The 2003 European Outsourcing Summit

June 2-3, 2003

The Sheraton Brussels Hotel & Towers

Brussels, Belgium

Produced by Michael F. Corbett & Associates, Ltd. in association with Fortune® Custom Projects and PA Consulting Group

Monday, 2 June, 2003
Round 1 – 14.00 – 14.50

Information Technology Outsourcing

Educational Track Session

Deals that are Shaping the IT Outsourcing Market

Paul Dyson

IT Outsourcing service leader

and Member of PA’s Management Group

PA Consulting Group

Learn:  Insights and lessons from the market-shaping deals at BP, Sabre and SITA.

With business change rapidly becoming normal practice across almost all market sectors, it is imperative that IT outsourcing arrangements do not inhibit or limit organizations in their ability to react and plan for change.  It is just as important that organizations realize the benefits intended when they undertake business changes as significant as outsourcing. 

Traditionally, the desired flexibility in outsourcing arrangements has given rise to significant costs and lengthy implementation cycles.  It doesn’t have to be that way.  Companies, such as BP, Sabre and SITA, have developed best practices enabling the construction and management of outsourcing arrangements that deliver the value and quality sought – and that motivate suppliers to deliver.

 
Based on its extensive experience working with these and other clients, Paul Dyson of PA Consulting Group shares insights on:

• Catering for business change in the IT outsourcing contract
• Creating the appropriate business relationship to deliver the business benefits
• Managing the IT outsourcing process to deliver value, as opposed to purely cutting costs
• Benefits realization and how to achieve them
  
  

Business Process Outsourcing (BPO)

Educational Track Session

The In’s and Out’s of BPO and How to Realize Benefits from It

Ron Stratton

Principal

Stratton & Company

Graham Pascoe

Partner

PricewaterhouseCoopers

Learn: The typical lifecycle of a comprehensive BPO arrangement and how to realize the anticipated benefits through robust implementation and on-going service management.

In today’s difficult market conditions, organizations are under increasing pressure to adopt new business models, reduce costs and enhance quality in everything they do. Increasingly, organizations are partnering with service providers to introduce comprehensive and innovative BPO arrangements covering a wide range of business processes.  Achieving success requires significantly greater skill, consideration of the long-term consequences, the use of innovative risk-reward contracts and expert management by both client and service provider.

The session will focus on walking through the lifecycle of a typical BPO arrangement, highlighting how to establish BPO arrangements that match an organization’s business drivers and exploit opportunities for process improvement, and what is essential to realizing the expected benefits from the on-going BPO arrangement. 

The session will cover the latest trends in BPO, be supported by case studies and will give insight from both a client and service provider perspective.

A highly interactive segment will be included in the session to allow the experience of the audience and the panel to be shared.  Key topics to be covered, include:

• A description of what BPO is and the lifecycle of a typical BPO arrangement
• Consideration of the strategic options for outsourcing business processes and the development of a business case which is supported by the underlying business drivers
• A walk through of case studies which highlight the outsourcing process and pragmatic approaches for balancing benefits, risks, time and costs to select a partner, negotiate a deal and implement the arrangement
• Description of the various ways in which opportunities for process improvement can be exploited
• The governance of the outsourced service, the management of the commercial relationship to ensure on-going alignment between the parties
• The management of the services – an integrated approach that ensures both parties work effectively together and realize the expected benefits

Real Estate & Facilities Services Outsourcing

Educational Track Session

New Methods in Outsourcing Facility Support Functions

Albert Pilger

Managing Director

Pilger Facility Management GmbH

Fred Klammt

Principal

Aptek Associates

Learn: How to develop an outcomes oriented, service-level based Facility Services Outsourcing contract, establish financial goals and measurements.

This presentation will focus on the outsourcing process for Facility Management Support Services.  An overview of current concepts in Europe and USA will be presented along with a case study from Austria. 

A quick overview of the fundamentals of FM outsourcing with a more detailed review of current best practices – performance-based contracting, setting service levels, flexible outsourcing, management fees, liability and risk issues, and pricing – is followed by a detailed presentation of the experiences at the five million square foot cargo center in Graz - Terminal,  Werndorf/Austria. 

This successful outsourcing project was re-started through an Austrian PPP - Private Public Partnership - and included seven support process parts and service level specifications. The objective was to find a way for the client and its customers to get the support they needed without requiring personnel on their payroll.

Key topics to be discussed:

• Best practices in Facility Outsourcing from Europe and the USA
• Case study of Austrian cargo center
• Performance-based contracting
• Setting service levels
• Outsourcing liability and risk issues
• Contract pricing
  
  

Thomas Cook UK Ltd.

An Outsourcing-in-Action Case Study –

Global Sourcing

Transformation from a Finance Perspective

Ian Ailles

Group Finance Director

Thomas Cook UK Ltd.

Learn: How to outsource and innovate your business at the same time.

In the past 18 months, Thomas Cook UK has turned around its business from a significant loss to a considerable profit.  As part of a far-reaching business transformation programme, the company implemented and co-sourced much of its finance, information technology and human resources administration functions and through doing so saw many business improvements.

In his talk, Ian Ailles, group finance director shares:

• How strategic sourcing can become an important business enabler
• How to innovate with your co-sourcing partner
• Lessons learned along the way
  
  

Round 2 – 15.20 – 16:10

                                                                   Sponsored by: Avaya

An Outsourcing-in-Action Case Study –
Information & Communications Technology Outsourcing

Tom Donnelly

Director, Managed Services

Avaya Inc.

Learn: TBD

Prudential Financial

An Outsourcing-in-Action Case Study –  

HR Outsourcing

     Sponsored by: Exult

Re-engineering the HR Function through BPO

Paul Evans

former Senior Vice President HR

Prudential Financial

Bob Gunn

New Business Executive

Exult

Learn:     Prudential Financial HR BPO – decision, implementation and results.

As the 21st Century unfolds, a number of important forces have rapidly converged to propel business process outsourcing (BPO) into major prominence.  A case in point is Prudential Financial, a major U.S.-based financial services firm with over $500 billion in assets, which decided in January 2002 to enter into an agreement with Exult for comprehensive HR BPO services.

Paul Evans, the senior Prudential executive involved in establishing the relationship, discusses his company’s objectives, the intended business value, major issues and challenges they worked through, how they determine success, and the critical activities during the relationships initial months.

Bob Gunn, of Exult, provides an overview of BPO and describes: 

· The major considerations in formulating a BPO provider’s business model and plan

· Value propositions for customers and shareholders

· The qualities that make a good BPO customer

· Five key considerations for customers and for providers

Abbey Life                                                                     Sponsored by:  Unisys

An Outsourcing-in-Action Case Study –                   

IT and Business Process Outsourcing

Peter Thomas

Managing Director

Unisys Insurance Services, Ltd.

Neil C H Tointon

Director of Operations

Abbey Life Assurance Company Limited

Learn:  How Abbey Life Insurance commercialized and streamlined its policy administration through an innovative outsourcing deal with Unisys.

Unisys Insurance Services Limited (UISL), was formed when Abbey Life insurance outsourced its operation to Unisys.  The new, wholly owned subsidiary consists of more than 1200 former Abbey Life employees, and offers services to other insurance companies in the UK.

Recently, UISL added another customer to its roster: Royal & SunAlliance. Royal & SunAlliance and UISL will undertake the processing and administration of the 2.4 million life and pensions policies of R&SA’s UK Life operation. 

UISL’s Managing Director, Peter Thomas will be joined by a UISL customer to discuss the benefits that have accrued from the UISL – the commercialization of the outsourced Abbey Life enterprise.

They will discuss three key elements in the Life and Pensions administration outsourcing question:

· Maximizing profits by reducing costs: leveraging economies of scale and incorporating the latest technology and business-process best practices to speed processing and deliver guaranteed unit costs for policy administration.

· Driving better customer service by reducing response times, freeing clogged workflows, and cross-training staff to be  equipped to answer a client's query the first time.

· Managing the risk.  New investments always bring increased risk.In the insurance industry, the most costly and risky are investments in new technology and the automation of manual processes. By outsourcing to a partner who specializes in insurance business processing, the insurance provider minimizes its risk while still delivering the savings and service they need to stay competitive.

EDS

An Outsourcing-in-Action Case Study –

Document Management Outsourcing

Sponsored by: Xerox

Paul Clark

Chief Information Officer, EIT Services

EDS

Shaun Pantling

Director and General Manager of Business Services

Xerox Europe

Learn: How one of the world's preeminent providers of outsourcing services, relies itself on outsourcing to meet the needs of its global customer base.

XBS is the established prime provider of document related services to EDS, supplying products or managed services to more than 200 EDS locations across Europe.  The managed services that XBS provide to EDS include the transactional document services, office services and document production and publishing services.  The value these services have delivered to EDS includes improved staff productivity, increased efficiency and more than $1m of cost savings per annum in office printing costs alone.

Through the outsourcing relationship EDS operates the Xerox worldwide computer and telecommunications network and support services that embrace support of global mainframe system processing, application maintenance, desktop and helpdesk support, voice and data network management and server management.

In a recent development of their synergetic partnership, Xerox and EDS have formed a strategic alliance designed to integrate EDS’ information technology (IT) services with Xerox’s document management systems and services to provide customers with one-stop shopping and full support of their office IT infrastructure.  Through this relationship, XBS and EDS have revolutionized the outsourcing landscape, bringing their joint skills to “Digitize the Workplace” – and positioning corporations not just to serve the digital economy, but to benefit through the digitization of the internal enterprise environment.

Round 3 – 16.30 – 17:20

The Outsourcing Process: Strategy

Educational Track Session

Marrying Outsourcing’s Commercial, Legal and Technical Issues

Alistair Maughan

Partner

Shaw Pittman

Learn: How to set the right context and then preserve that context throughout negotiation and implementation of a strategic outsourcing deal.

Recognised as one of the leading outsourcing legal advisers in the UK, Alistair Maughan, has worked closely with numerous corporations, including Lehman Brothers, GlaxoSmithKline, and Prudential Insurance, and with many central government departments, such as the UK’s Home Office, Benefits Agency, and Inland Revenue.  

Along the way, Mr. Maughan has learned that although in a small number of cases the aim of outsourcing may in fact be simply to save costs, in the greater majority of cases, the true goal is to deliver long-term benefits to the company which are manifested in improved shareholder value.  Achieving this means putting into practice the approach that the true role of an adviser on outsourcing is not to dwell unduly on the legalistic issues but to ensure a successful project by marrying the commercial, legal and technical issues.

Topics to be covered include:

· Practices for setting the right outsourcing context and preserving that context throughout the process

· How to develop an outsourcing strategy that achieves success for both parties

· Lessons learned from some of the most sophisticated European outsourcing agreements

The Outsourcing Process: Implementation

Educational Track Session

Successfully Addressing Pre-Contractual and Contractual Issues

Bertrand Nouel

Partner

Gide, Loyrette, Nouel   

Learn: The methodology to be followed and the critical issues to be addressed for establishing a successful and stable contractual outsourcing relationship.

The quality and efficiency of an outsourcing contract largely depends upon the attention paid to the pre-contractual process, i.e.: identifying the company's goals and objectives (through internal due diligence), drafting the specifications, selecting the right vendor (through RFI & RFP processes), negotiating the general terms and conditions and the exhibits (SLA, financial conditions, HR aspects, etc.).

The objectives of this session will be to identify the different steps from the initial decision to outsource until the contract is signed off and to focus on the main critical areas that should be dealt with in the contract, triggering different sets of rules.

Key topics to be covered, include:

· Pre-contractual issues and RFP

· Transfer of personnel issues (European Directive n° 2001/23)

· Transfer of assets and contracts

· Providing for the management of the interests of the parties throughout the duration of a long-term relationship

· How to determine objective and measurable performance levels (SLA) and ensure their respect (penalties, upside incentives)

· Termination and reversibility issues

Procter & Gamble

An Outsourcing-in-Action Case Study –

Information Technology Outsourcing

Launch Plan for a Global IT Sourcing Program

William Metz

IT Strategic Sourcing  & Technology Solutions

Consulting Section Manager

Procter & Gamble

Learn: Why leading companies such as Procter & Gamble are adopting a global IT sourcing model, and the key elements of corporate-wide launch plan to take you there.

In today’s economic environment, information technology executives are under constant pressure to reduce costs.  As they tackle this challenge they must also maintain organizational capability that can flex to meet varying levels of demand.  Many companies believe that the answer to this dilemma is the adoption of a global sourcing model, but are not sure how to get started.  Mr. Metz discusses the benefits of adopting a global sourcing model and his experience launching such a program.

Steps in the launch of a global sourcing model include:

• Setting the objective
• Assembling the right team and organizing for success
• Creating marketing and communications plans
• Creating sourcing plans and selecting pilot projects
• Choosing the right resources in the right locations
• Setting up for success, infrastructure, tools, and training
• Security and disaster recovery
  
  

Tuesday, 3 June, 2003

Round 4 – 14.15 – 15.30

The Outsourcing Process: Strategy

Educational Track Session

Forging a Strategy of Corporate Revitalization

Nigel Roxburgh

Co-founder

National Outsourcing Association (NOA)

Learn: How to look at your business in a new light and seize the competitive opportunities outsourcing presents.

Mr. Roxburgh reviews how a mixture of strategic techniques, technologies, telecommunications and outsourcing methodologies are transforming the way in which organisations may revitalize themselves, and gain competitive advantage. In fact, he argues, that the organization as we know it will be blown away just as in a supernova, allowing a complete rebuilding of the 21st Century corporate.

If you find this a little radical, then Mr. Roxburgh reviews the European climate and market to demonstrate how quickly this thinking is catching on. Using the now classical Porter model, Mr. Roxburgh looks at the areas of the organisation that might be explored to yield competitive advantage, and the tools that might be used for implementation. He takes the example of BT's recent accountancy outsourcing to explore what happens as processes are outsourced, and then looks at the low cost operator route to competitive advantage, stopping on the way to review some of the realities of the telecommunications-enabled offshore outsourcing.

Finally, Mr. Roxburgh concludes that these are not just once-off strategic options presenting themselves, but ones that will need reviewing time and time again.

The Outsourcing Process: Implementation

Educational Track Session

Europe: Ensuring an Appropriate Social Strategy in an Outsourcing Context

An Interactive Workshop Chaired by:

Francis Vidal

Associé
MDM Conseil

Learn: To anticipate and co-design a project with management and unions.

The most major challenge for leading important outsourcing projects in Europe is that the diversity of social and legal constraints is variable from country to country. European legislation presents a complex mosaic of impacts that can translate into heavy obligations in some cases for both the “outsourcer” and “outsourcee” companies.  The solution to successfully confronting this diversity and complexity is ensuring the adhesion of personnel -- investing in a difficult yet leverageable negotiation is well worth avoiding posteori legal battles.

Francis Vidal is joined by panel of management and union executives examining:

• How in any strategic outsourcing project, social impacts must be taken into account as early as the project’s conception.
• The most compelling question that people pose in a strategic outsourcing projects: “What About Me?”
• An innovative approach, process and tools -- called co-design -- that can reach an appropriate solution with management and unions for all parties with measurable results.

The Outsourcing Process:  Management
Educational Track Session

Achieving Value by Managing the Relationship

Richard Harrison

Senior Outsourcing Consultant

PA Consulting Group

Learn: What actions can be taken to derive the maximum benefits available from a successful outsource arrangement

Successful outsourcing relationships are characterized by sustained management effort from conception through to the termination of the contract.  Organizations that consciously manage their relationships through the lifecycle are more likely to obtain benefits.

During contract development and negotiation it is vital to determine roles and responsibilities and the associated timescales and cost associated with achieving service transition.  Service operation requires the management of the day-to-day services, ensuring alignment of supply and demand and supplier performance to commitments.  An effective supplier/management relationship is essential, including:  Establishing, articulating and maintaining the appropriate requirements; basing outsourcing decisions on value rather than cost; managing the outsourcing arrangements proactively and establishing the appropriate governance model.

Key topic covered are:

• Relationships, governance and management
• Performance management and service levels
• Benefit delivery – achieving value by managing the relationship
  
  

The Outsourcing Process: Special Topic

Educational Track Session

Comparative Law of Outsourcing: International Deals and Conflicts of Law

William B. Bierce

Bierce & Kenerson, P.C.

Learn: How to adapt to competing jurisdictional interests of different governments in structuring and managing transnational outsourcing deals.

The delivery of services across borders involves the competing jurisdiction of different sources of law, different legal systems and different laws.   When these legal systems or laws are in conflict, contracts can allocate risks, but only to a limited degree.  There may be a “higher authority” in specific areas of public policy and the law.

This session will review the evolution of “the law” (and sources of law) as a life cycle, the basics of international comparative law, the principles of “conflicts of law” and their impact on structuring and negotiating transnational outsourcing services agreements.   Since each aspect of the transaction might have a different governing law, the session will explain why operations might be structured according to the “real” governing law affecting labor, immigration, taxation, accounting, limitation of liability, intellectual property, privacy, security, consumer protection and unfair trade practices.

Conflicting laws also define the roles of lawyers and consultants as dealmakers.  For outsourcing lawyers and experienced consultants, this session will identify ethical issues affecting the composition and interplay of members of the customer’s outsourcing executive team.  “Clients” will gain a better understanding of hidden constraints upon their advisors.

For outsourcing executives, this session will provide “best practices” insight into avoiding some common pitfalls of international outsourcing.  Customers will learn to identify key local laws that affect the planning process.  Service providers will identify how such laws might impair or improve performance and profitability.   

Key Topics:

• How do different “legal systems” affect your deal?
• The impact of public policy on your contractual choice of law.
• How to deal with conflicts of law in international outsourcing transactions.
• Enforceability and indemnity issues in allocation of responsibility for compliance with laws.
• Ethical rules governing what your lawyers and consultants are permitted to do international transactions.
• How to “act globally, comply locally” in international outsourcing.

The 2003 European Outsourcing Summit

Program At-a-Glance

Speakers are subject to change.