Global chemical company Cibahascut its IT costsby over $15m a
yearafter moving away from producing all IT services
internallytousing a number of
sources.
The savings from the Ciba's first foray into outsourcing - which
took 24 months to complete - equate to about 20% of the costs of
the outsourced services.
Erwin Becher, CIO at the company, said Ciba has moved to a model
that mixes internal and external support from different
suppliers.
"We made the decision to implement a sourcing mix and move from
internal delivery to selective sourcing," he said.
The company, which employs 13,000 people in 120 countries,
identified non-core activities to hand over to external
suppliers.
It uses Unisys to provide and suppport its SAP-based IT
infrastructure,
BT for its
telecommunications, a mix of internal resources and outsourcer
Satyam for its
application development. It works with Dell, Microsoft, SAP and
IBM for hardware and software services.
Ciba transfered 120 people to the service providers. The company
now has 16 people dedicated to
managing the outsourcer relationships. The retained staff spend
half their time managing contracts.
Becher said that, although it was disappointing it took Ciba 24
months to move to a mixed sourcing model, the project now provides
better IT services as well as the cost savings. "We have made the
right decision in defining the sourcing strategy and choosing the
suppliers," he said.
It took 18 months to transfer the communications services to BT
and eight months to move application support to Unisys.
Some parts of the project suffered because the company did not
always use a sourcing adviser, said Brecher.
He warned businesses doing this type of project to make sure
they carry out and complete good due dilligence on suppliers and to
avoid having too many subcontractors.
"The ideal is for the outsourcer to have no or very few
subcontractors. "We want to check out every subcontractor," he
said.