining access to technology through BPO engagements is one of the strongest drivers behind many companies' decisions to work with outsourcing providers. . . . clients assume that technology is an inherent aspect of any BPO engagement.”


BPO-Specific Drivers


BPO Barriers


BPO Vendor Selection Criteria


BPO Solutions: Payment ProcessingPayment Processing: An umbrella term covering all forms of payment processing, including: Check Processing, Remittance Processing and

Non-Check Payment Processing.

• Check Processing: Activities relating to reading, recording and reconciling bank check deposits made by individuals and businesses.

• Remittance Processing: Bill payment processing involving checks and payment slips (e.g., utility payments and cable bills).

• Non-Check Payment Processing: Includes wire transfer, ACH, debit/credit card, telephone and web payments


BPO Vendor “Must Haves”

• Capability •Application of multiple technologies•Specific vertical industry expertise and its process best practices

• Contracting Flexibility•Risk/gain sharing

• Customer Intimacy•Relationship oriented•Customer advocacy


Information Technology Outsourcing (ITO)

Basic Set of ITO Services:1. Data Center Management2. Applications Management3. Distributed Computing4. Desktops, Networks

Additional Services:1. Help Desk2. Business Continuity &

Recovery3. Managed Hosting4. Managed Application

Services

Load it up!!!


ITO-Specific Drivers

• Critical skills

• Business performance/competitiveness

• Speed

• Core business focus

• Costs

• IT ROI

• IT and business alignment

• Control


ITO-Specific Drivers


ITO-Specific Barriers


ITO Vendor Selection Criteria


Summary: Factors Influencing Outsourcing Vendor Choice

• Must deliver on promises in a measurable way • Strong, positive & relevant references• Clear message with relevant value propositions• Validation (via analyst community) of success

in the day-to-day delivery of outsourcing services


Practice Exercise Module 5

Fill out the TAS opportunity plan:

1. Your Solution

2. Strengths and Weaknesses

3. Unique Business Value

4. Sales Goal and Objective

5. Competitive Strategy

6. Critical Success Factors


TAS Form






Your Solution

Unique Business Value

Competitors

COMPETITOR #1 COMPETITOR #2 COMPETITOR #3

Solution Proposed

Alignment

Strengths

Weaknesses

Describe your solution. How will it work in this customer’s environment? How does it meet their compelling event? Include any alliances or business partner solutions required to make it operational for the customer.

Define your unique business value with a value proposition that is specific to this customer, defines a measurable business result, and creates credibility by proving your ability to deliver. Have you confirmed this with the customer? How does this differentiate you from your competitors?

For each competitor describe their solution, including products, services, partners, and price. Identify their alignment and their strengths and weaknesses. Determine their most likely strategy.

Relationship Strategy

Key Player Business Agenda Personal Agenda Relationship Strategy

Our Strengths & Weaknesses

Strengths Weaknesses

Who are the key people who affect the decision or who will be significantly affected by the decision? Describe their business and personal agendas and the relationship strategy (Leverage, Motivate or Neutralize) you will use with each.

Identify all of your strengths and weaknesses. Focus on the business, organizational, and political issues. Goal

Sales Objective

Competitive Strategy

Critical Success Factors

Describe your desired, long-term position with the customer. Identify how a closer relationship with you will advance the attainment of their business goals. Also include the long-term gain for your business, i.e., future revenue or strategic value.

Describe your specific products and services. Identify the projected close date and total order amount.

Review your strengths and weaknesses. Compare your position to the competition. Determine your strategy (frontal, flanking, fragment, develop or defend) and the variation that you will employ to win this opportunity.

What has to happen for you to win this opportunity? Identify things the customer must do, things the competition must do, and things you must do.


MODULE 6:

Selling the Solution


Module 6: Selling the Solution

Dyan Beito, Executive Vice President, Banking and Financial Services Division, Washington Mutual


Objectives:

1. Create the approach plan that moves the client from current performance to desired performance

2. Identify the services and resources required to propose and implement an outsourcing solution for the client

Module 6: Selling the Solution



GoalsObjectives

Desired Performance Level

gap

Evaluate & Adjust

goalsobjectives

solution phase:

desired performance

level

evaluate & adjust

implement & change


currentperformance

level

Conceptualize

Assessment

Requirements

Design

LOI

Due Diligence

SOW

Contract


Instruments of Analysis

• Assessment

• Requirements

• Design

• Due Diligence Letter of Intent (LOI)


Why Analyze First?

Proper analysis answers many questions:

• What should I do first?

• Which direction should I go?

• Will this be enough?

• Will it be too much?

• What are my options?

• How else could it be done?

• What are my risks?


Tools for Customer Commitment

Financial& Operating

ModelsDone?

Heads of Terms

Letter ofEngagement

JointVision

Decided?

Statementof Work

Complete?

Contract

Agree on Business Drivers?

Built the Business

Case?

Due

Diligence?

STAGE MILESTONE COMMITMENT


The Process• Identify Opportunity

• Manage Opportunity

• Generate Proposal

• Close Sale


Identify Opportunity


Identify Opportunity

• Sales Executive conducts research• Target account is selected• Sales strategy is formulated• Team with other Unisys groups as needed• Sales Executive gains sales management

approval to pursue


Manage Opportunity


Manage Opportunity

• Sales Executive develops preliminary solution• Sales Executive develops preliminary revenue model• Bid/No-Bid review is conducted• If bid approval given, then bid team is formed

• Bid/Capture Manager• Financial Analyst• Solution Lead• Proposal Manager• Contract Specialist• HR Business Partner


Generate Proposal


Generate Proposal

• High-level assessment/requirements definition• High-level solution development• Preliminary P&L• Detailed requirements definition• Detailed solution development (Will it work?)• Proposed P&L and pricing strategy (Will it sell?)• Deal Description and Review• If approved, complete proposal and submit

to client


Close Sale


Close Sale• Sell proposal• Obtain LOI• Conduct Due Diligence (DD)

• Minimum two weeks lead time to start DD• Client must provide extensive data before we can go on-site to

verify• DD is highly-structured solution verification process• AE/PM, SDM, and TM join bid team

• Develop Statement of Work (SOW)• Finalize P&L and create BAFO• Negotiate Contract (Ts&Cs) and SOW (including SLAs)• Execute contract


Selling Obstacles

• Cost of Sale • Relationship based sales cycle • Client Internal resistance to relinquishing control• Specific and complex needs• 3rd party consultants• Strategic / tactical alliances• Resources • Internal ( Unisys ) Challenges• Tools & processes for outsourcing


Outsourcing - Traps

• Sole Source – Good news or not?• Client not well prepared• Longer & more difficult than expected sales cycle• Our work get used against us

• No customer compelling event • Sales & Delivery

• Balancing selling with delivery• Proposal / Engagement team continuity

• Under estimating / avoiding HR issues• Poorly defined / incomplete scope• Unrealistic / incomplete contract• The belief that “any big deal is a good deal”


Industry Led Model - Collaborative Leads

• Industry Led • Build the relationship with the Client• Spot the need and build the initial Client opportunity • Bring in the skills and talents of Unisys Business units to develop

the total solution• Manage the high level customer relationship through the sales

cycle

• Outsourcing Led • Once defined as an outsourcing opportunity, work as key team

member to coordinate the GO activities• Bring outsourcing knowledge and operational depth personally

and through use of other GO resources; complimenting the Industry domain knowledge

• A “One Unisys” face to the client at all times!


Coordination & Effectiveness

Sales Strategy Development

Program multi functional Unisys team

Deliver sustainable operationalprocess excellence

Deliver Operational IT ExcellenceMarket opportunity identification


Sales Roles in an Industry Led Model

• Create • Relationship building skills• Domain knowledge of market• Market trend awareness• Business case skills• Broad based knowledge

• Sell• Client Knowledge• Domain knowledge of market• Sales process awareness• Relationship building skills• Business case preparation • Commercial skills • Closing skills

Capture

• Program Management

• Commercial / Negotiation skills

• Domain & operational knowledge of business processes

• Due diligence capability

• Closing skills

Run

• Domain knowledge of business processes

• Service level management

• Change program management

• People management

• Delivery focus ( on time, to specification)

• Operational profit

• Account Management / Client liaison


Sales Approval Process

• Provides a structured approval process consistent with TAS, Siebel, TeamMethod, WINS, Joint GI / GO reviews.

• All opportunities have a minimum of three approvals points:

• Qualification Approval (“suspect” into “prospect”)• Proposal Approval (proposal sign-off)• Deal Approval (BAFO or contract sign off)


The Transition Plan

• Processing environments

• Assess implications of financial alternatives

• New process design• Facilities and

configurations• Detailed migration

plans: hardware, software and support

• Account team installation• PMO establishment• Facility preparation• Personnel / staff transfer• Task / work transfer• Subcontract agreements• Third party right-to-use

(RTU)• SLA tracking

• Baseline information• Detailed understanding of

client operations, procedures, and policies

• Third-party contracts development

• Statement of Work (SOW) development

• Contract negotiation and execution

• Employee communications

Due Diligence Transition Migration

Con

trac

t Effe

ctiv

e

Con

trac

t Tak

en


Roles by Sales Phase

Contract EffectiveLOIBid / No Bid

PSE/CRE/Marketing

Proposal Team

EVEL

OF

FFO

RT

L

E

Bid-

C

apture Mgr/Financial Analyst/Solutions Mgr

Ac

c

g

t.

-Exe

c M

M

r/

n

Sv

si

c

n

Mg

De il very r/ Tratio

gr

Legal Counsel


Roles And Responsibilities(Defined in Participant’s Guide)

• Bid & Capture Manager• PSE/CRE• Financial Analyst• Solutions Architect• Proposal Manager• Due Diligence Manager• Legal Counsel• Account Executive/Manager• Service Delivery Manager• Transition Manager


Sales & Implementation Phase

Who’s Involved?

HR Activity

Pre-Sales Client Develop People Strategy & Make Risk Assessment

Due DiligenceClient/ Employees

Analyze Current Situation & Propose Transition Strategy

TransitionClient/ Employees

Plan & Implement People Transition (Hire/Orient/Train)

Integration EmployeesProvide Change Management & Facilitate Team Building

Human ResourcesManagement Process


Outsourcing Intranet (Additional Resources)

http://iwww.unisys.com/go



• Overall Approach

• Resources

…that will move the client from current performance to desired performance.

Using the results obtained from the Case Study and Simulation, identify:


TAS Form






T a c t i c s

A c t i o n R e s o u r c e s R e q u i r e d R e s p o n s i b i l i t y T i m i n g

r o v e y o u r v a l u ee t r i e v e m i s s i n g i n f o r m a t i o nn s u l a t e a g a i n s t c o m p e t i t i o n

i n i m i z e y o u r w e a k n e s s e sm p h a s i z e y o u r s t r e n g t h s

P r i m eT a c t i c s

P

RI

M

E


MODULE 7:

Value

Tracking &

Feedback


Module 7: Value Tracking & Feedback

Neil Tointon, Director of Business Relationships, Abbey Life

Part of Unisys Insurance Services, Ltd. (UISL)

Unisys

Unisys Insurance

Services, Limited (UISL)


Objectives:

1. Identify the key performance indicators that provide the opportunity to communicate success to the client executive community

2. Monitor the on-going performance of the services engagement and recommend areas to adjust

Module 7: Value Tracking Success



GoalsObjectives

Desired Performance Level

gap

goalsobjectives

solution phase:

desired performance

level

evaluate & adjust

implement & change


currentperformance

level

Conceptualize

Assessment

Requirements

Design

LOI

Due Diligence

SOW

Contract


Business Impact to Track

Business Result

Business Result

Image

Strategic Direction

Financial Goals and

Requirements

Business Pressures

“Before State”

New [current] State


•Customer Loyalty & Improvement Process (CLIP)•Customer Value Index (CVI)•Benchmarking

Value Tracking & Feedback Tools



For the case study and simulation account, list the areas to measure success.

Wall Charts &

Backup Material


Goal:

Image

Financial

Strategic

Business Pressure

Manage Steady State

Application Layer

Driving Change

Business Drivers

Market Trends

Competition

Technology Trends

Barriers or Enablers?

People

Processes

Resources

Infrastructure

Path without understanding

the gap

Our Core Competency is understanding

the gap

Siebel, Ariba, SAP, PeopleSoft, e-Business, Internet Access, Custom Application Change

SPOC

PMO

Systems Mgmt

Security Mgmt

Network Mgmt.

Asset Mgmt

Infrastructure

Maintenance

IMAC

Provisioning

Transformation:Assess, Design, Model, Build

Speed to Business Results

Infrastructure Layer

Mod 2 Mod 2Mod 3 Mod 4 & 5Mod 6

Business Processes

Payment, Policy Admin, Claims, etc.


18 Month Time Frame

$500

$1,000

$5,000

$100,000

$175,000

$250,000

Sell high end / low entry services

Unisys Benefit•Build Trust•Influence RFP•Shorten sales cycle•Less Competition

Customer Benefit•Risk Mitigation•Cost Avoidance•Shorten time to desired result

Selling Cycle


Fact’s & Gossip

VALUE

TRUST

Feelings

Ideas&

Judgments

RISK

“C” Level Trust & Credibility

Rituals & Clichés


Credibility & Trust

Friends & Therapists

Techno Babble

Sell Stuff

Tell

Take briefcase for a ride through your territory

Extra pair of Hands

Technical Expert

Collaborative

Interdependent

Trusted Advisor

Understands my Business

Demonstrated Problem Solver

Intent for long term

Accountable

Credibility

Trust

Low High

High


Research ExecutiveCalls

Presales Close Full IMS

Business

Build UnisysReference StoryMatchingAbove

IdentifyCallStrategy

Obtainappointments

- Drivers- Goals- Financials- Potential Compellingevent

Services Contracts

Mapping the Sales Cycle to the Business Cycle

1 – Achieve Accomplish

2 – Barriers and enablers - People - Processes - Infrastructure - Resources

PMO

SD

SPOC

Dispatch Services

Asset Tracking

Security M&M

4 – Conceptualize the future

5 – Next Steps

Tech PracticeWalk Through

- approach to service - overall solution

Present value to “C” level

- recommended paths

ITS

Health / Data M&D

Tech Plan

ManagedDeploy

Provisions

Convergence


Executive Calls• Business Research

• Drivers• Goals• Compelling Events

• Build Unisys Story• References Based on business results, not solutions

• Calling Strategy• Obtain appointments• Conduct calls

• Call breakdown• Achieve / accomplish – validate research (7-10 minutes)• Barriers (5-7 min)• Gap / Pain (3-5 min)• Conceptualize the future (3-5 min)• Next Steps


Strategies (TAS)

Frontal

Solution

Reputation

3 to 1

Market view

Flanking

Alter rules

Acknowledge &Expand

Buying criteria

Capabilities

Fragment

Niche

PeacefulCoexists

Segment

Partner

Pick and stick until

something significant changes

selling complex services: bpo and ito version 2.0 rwp, aa 06-13-03

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