Over the past six months, a spate of multinational companies
have signed global outsourcing contracts for voice and data
services with a single supplier.
Shell,
Tesco and
Procter & Gamble, have signed multi-million pound
outsourcing deals with AT&T, Cable & Wireless and BT to
manage their respective voice and data networks.
The deals mark a turning point for multinationals that are
redefining how they use IT to support doing business in a global
market.
For example, outsourcing the management of a voice and data
network will allow companies to redeploy their IT teams to develop
applications to deliver business value, rather than spending time
on maintenance.
Alan Matula, Shell's chief information officer, which has
outsourced its telecoms and networking function to AT&T for
£800m, says that a desire to focus on development rather than
maintenance was one of Shell's motivations for outsourcing.
"The deal allows Shell IT to focus on information technology
that drives competitive position in the oil and gas market, whilst
suppliers focus on improving essential IT capability," he says.
The expansion of businesses into foreign markets is driving the
need for a common voice and data network to support standard ways
of working. Such networks mean that an office in India, for
example, can run cost-saving technologies such as
voice over IP in the same way as an office in the UK, making a
group competitive at a global level.
"Our aim is to have a common technology platform in tandem with
common business processes so that we remain competitive as a group
as we continue our expansion abroad," says Nick Folkes, IT director
of infrastructure and operations at Tesco, which signed a £100m
deal for Cable and Wireless to become its exclusive supplier of
data and telecom services.
Businesses can also negotiate lower call and data charges with
one supplier or "mega supplier" by handing them over a chunk of
their business rather than relying on multiple suppliers for
different countries, says Partha Iyengar, vice-president analyst at
Gartner.
Procter and Gamble expects that its £650m deal with BT to manage
1,100 locations in 82 countries will be cheaper than having
multiple suppliers.
In light of these business benefits, Iyengar says that
multinationals will continue to sign IT contracts with "mega
suppliers" which deliver value at a global level and move away from
signing siloed, regional contracts for voice and data.
"Chief information officers must understand the future growth
plan of their organisation into many other parts of the world," he
says.
However, moving to a single provider for global voice and data
services means businesses will have to improve their ability to
independently audit billing for items such as call and data charges
at a local level, to verify that the supplier is delivering savings
set out in agreements.
Michael Crouch, global business manager of telecoms outsourcing
at
ABN Amro, which outsourced management of its telecom and data
networks, ensured the accuracy of invoices ABN received from
outsource suppliers by installing a telecoms expense management
system.
The company installed a web-based system using
Invoice Insight software to allow IT managers across the world
to check the company's global bill against country-by-country usage
statistics.
"Building in a telecoms expense management capability helps us
along the life of the contract to make sure we achieve savings," he
says at a networking conference in April.
By 2015, Gartner predicts that organisations, including
governments, will increasingly source their IT from around the
globe without regard to the "country of origin" or "headquarters"
of the supplier. This includes software, hardware,
telecommunications, IT services, or people.