Bundle or Not

8/8/2019 Bundle or Not

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In association withThe Outsourcing UnitLondon School of Economicand Political Science

By Professor Leslie Willcocks and Dr. Ilan Oshri, The Outsourcing Unit,London School of Economics and Political Science, andDr. John Hindle, Accenture

To bundle or not to bundle?Effective decision-making forbusiness and IT services


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As outsourcing has grown overthe past couple of decades into a$300+ billion industry, buyers andproviders alike have learned toincrease the value derived fromthe outsourcing relationship. In itsyouth, outsourcing was primarilya cost play. As outsourcing hasmatured, we are seeing new, morecollaborative engagement modelsthat enable more strategic kindsof business value.

One of the most important current

developments is the move tocombine or bundle multipleprocesses and technologies with asingle provider. A decade or moreago, such a move might have beenlooked at with some suspicion, butcompanies have become awarethat whatever savings they mighthave realized from a multi-sourcingapproach have been more thannegated by the hidden costs of managing an ever-more-complexroster of providers.

Bundling is already deliveringsignificant value for majorcompanies around the world.Unilever, for example, has gainedfrom bundling the managementof its applications and its HRfunctionality. A comprehensive

bundling arrangement at Bristol-Myers Squibbapplicationdevelopment and maintenance,finance, and R&Dhas helped thecompany adjust to regulatory andindustry challenges, and has helpedthe company in its productivityand transformation initiatives.

A bundled approach to outsourcingcomes with its own set of challenges, to be sure. A moreeffective enterprise-level governancemodel is needed, for example,along with advanced relationshipmanagement capabilities. The initialchoice of provider also becomesmore important, tooone that canprovide multiple services. Its alsoimportant to look for a firm that cando things with your organization,not to itone that complementsyour long-term business strategy,

not just the transactional needs of the moment.

This research report is one of thefirst comprehensive analyses of thepotential of bundled outsourcing.It provides documented insightsinto some of the myths and realitiesof bundling, and the factors thatshape sourcing decisions. It alsooffers guidance in structuring thesourcing decision-making processfor best results, and points the waytowards a new model of strategiccollaboration between providers andbuyers, one that has the potentialto drive high performance throughoutsourcing.

Foreword

Kevin CampbellGroup Chief ExecutiveTechnology,Accenture

Mike SalvinoGroup Chief ExecutiveBusiness ProcessOutsourcing, Accenture


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Executive summary

Key findings are:

The maturity of the organization tomanage innovation and suppliers hasa big influence on their ability tocontemplate bundled services.

Clients lack clarity on how to assessgetting value, especially costefficiencies, from bundled services.As result they tend to evaluate basedon function or silo.

Lack of reliable, economically basedreasons push decisions towardsindividual judgement, logic, andpolitical influences.

Organizations mature in theirsourcing strategy and managementcapability are attracted to bundlingwhere they can get innovation and if they can offset risk to, or share riskwith the vendor.

More mature organizations allemphasize that if the relationshipwith a supplier is strong, and it has

performed, the client is more likelyto go for bundled services.Relationships need to be many-to-many between client and supplier

with lots of touch points and glue. Some organizations bundle as start-

ups or to achieve fast change. If they are immature in outsourcingmanagement terms and have poorexperiences subsequently, theymove to multi-supplier sourcing intheir second and third generationoutsourcing arrangements. Some of these organizations look subsequentlyfor supplier consolidation.

Bundling occurs often where thereis a strong and large-scale changeagenda, through peer pressure, orin a belief that, in a recession, withlimited resources available, it willbe cheaper.

A bundled service proposition of anyscale needs a client Board memberdriving it.

Some organizations reach a tippingpoint where the client is likely topursue an add-on strategy, graduallybundling services over time, until

they decide to go for a morecomprehensive bundling strategy.

The paper assesses the myths andrealities inherent in the trade-offsbetween bundling and unbundling.We uncover the key role that 20drivers play when considering bundledor unbundled ITO and BPO services.These drivers are grouped into fiveareas: client factors, relational factors,supplier market and capabilities factors,

and cost effectiveness characteristics,and form the basis of a decision-making matrix designed for client use.From the research we also distill fiveclient profilesStrategic Explorer,Service Extender, Operational ExploiteExperimentor , and Multi-sourcerof those organizations more, or less,likely to buy bundled services.

This paper details the key research findings on the purchasingdecisions clients make on bundling, or not bundling, IT (ITO)and business process outsourcing (BPO) services. We studied

over 1,850 outsourcing contracts, and carried out interviewswith 69 leading clients and suppliers in ITO and BPO services.At the macro level we found IT, IT infrastructure andapplications bundling accounting for over 70 percent of bundling activity, followed by bundled BPO, (for example billing,finance and accounting) representing some 15 percent of bundling activity. As yet we found few clients who outsourcedto the same supplier their main IT together with BPO.


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ContentsIntroduction 5

Market analysis: Bundled ITO/BPO services 2003-2008 7To bundle or not to bundle? Insights for client organizations 8

Assessing the trade-offs: Myths and reality 10

Drivers of bundling/unbundling decisions 12

Action point: Making the optimal decision 16

Emerging client profiles 19

Changing lanes: Building client capabilities for managing bundled services 21

Notes 23

Appendix 1: A note on methodology 24

References 25

About the authors 27


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Introduction

On this definition there can be bundlingwithin IT for example the samesupplier for infrastructure, applications,development; within BPO, for example

training and development and payrollin the HR function; or across ITO and BPO services, for example procurement,IT applications, selected HR activities.The possible choices for bundling areconsiderable, making these complexdecisions, with important cost andservice consequences. In our view,bundling is an important trend thatwill grow considerably in the next fiveyears, as suppliers mature their abilityto deliver bigger scope offerings, andclients develop their ability to plan forhost and manage such deals. How doesbundling fit with the overall trendlines for ITO and BPO?

The global IT outsourcing (ITO) markethas increased each year since wevebeen tracking it. In 2008, the globalITO market was estimated to bebetween a $230 to $250 billion market.

The BPO market in 2008 was less thanthe ITO market, but growing at a fasterrate. We estimate that the market formainstream BPO expenditure is likely

to grow worldwide by 10 percent to20 percent a year from $140 billionin 2005 to over $300 billion by 2012.BPO expenditure will be in areas suchas the human resource function,procurement, back office administration,call centers, legal, finance andaccounting, customer facing operationsand asset management. BPO isoutpacing ITO because many executivesrecognize that they under-managetheir back offices, and do not wish toinvest in back office innovations.Suppliers are rapidly buildingcapabilities to reap the benefits fromimproving inefficient processes andfunctions. IT provides majorunderpinning for, and payoff from,reformed business processes. Thus,many of the BPO deals will swallowmuch of the back office IT systems1.

Although ITO and BPO spend isincreasing, the average size of individual contracts and the durationof contracts has been decreasing. For

example, the Everest Group found thatamong the ITO contracts signed in1998, 24 percent of contracts wereworth more than $400 million and33 percent of contracts were worthbetween $50 and $100 million. In2005, only 11 percent of contractswere worth more than $400 millionand 57 percent of contracts wereworth between $50 and $100 million.Concerning contract duration, theEverest Group found that 37 percentof contracts signed in 1998 were morethan nine years in duration comparedto 18 percent in 2005 2. Into 2009, inrecessionary conditions, we wereseeing more contracts with shorterterms in years, and smaller totalcontract value, more frequentrenegotiation and repricing, and moremulti-sourcing.3 At the same time

We define bundled services as:A mix of business process and/or IT services purchasedseparately or at the same time from the same supplier wheresynergies and efficiencies are sought in end-to-end processing,governance, relationship management, cost and performance.


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many organizations were looking toconsolidate suppliers, and searchingfor cost efficiencies in managementand governance.4

How can we reconcile smaller, shorterdeals with an overall increase in theITO/BPO markets? Undoubtedly manyclient organizations have been activelypursuing more multi-sourcing. Multi-sourcing has always been a majorpractice, and the overall growth isdriven by client organizations signingmore contracts with more suppliers.While multi-sourcing helps clientsaccess best-of-breed suppliers and

mitigates the risks of reliance on asingle supplier, it also means increasedtransaction costs as clients managemore suppliers, interdependencies andinterfaces. Governance, contracting,measurement and comparison becomecomplex tasks.5 Multi-sourcing alsomeans that suppliers incur more

transaction costssuppliers must bidmore frequently because contracts areshorter, suppliers face more competitionbecause smaller-sized deals meansthat more suppliers qualify to bid, andsuppliers need to attract more customersin order to meet growth targets. Giventhese experiences, especially in the2003-2009 period, this suggests thatbundled and unbundled outsourcingproduce different trade-offs that needto be assessed more closely than theyhave been.

In what follows, we analyze, first,the major market developments for

bundled outsourcing, then provide aseries of insights from recent clientand supplier interviews on whenbundling is attractive and feasible.We then look more closely at thetrade-offs and the logic applied to thedecision to bundle or not to bundle tosuggest under what circumstances

bundling makes strategic andoperational sense. We discuss the 20key factors that emerge from ourstudy that determine whether a

bundled or unbundled decision is theoptimal route for a client organization.From this, and as a way of consolidatingthe lessons from the research study,we provide a weighted 20-factorframework to enable clients makemore effective decisions in thisimportant area. Finally, we detail fromour research base five client profiles,distilling the alternative routesorganizations have been pursuing intobundled ITO and BPO services.


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Market analysis:Bundled ITO/BPO services 2003-2008

We have analyzed 865 bundledoutsourcing contracts signed between2003 and 2008 to draw a conclusionabout bundled services market trends,

as described in Table 1. The value of bundled outsourcing contracts signedin 2003 was $US 38 billion. This roseto a peak of $95 billion in 2006 when204 such contracts were signed. In2007 200 contracts were signed at avalue of $46 billion. Clearly bundledoutsourcing is an interesting anddynamic market, with revenues neverless than $35 billion in any one yearbetween 2003 and 2008 6.

When comparing the different types of bundled services, the following markettrends emerge:

1. IO-AO is by far the most popularbundled services between 2003 and2008 (per number of contracts and permarket size).

2. For both AO-BPO and AO-IO-BPOit is more common to have a secondprovider than in the other bundlingarrangements (e.g. IO-AO).

3. The leading industries (i.e. with thehighest number of contracts and totalcontract value) vary depending on thebundling arrangement. Local andfederal government is the leadingindustry in AO-BPO and IO-BPO. It isalso among the leading industries(either 2nd or 3rd) in AO-IO-BPO,bundled BPO and IO-AO. Banking isthe leading industry in AO-IO-BPO andbundled BPO. Health care and process

manufacturing are among the 3 topindustries in IO-AO.

4. The average contract length is76 months, with the varying averagesfor the bundling arrangements asfollows: AO-BPO: 99 months, AO-IO-BPO: 97 months, bundled BPO:77 months, IO-AO: 74 months, andIO-BPO: 90 months.

5. Competitive bid type is by far themost common bidding practice thanany other approach (e.g. incumbent orsole sourced)

Table 1: High level analysis of bundled services contracts 2003-2008

IO=IT outsourcing;AO=applications outsourcing; BPO=business process outsourcing)

Bundle

AO-BPO

AO-IO-BPO

BundledBPO

IO-AO

IO-BPO

#contracts

20

47

127

658

21

%contracts

2.3%

5.4%

14.5%

75.4%

2.4%

Secondary vendor

23.8%

27.1%

11.8%

5.0%

9.1%

Solution area

Applicationmanagement

AM, data centers,various BPOs

Billing, finance andaccounting

AM, data centers

Customer care, billing

Leading clientindustry

Local gov

Banking/fed andlocal gov

Banking/fed andlocal gov

Banking/fed andlocal gov/healthcare/processmanufacturing

Local and fed gov

Clientcharact.

Varies

Varies

Most largefirms

US/UK,varies

Varies

Marketsize

4.5B

17B

21B

149B

3.7B


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To bundle or not to bundle?Insights for client organizations

Insight 1The maturity of the organization tomanage innovation and suppliers has

a big influence on their ability to moveinto bundled services. This was thecase with a major oil company and atelecom multinational, both matureand with their in-house capabilitysorted, and both willing to bundleservices as they felt necessary goingforward. Secure in their own abilityto manage and implement sourcingstrategy, they had high propensity tobuy bundled services if they could findthe right supplier and right risk/reward

deal. Other players that were relativelysmart clientsfor example a globalmail company and a European telecomsfirmrated the relationship dimensionas very high as an attraction intobundled services, but also sawinnovation with a supplier as dependenton their own (client) shaping of thecontext, contract and relationship.

Both still went down the multiple(relatively few) suppliers route butcould see the point of bundling,especially as they were confident of

their own in-house capability to managethat. This needs to be contrasted withanother client who seemed to moveinto bundling because the supplierwas incumbent for consultancyservices, with whom they had a goodrelationship, and felt they did notreally have the capability in-house tomanage multiple suppliers. Also anotherclient organization moved into bundlingbecause of poor governance andlearning capability in-house.

Insight 2We found that clients do not knowhow to evaluate getting value frombundled services. As a result theytend to evaluate based on functionor silo. This is quite an important, if worrying finding. We would suggest

that this inhibits their ability toidentify the value of the bundledservice proposition and pushes theminto uncoupling services and leaves

them open to multiple vendor solutions.Clients need some way to identify indetail the synergies from bundledservices, and how to value thosesynergies. In interviewing one Europeanand one Indian-based major supplierwe found that they also struggled todemonstrate the financial advantagesaccruing from both technical synergies(production costs) and from commonmanagement arrangements (transactioncosts) though could point to how suchfinancial advantages could arise.Clients would then ask: show meactual examples.

Our work has thrown up a range of insights that are useful to

clients considering whether to bundle or not to bundle.


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Insight 3The follow-on insight from the aboveis that as a result, on bundled services,an organization will tend to take aneven more political than economicapproach to decision-making. With nostrong financial support for gains frombundling, other client and relationshipfactors take on much greater weightingin the decision. This is supported byour 20 factor framework detailed below.Of course, if our factor weightingsturn out to be correct, client andrelationship and political factors willalso be key, but this shaping contextwould be greatly assisted if a way of providing reliable economically-basedreasons for bundling services couldbe found.

Insight 4Mature organizations will look atbundling if they can get innovationi.e. they have high ambition in thesesort of dealsand if they can shift riskto, or share risks with, the vendorthey see large vendors as more able toabsorb such risk over long periods of time. The message here to a supplieris to offer both.

Insight 5More mature organizations allemphasize that the relationshipif youknow them well and the track recordis OK to goodyou are more likely togo for bundled services. This was not aprompted response.

Insight 6Some organizations we intervieweddid bundle as start-ups (e.g. a majorAsia Pacific telecom) or to achieve fastchange but were immature in theirability to manage outsourcing and hadpoor experiences subsequently. Oneconsequence was a move to multi-supplier sourcing in their second andthird generation outsourcing

arrangements. All seemed unlikely tomove back to one major supplier, buton the other hand, all worried that,through a combination of poorsourcing strategy and over-reaction,they had commissioned too manysuppliers, and were working onconsolidation and reduction. Thisoffered some scope for bundling,but recognizing that such clients stillrated the importance of retaining asemblance of competition betweentheir suppliers.

Insight 7Bundling occurs often where there is astrong and large-scale change agenda,through peer pressure, or in a belief that, in a recession, with limitedresources available it will provide acheaper alternative.

Insight 8A strong insight from talking to clientsabout how their organizations makedecisions is that a bundled serviceproposition really does need a clientBoard member driving it. The ancillarystrong finding was that the relationship

factors we identified as key (seebelow) received strong independentendorsement but that relationshipsneeded to be many-to-many betweenclient and supplier with lots of touchpoints and glue.

Insight 9One interesting route to pursue furtheris the notion of a tipping point wherea client is likely to pursue an add-on

strategy, gradually bundling servicesover time. What factors create thistipping point? Our weighted 20-factorsframework can be used here to help aclient make decisions (see Table 2).


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Assessing the trade-offs:Myths and reality

Five common concerns emerging fromour interviews were:

ControlDoes multi-sourcing orbundling give you more control? How?

RiskIs going with one supplier morerisky, or less risky?

Incremental or big bang?Should wegrow into bundled outsourcing or canit be done in one deal?

Tidy then outsource?Should westraighten out our technology andprocesses first, or does bundlingobviate this need?

Cost and operational gains?Is there

really a big difference in the costsof management for bundling versusmulti-supplier and silo outsourcing?Does a primary contractor modelsolve the problem?

On control, multi-sourcing may wellgive you more power and more controlover each individual supplier, withless dependence on each. However,

increased control comes at a price interms of increased management cost,time, effort and measurement. At thesame time, an argument can be made

that bundling makes a client largerand more important to a provider, thusmaking the provider more responsive.In multi-supplier environments retainedmanagement capability needed tomanage outsourcing regularly costsbetween 4-10 percent of total contractvalue8. As multi-sourcing governancehas been moving up the outsourcingagenda in the last three years, we areseeing these costs also rise further9.

On risk, there is more risk in dependingon one or two suppliersmuch dependson their capabilities and their financialstrength, for example. However, withmulti-sourcing the risks move intoother areas, including cracks betweenservice, security issues, hidden costswith continued monitoring and renewalof contracts, and possible replacement

of suppliers. One must also ask howbig the risks are with bundling or notbundling relative to the other risks abusiness will take in its main line of

operations. In other words, often anorganization will often imposeinconsistentlya higher standard of risk for a back office deal than evenfor a strategic business initiative.

On incremental bundling, we foundmany organizations taking this routeover time, but we also found severalorganizations gaining from making amajor one-off bundling deal, thoughthis was a relative rarity when it came

to complex BPO arrangements (seeTable 1). As we indicate elsewhere inthis paper, much depends on theability of both the client and supplierto manage such arrangements andsuch capabilities are not yet commonlyheld. A related approach that we haveseen in organizations is where theyhave straightened out their own IT

This is an assessment, based on our findings, of the common

trade-offs clients consider and how far these trade-offs arebased in reality.7


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and/or business processes first,sometimes through a shared servicesroute, then sought a bundledoutsourcing arrangement. This is a

more tactical route and mitigatessome of the risk of outsourcinginefficient IT and processes, thoughthe risk may well be worth taking, if it saves time and cost, as we saw insome cases. On cost, the cost gainsof bundling two or more businessfunctions, for example IT and HR,or procurement and HR, rather thanoutsourcing them separately todifferent suppliers can be of the orderof 10-15 percent 10. This may well bemore where a supplier can bring in amore standardized management andmeasurement process, and can trulyimplement standardized businessprocesses and IT. A primary contractormodel can be a half-way house but itis unlikely to achieve significant costsavings or process standardization orinnovation over a bundled outsourcing

The major advantages experiencedwith bundling included:

Simplifies and expedites procurementand contracting (sole-source v.tendering)

Simplifies the governance process

Reduces duplicate managementlayers, processes, and costs

Reduces operating risk by limitingpoints of failure

Can achieve operational synergiesacross business processes andbetween a business process andsupporting IT

arrangement. The primary contractormodel also runs its share of risks andhas not always had a happy history11.

However, this does not make bundledoutsourcing a no-brainer. Far from it.These gains from bundling (see Whendoes bundled outsourcing makeoperational sense? above) are possiblebut a great deal really does depend onthe maturity and capabilities of bothclient and supplier to deliver on thepromises inherent in the bundling dealthey go for. Given this, then it is notsurprising to find clients display arange of profiles when it comes to

bundled outsourcing.

Standardizes and simplifies operations

Mitigates delivery risk throughsimplified points of contact

Reduces service provider costs/pricesthrough simplified management andscale economies

Supports a pre-existing standardizingtechnology and process trajectory. Aprime example is with ERP

Can drive larger holistic back-officechange

When does bundled outsourcing make operational sense?


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Drivers of bundling/unbundling decisions

From our [e.g., LSE] database of 650plus outsourcing arrangements weselected 300 deals where there wassufficient data to draw conclusions on

all 20 factors. We established, throughpiloting ten deals, that a total scoringof 100 seemed to work. Using this asthe total 20 factor score we workedthrough each deal. Each factor wasweighted in importance in that deal.For the whole 300 sample we thenfound the median for each factor (seealso Appendix 1Note on methodology).We then tested the factors frameworkagainst our 69 interviewees andfinalized a weighted 20 decision factorsframework (see Table 2)12.

Figure 1 shows that the key factorsshaping bundling and unbundlingdecisions group into five major areas.Let us look at each of these in moredetail.

Client factorsThere are eight such factors. Theircombined weighting of 40 indicates

client factors to be the most influentialof the five groupings shown in Figure 1.The first factor is whether the decision-making process is centralized ordecentralized. A more centralizedprocess favors a bundled servicedecision. It is interesting to note thatorganizations that multi-source wrestlecontinually with the issue of needingto simplify and coordinate governanceand decision-making, but whiledecision-making processes remain

more fragmented, bundled servicedecisions, especially across ITO andBPO, are unlikely.

Who the main decision-makers andinfluencers are in the sourcingdecision, and their preferences, havea considerable role to play in whatdecisions get made. Is procurementin charge, what is the influence of

advisers and their recipes, how CEO,CIO and COO knowledge andpreferences play outthese are difficultto predict and need close attention

to understand. But key influencerpreferences are important in shapinga dominant coalition in favor oragainst a degree of bundling services.

Thematurity of an organizationsability to develop sourcing strategyand manage suppliers, its history of success, learning, and of requisitecapabilities builtthese all influencebundling decisions. Mature clients arein a better position to undertake a

bundled services option. But a strongpreference for competitiveness amongsuppliers, and question marks onsupplier capabilities can also leadmature clients to adopt a best-of-breed strategy. On the other hand wehave examples of clients with limitedresources or weak learning capabilitiesalso going for single source contracting.

We analyzed prior literature drawn from strategy, economics,marketing, information systems, and our own research work.We also placed our preliminary model in front of outsourcing

specialists to gain further feedback. From this we arrived at aprovisional list of factors. For each factor, from prior research,we established the rationale as to why each factor wouldinfluence buying behavior. At this stage we called each rationalea hypothesis, indicating that it required further testing.


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Organizational and technologicalfactors also have a bearing onbundling decisions. These relate tosize, infrastructure, interdependence

of activity, degree of reliability,transparency of information needed.Large size, high complexity, highinterdependence of activities, and highreliability needs will favor longer-termbundled service contracts. Organizationsneeding technological integration andseamless information and technicalservice will prefer to go for bundledservices, where available.

Business profile, and the existence of

a burning platform may well work infavor of a bundled decision. A businessdoing badly, or needing to do somethingdifferent, may well see bundled servicesas a cost-driven, low managementsolution. But we also found also large,well performing firms tending to buybundled services, where other factorswere favorable. A burning platformwe found examples relating to cost

reduction, a new CEO/CIO, a changein business strategy, or in acquisitionpolicymay well favor a bundlingdecision.

Heavy users and high spenders onoutsourcing will tend to considerbundled services. A further factor weidentified related to risk attitude. Organizations with a high riskperception concerning IT or back-office back up, security, complexitytend to favor bundled services.

Relational factors

We identified three sets of relationalfactors, scoring them a combinedweighting of 12. Culture whetherclients were transaction-orientated orrelationship orientated had a role toplay here. For example the USA andUK tend to be more transaction-orientated than South Korea andScandinavian countries. Other thingsbeing equal, relationship-oriented

cultures will favor service bundling.Prior relations between client andsupplier, especially where the supplierhas had good communications with

a clients dominant coalition, caninfluence clients propensity to contractfor bundled services. However, moreinfluential is where relationships weredeveloped as an incumbent supplier. Strong relationships as an incumbentwhere combined with a track record ofservice delivery, inclines a client tooutsource more services to theincumbent supplier.13

Client market forces andcharacteristicsWe gave a combined weighting of 10to four factors under this heading. In ahighly regulated environment the strongrequirement for regulatory compliancewill favor bundled decisions, on thewhole. Bundled services will lowercomplexity, especially if the supplier

Figure 1: Main factors in bundling/unbundled outsourcing decisions

Source: Willcocks, Oshri, Hindle, 2009.

Clientpropensity

Client factors40 percent

Supplier andoutsourcingmarketcharacteristics18 percent

Client marketforces andcharacteristics10 percent

Relationalfactors12 percent

Cost

effectivenessfactors20 percent


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offers assistance with regulatorymandates. Geography can have aneffect. Bundled service options are morelikely to be taken up in the lead markets

of the USA and UK, perhaps cancellingout their transaction-orientated cultures,but more relationship-orientatedcultures not in USA and UK could nowstart to grow faster into bundling. Wefound strong propensity amongst largecompanies in Norway and Netherlands,for example, and also in South Korea.Additionally bundling is favored byorganizations requiring a higher levelof innovation from a supplier. Here,bundling is the quid pro quo to thesupplier for its innovation investmentand its provision of more integratedservices. There is alsosector influence. For example telecoms, manufacturingand utilities sectors take the lead onbundling, especially where a firm isbased in a single region and is largebuyer. Some sectors prefer industryverticals for example UK military

logistics in 1990s. Thus certain sectorsare to be found creating a momentumin favor of, or against, bundling.

Supplier and outsourcingmarket characteristicsHere we identified four factors, witha combined weighting of 18. Initialchoices and incumbent vendors shapefuture bundling incumbency andcapability to do other services leadto client propensity to given thembundled services. This goes beyond therelationship effect mentioned above.Incumbents with additional capabilityshape bundled services strategy andstand to gain from these. Reinforcingthis finding, a 2007 Everest ResearchInstitute survey of BPO scopeaggregation found that if a buyerinitially selected a generalist supplier,40 percent of the time the buyer willselect the same supplier for otherfunctions.14

Part of this incumbent advantagerelates to demonstrable additionalcapabilities. Indeedprovider capabilities are a bigger influence than mere

incumbency. Here clients look for asupplier that is widely capable acrossdifferent services and able to use IT ineach, offers a wide scope of servicegeographically, and can deal with largecontract size. The few suppliers thatcan service large scope, bundled dealswill be prioritized, but there is acaveata limited number of supplieroptions may also inhibit bundledservice decisions.

We identified two lesser factors underthis heading. Where a supplier offeringis of interdependent services then alock-in effect can occur, where theclient is more likely to buy the combinedservice, already integrated, as bundledservices. Finally, external media attentiongiven to bundled services can create abandwagon effect, increasing a firmspropensity to look for bundled services.


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However, this effect can be short-livedif performance does not improve andshould suppliers fail to developdependencies between bundled services,

and deliver on their promises.

Cost effectiveness factorsThe area of cost is weighted 20 out of 100. Cost emerged as a constant keyconcern in our research, and receivedeven more emphasis in the 2008-9interviews. In particular two types of costs emerged from the study, namelymanagement and integrated servicesefficiencies. As we discussed above,management and transaction costsshould be demonstrably lower, andintegrated service efficiencies muchmore achievable with bundling of services.

From a client perspective we suspectthe transaction cost saving frombundled service purchase are largebut hidden. They include typically:

Risk reduction Less governance Simpler contracting (cheaper legal

costs) Ability to move to standardized

practices Synergies across services and processes Less management time getting to

contract Lower relationship management costs

It is possible that the transaction costsavings between a single and multiplesupplier route may be substantialenough to offset where a single suppliermight offer a less attractive deal onproduction costs, but it is likelyif thesupplier is instituting the practiceslisted belowthat these will also belower anyway.

Most large suppliers are now busyreducing their internal transactioncosts (the costs of doing business withthemselves), and their production costs

through focusing on standardizing as ashared service across all processes, thecustomer contact part of a process theyrun for a client, and likewise for its

administrative back-end e.g reporting.This leaves the middle sections of aprocess which tend to be more domain-specific e.g procurement or sub-components, HR (recruitment, trainingremuneration) and here the idea is tostandardize for the client globally onthe relevant process and charge theclient for idiosyncrasies away fromthat standardized process. This thenenables the supplier to provide astandard contract for all standardizedshared services (but not necessarilythe domain specific ones). Obviouslythe reduction in both transaction andproduction costs is large if this can beachieved across a clients several IT/BPactivities. The size of this gain as passedon to the client will be one attractiveaspect of bundled service purchase.


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Action point: Making the optimal decision

This observation applies equally wellto decisions on bundled/unbundledservices. Organizations have pursued,and will continue to adopt, multi-

sourcing and best-of-breed strategiesand will find plenty of good reasonsfor doing so. However, the market hasmoved on, technologies have developed,client and supplier capabilities havegrown apace and new possibilitieshave opened up. One important growingtrend, containing several mini-trendswithin it, has been the bundling of ITO and BPO services. Under whatcircumstances can a client takebusiness advantage of this rising setof capabilities? What sort of client islikely to gain from bundling ratherthan unbundling? And what sort of client is better suited to multi-sourcingapproaches? In Table 2 we provide asummary of our research, and a decisionmatrix for client use.

How to use the decisionmatrix

Your evaluation is based on five sets

of factors. Each set is weighted, withthe sets combined forming a totalpossible score of 100. The factors andweighting are:

1. Client factors 40

2. Relational factors 12

3. Client market forces andcharacteristics 10

4. Supplier and outsourcing marketcharacteristics 18

5. Cost effectiveness factors 20Total 100

Step 1The unit of analysis is a group of services that an organization is wishingto outsource. For example, this couldbe HR payroll, related IT applications

and HR training and development.Should these be bundled and outsourcedto one supplier, or left unbundled andoutsourced to several suppliers?

Each factor has a group of factors hasan individual weighting as indicated.

An informed stakeholder discussiongroup should assess carefully theappropriate score for each factor group.If a supplier really can support bundlingthen score it 9 or 10; otherwise makea judgment as to what the suppliercan support, and score it to suit. As afinal example, under Cost EffectivenessCharacteristics, does bundling lead todemonstrably lower management andtransaction costs? If so, score thisfactor between 7-10. If not score itlower than this to suit.

There is a surprising thing in mathematics. In a multi-variateproblem, the optimal result is often reached with none of thevariables at its maximum value.15


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Table 2: To bundle or not to bundle outsourcing servicesThe decision matrix

Risk attitude to back-up, security, complexity

Lock-in through supplier services

PossibleUnlikely

If demonstrably lower Yes

20. Management and integrated services efficienciesManagement and transaction costsIntegrated service efficiencies

Cost effectiveness factors (weighting 20)

Likely if performances do notimprove and if suppliers fail todevelop dependencies betweenbundled services

Likely19. External media and bandwagon effect

High media attention on bundled services

Less likelyMore likely18.

Supplier offerings as interdependent services

Concern over too few suppliers Yes

Yes Yes

17. Provider capabilitiesWidely capable across different services

Able to use IT in each scope of service geographicallyCan deal with large contract size

Poor recordNo strong additional capabilities

Incumbent vendor with additionalservices and integration capabilities

16. Initial choices and incumbent vendors shape future bundlingSupplier and outsourcing market characteristics (weighting 18)

PossibleLikelyPossiblePossible

LikelyPossibleLikelyLikely

15. Sector influencee.g. telecoms and utilitiese.g. retaile.g. high preference for industry verticalse.g. high competition intensity

Low innovation requiredLow integration

More supplier investmentMore integrated services

14. Level of innovation required

More likelyMore likely13. Geographyadvanced market

e.g. USA and UKe.g. North and South Europe

If no complexity reductionIf no supplier help

Reduce complexityIf supplier assistance

12. Strong regulatory compliance needsClient market forces and characteristics (weighting 10)

WeakPoor record

Strong relationshipsTrack record of service delivery

11. Relationships/performance as incumbent supplierLess likely Very likely

10. Prior relational aspects: client and supplierStrong relations between senior managements

ProbablyLess likely

Less likely Very likely

9. CultureTransaction-orientated e.g. UK, USARelationship-orientated e.g. South Korea

Relational factors (weighting 12)

Perception of low riskPerception of high systemic risk8.

No Yes7. Heavy users and high spenders on outsourcing

UnlikelyPossible

YesLikely

6. Business profileBusiness doing badly/Need to do something differentLarge, well performing firm

NoPossiblyPossiblyUnlikely

YesPossiblyLikely

Yes

5. Burning platformCost crisisNew CEO or CIOAcquisition/mergerNew consolidation strategy

SmallLowLowLowLowLow

LargeHighHighHighHighHigh

4. Organizational and technological factors

SizeComplexityInterdependent activitiesReliability needsTechnological integrationSeamless information/technical service

Best-of-breed if desire for vendorcompetition

Yes3. Maturity of company with outsourcingi.e. history of success/learning, internal capabilities built

PossiblePossible2. Dominant coalition preferencesi.e. procurement, COO, CIO, CEO, advisors

DecentralizedCentralized1. Decision-making processTend not to bundleTend to bundleClient factors (weighting 40)


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Step 2Having scored each factor, total thescores to make a single score out of 100.

Step 3See Table 3. A score between 66 and100 means that the organization ispast the tipping point for bundling,and should certainly make a bundled decision for the services underconsideration. A score between 0and 33 is past the tipping point forunbundling and means that anunbundled decision is the right one.Scores between 34 and 65 need muchfurther analysis. A score between 34

and 50 suggests unbundling is the rightway to go but, you need to assesswhich factors need to be leveraged tomake this a good decision, and performa risk assessment of the consequencesof leveraging these factors. Alternativelya score between 51 and 65 suggestsbundling is a better decision but onlyafter further assessment, leveraging

salient factors, and ensuring that therisk profile of the consequent decisionis sensible.

While this analysis is at the level of several services, we also found fivetypes of clients, each type tending tobe making bundled or unbundleddecisions (see Table 3). The nextsection develops Table 3 and providesdetails of these five types of clientorganizations.

Table 3: Sourcing factor analysisUnbundle

0 33Tipping point (UNB)

50 66Tipping point (B)

100

Bundle

Quick scanscore

Decision

Organizationtypology

Yes Yes

Proceed1. Re-run the analysis; confirm results2. Identify variables susceptible to influence3. Perform risk assessment

Proceed

Tendingtowardsunbundling

Tendingtowardsbundling

Multi-sourcerorExperimenter

StrategicExplorer

OperationalExploiter Service Extender

Action


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Emerging client profiles

The Experimentor typeThe Experimentor type has just got onthe learning curve with outsourcing,

therefore its outsourcing managementcapabilities are underdeveloped, andare based on sporadic experimentationwith various sourcing models andsettings which addressed some specificneeds. In most cases, these are smallscale outsourcing contracts coveringlow value, stable services. At the sametime its lack of experience can resultin the Experimentor making sometimesquite serious mistakes in outsourcingrisky, or critical areas to the wrong

vendor(s) on poor contracts. TheExperimentor type tends to switchbetween vendors and sourcing settingsin a continuous search for superiorperformance. Bundled services is justanother value proposition in this regard.As the Experimentor types approach isneither strategic nor operationalitsphilosophy is This could be gold.

The issue for the Experimentor type isits under-developed internal outsourcingmanagement capabilities, making itunable to manage large-scale

contracts, form strong relationshipswith suppliers or assess the economicsof different outsourcing models. Thismay well be combined with anunderstandable orientation amongstdecisions makers and influencerstowards risk mitigation through multi-sourcing, shorter term contracts, and abest-of-breed approach to suppliers.Experimentors were much more frequentin the period 1992-2003, but in ourmost recent sample, only a smallnumber of firms demonstrated thisprofile of behavior.

The Operational ExploitertypeThe Operational Exploiter has verylikely developed good outsourcingmanagement capabilities focused on

the daily operational aspects of managing individual outsourcingcontracts through SLAs but less on thelong-term, strategic, innovative and

relational aspects. The OperationalExploiter will have developed routinesand practices to ensure the deliveryof value from each single outsourcedservice, but will be less aware of orconcerned with synergies betweenthe various outsourced services. TheOperational Exploiter tends to outsourcemainly low value but also some highvalue activities and has experimentedwith both single and multi-vendorsettings. Bundling outsourced serviceswould become an option when moreand more services are outsourced andwhere potential operational efficienciesstart becoming self-evident. TheOperational Exploiter may be aware ofthe synergies between the outsourcedservices, but less able to extract valuefrom these synergies mainly because itsoutsourcing management capabilities

Our analysis included generating client profiles of thoseorganizations more, or less, likely to buy bundled services.Five client profiles emerged:

1. The Experimentor type

2. The Operational Exploiter type

3. The Multi-sourcer type

4. The Service Extender type

5. The Strategic Explorer type


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have been focused on extractingvalue and efficiencies from individualcontracts, and because it lacks theability to assess the business impactof synergies between individualoutsourced services. Its approach tobundled services is I should outsourceanother service because there arecost advantages and efficiencies inbundling this service with the others.Some of the firms we studied havefocused on developing operationalexcellence around the management of outsourcing, which in turn drives theirvendor selection. In such cases theservices to be outsourced and managedhave been geared towards what wehave titled here as operationalexploiter.

The Multi-Sourcer typeTypically, the Multi-sourcer type hasbuilt a strong capability to managemultiple suppliers, and is into its thirdgeneration of outsourcing contracts.Its dominant coalition favors bothoutsourcing, which it does extensively,and also a best-of-breed strategy,which it manages tightly, in an alignedway with business strategy, and with

strong governance mechanisms inplace. The Multi-sourcer tends tooutsource in ways which keep low theswitching costs in and out of differentsuppliers, while retaining advantagesfrom keeping suppliers in competitionfor work. The Multi-sourcer will readilyincur the management and transactioncosts required to maintain this multi-supplier strategy, though it works hardto continually reduce these costs. Theorganization may well be large and in

parts complex, but does not have highneeds for reliability, interdependence,seamless service and technologicalintegration, or manages these aspectsitself, or is willing to manage the gapsbetween supplier service and what isrequired on these aspects. Where aMulti-sourcer achieves integrated

service cost efficiencies, this will bebecause it manages and runs theseitself. A Multi-sourcer tends to lookto itself for innovation rather thanthrough relationships with a vendor,though more recently Multi-sourcershave been looking for closerrelationships with, and more valuefrom, their longer-serving suppliers.

The Service Extender typeThe Service Extender type has beenoutsourcing for a while; however, thistype tends to work with one vendor ora very small number of vendors. Itsoutsourcing management capabilitieshave been developed mainly based onlong-term relationships with one or avery small number of service providers.For this reason, bundling services isthe next logical step in the outsourcingactivities that the Extender type haspursued. Its approach to bundledservices is it is only making sense tooutsource another service to myservice provider. In other words theExtender moves further into bundlingservices through an incremental add-on strategy, as it builds its internalcapability to manage suppliers,

strengthens relationships withincumbent suppliers, and satisfiesitself that supplier capabilities meritextending both contract length andscope of work. An Extender buyer willhave a dominant coalition favoringsupplier consolidation, and willrecognize that its size, complexityand interdependence of operation iscontinually pointing towards the needfor reliability, technological integration,and seamless service. An Extender

buyer will also be looking to outsourcemore IT and business processes in thefuture, though it may not be primarilyfocused on the cost advantages of bundling rather than unbundlingspecific services. Instead, an Extendertype will be concerned about becomingmore strategic in its approach to use

of the market and aligning its sourcingapproach with the firms businessstrategy Quite a few of the cases wehave studied fell into this category.

The Strategic Explorer typeThe Strategic Explorer possesses highlydeveloped outsourcing capabilities inmost areas critical for successfuloutsourcing projects such as vendorselection, relationship management,vendor management, domain expertise,learning capabilities, all of whichdeveloped through scale and advancedmanagement systems. The StrategicExplorer outsources both low-valueand high value activities in both singleand multi-vendor settings, is confidentin its ability to enter a large bundledservices contract mainly because of its strong retained organization andhighly developed domain expertise.This type will expect innovation fromthe vendor and the ability to realizesynergies between the different servicesoutsourced. The Strategic Explorer willbe able to assess the degree to whichsynergies between the differentservices have been realized and willaspire systematically measure these

outcomes. Its approach to bundledservices is My vendor and I can improvemy value proposition only when weinnovate across my end-to-endservices. In our sample, we found thatsome firms are thinking strategicallyabout bundled services; however, theymay fail to design and implement asystem that leverages the potentialvalue across the range of services.


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21

Changing lanes: Building client capabilitiesfor managing bundled services

Our analysis demonstrates that manyclients have not sufficiently developedtheir outsourcing managementcapabilities to realize the synergies

and efficiencies offered by bundledservices. As discussed above, none of the firms studied have, to date,managed to develop an ideal StrategicExplorer profile, though some havebegun to move in that direction. Mostof the firms have developed theiroutsourcing management capabilitiesto correspond with the OperationalExploiter or Extender type. At thesame time the Multi-sourcers in oursample revealed a strategic sourcingapproach that worked for them, basedon their assessment of the limitedcapabilities suppliers were offering inthe marketplace, the need to engendercompetition amongst suppliers, theadvantages of retaining considerableinternal capability, and their ownspecific needs that would not necessarilybe served by bundling certain services.

While all the types (save Experimentor)present viable outsourcing strategiesfor organizations, depending on theirculture and dominant corporate

governance model (e.g., centralizationv. decentralization), for companiesthat would consider pursuing bundledservices as a strategic approach, weoffer the framework shown in Figure 2.For those organizations that wish, andhave strong rationales for, retaininga Multi-sourcer stance, therecommendation is to still improvetheir management and strategicsourcing capabilities.

In examining the primary buyertypes, there are two areas needingdevelopment within the firm in order tocapitalize of the promises of bundledservices. One is the strategic sourcingcapabilities developed in-house, mainlyfocusing on aligning sourcing strategywith dynamic business strategy overa five-year period, and creating the

conditions for partnership with thevarious vendors. The second area issourcing management capabilitiesfocusing on extracting efficiencies,

building management capabilities, anddeveloping tools and methodologiesto realize the potential in strategicallypartnering with vendors. On ouranalysis, most of the firms identifiedas Operational Exploiters are wellpositioned to improve the benefitsfrom bundled services by furtherinvesting in relational capabilities andvendor development. Firms identifiedas Extenders are even more inclinedtoward bundling and will be evenmore willing to make the necessaryinvestment in strategic sourcing andsourcing management capabilities.But Experimentors require massiveinvestment in both areas, and thereforeshould first assess whether bundledservices is a strategic direction theyneed to take.

Figure 2: Developing bundled services client capabilities

Sourcing managementcapabilities

Strategic sourcing capabilities

Experimenter

OperationalExploiter

Service Extender

Multi-Sourcer

Strategic Explorer


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In Figure 2 we map the developmentpath emerging from our research. TheExperimentor tends to move towardsbeing an Operational Exploiter. Its

hard-won experience leads it to take amulti-supplier route, outsourcingrelatively stable, mature activities on3-5 year contracts. It has learned tomitigate operational risk withoutsourcing, and will look to build upits sourcing management capabilitybut will not focus strongly on buildingstrategic sourcing capability. TheOperational Exploiter will tend todevelop that strategic sourcingcapability based on its heritage inmulti-supplier outsourcing and willtend to evolve into a Multi-sourcer.A Service Extender has a differentheritage and more strategicunderstanding. Improvement lies inevolving towards the Strategic Explorerprofile. Multi-sourcers have a hugelearning and capability investment in

a multi-supplier approach but, becausethey have strategic sourcing insight,may well see the advantages of bundling some services where they

identify that suppliers have the requisitecapability, the technology has developedto support integration of services, theycan see a strong economic rationale,and they feel confident that reducingsupplier numbers will not lose themcontrol of their sourcing arrangements.


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Notes

1 Willcocks, L. and Lacity, M. (2009)The Practice of Outsourcing: FromInformation Systems To BPO and Offshoring. Palgrave, London. Chapter1 reviews trends and statistics.2 See Tisnovsky, R. (2006) ITOutsourcing in SME Businesses,Everest Research Institute White Paper. See www.everestresearchinstitute.com.3 See Lepeak, S., Toon, M. and Morris, P.(2009) Equaterra Pulse Survey Period 4, 2008. Equaterra, London

4 Willcocks, L. and Lacity, M. (2009) op.cit.5 Ways of managing multi-supplierrelationships are suggested by Sharma,A. (2008)Challenges with Multi-sourcing. IDC, New York. Simonson, E.(2008) Managing Multiple Outsourcing Relationships. Everest Research Institute,New York. These focus on developingsimpler, enterprise governancemodels, supplier portfolio strategies,

strengthening internal managementcapabilities and applying multi-sourcingto mainly commoditised services. Seealso Willcocks and Lacity (2009) op.cit. and Lacity, M. and Willcocks, L.(2001) Global Information Technology Outsourcing: In Search Of Business Advantage. Wiley, Chichester.6 Raw data on these outsourcing dealswas collected by IDC. Analysis was byJohn Hindle and Ilan Oshri.

7 This section was strengthened byconversations with Martin McPhee,Simon Sammons, Barbara Duganierand Charles Sutherland of Accenture.Their perspectives and sharing of experiences were very helpful andwe gratefully acknowledge theircontribution.

8 Willcocks and Lacity, M. (2006)Global Sourcing of Business and IT Services. Palgrave, London. Our morerecent analysis finds these managementcosts for offshoring to be even higherto be between 12-15 percent of totalcontract value. See Willcocks andLacity (2009) op. cit.9 Lacity, M. and Willcocks, L. (2009)Information Systems and Outsourcing: Studies in Theory and Practice. Palgrave,London

10

This figure comes from a reportby Equaterra (2005)Bundled versus Unbundled Outsourcing Deals. Equaterra,London September.11 Lacity and Willcocks (2001) andWillcocks and Lacity (2009) op. cit.point to cases where managementcosts were not noticeably lower thanother models, and best practices werenot shared between the differentsuppliers.12

It should be noted that the finalweightings represent the collation of

judgments, and that for each weightedfactor the median expresses themiddle value. In such a large samplewe found many cases where certainfactors outweighed others in differentways than the ones expressed here(note that the median tends to bemore robust than the mean in thepresence of such outlying values).13

From a 2007 Everest ResearchInstitute private analysisScope Aggregation in Outsourcing: Why the Strong Get Stronger.

14 Clearly the first outsourcing decisionsand who the incumbent suppliers arecan have considerable affect onsubsequent bundling patterns. Froma 2007 Everest Research Instituteprivate reportScope Aggregation inOutsourcing: Why The Strong Get Stronger. Everest call this thepenetrate and radiate model.15 Our thanks to Simon Sammons of Accenture for this observation.


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Appendix 1:A note on methodology

Our review of extant researchexamined firstly a number of reliablethird party databases comprising some1200 outsourcing deals (including 865

bundled contracts) signed globallybetween 2003 and 2008. This existsas a listing of headline characteristicsof these deals and gives insight intopropensity to buy bundled services atthe level of who is buying, what theyare buying, where these services arebeing delivered, and who is deliveringthose services. We also reviewed theexisting ITO and BPO literature from1990-2008. Virtually none focuseson client propensity to buy bundledservices. But there are major studieson determinants of outsourcingdecisions, goals sought from outsourcingand sourcing strategies pursued duringthis period. These provided insight intobuying behavior, outcomes, and howthese affect subsequent buyingpatterns. Our own research in ITO andBPO from 1991-2009 was also reviewed,

including recent studies into BPO,offshore outsourcing, the configurationof outsourcing arrangements andobjectives pursued by clients. This

database consists of 650 plusoutsourcing arrangements. We alsoreviewed the marketing literature toseek further insight on factors thatexplain the purchasing of bundledservices. We developed two deliverables.Firstly, a provisional model of theweighted factors that need to beinvestigated to establish outsourcingpurchasing behavior, with the specificpurpose of attempting to identifywhich factors can explain propensityto buy bundled services either as ITObundles, BPO bundles, or ITO/BPOhybrid bundles. Secondly, we developedan open-ended questionnaire for usingwith interviewees at organizations thatdo buy, or potentially will buy bundledservices, to determine the key factorsfor them.

For this paper we then conducted 54further interviews with 32 clientorganizations of ITO and BPO servicesin USA, Europe and Asia Pacific. This

sample was opportunistic and gaveinsights into a range of sectors andcultures including energy, mining, retail,oil, insurance, telecoms, ICT services,gaming, utilities, financial services,manufacturing, healthcare, partsdistribution, mail and communications,We also interviewed a further 15outsourcing experts drawn from threemajor suppliers, including Accenture.The analysis of the interviews providedinsights into buying practices, helpedus to refine the weighted model of client propensity to buy bundledservices in the ITO/BPO space, anddevelop the five major client profiles.


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Risk Mitigation,Information Systems Journal, Vol. 8, 2, pp. 119-143.

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The most recent comprehensive studies, that include details of the authors research bases, are:

Oshri, I., Kotlarsky, J. and Willcocks, L. (2009)The Handbook of Global Outsourcing and Offshoring. Palgrave August.

Lacity, M. and Willcocks, L. (2009).Information Systems and Outsourcing: Studies In Theory and Practice. Palgrave, London.

Willcocks, L. and Lacity, M. (2009)The Practice of Outsourcing: From Information Systems To BPO and Offshoring. Palgrave, London.


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Farag, N., and Krishnan, M. (2003),The Market Value of IT OutsourcingInvestment Announcements: An Event-study Analysis,Proceedings of the 9thAmericas Conference on InformationSystems, pp. 1623-1629.

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Analyzing IT Outsourcing Relationshipsas Alliances among Multiple Clientsand Vendors,Proceedings of the 32nd Annual International Conference onSystem Sciences, Hawaii, pp 1-15.

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Dr. Leslie P. Willcocks is recognizedas one of the worlds leading expertson outsourcing. He is Professor of Technology Work and Globalization

and Director of the newly establishedOutsourcing Unit at London Schoolof Economics and Political Science. Heis also Associate Fellow at TempletonCollege, Oxford, holds several chairs atmajor universities, and has been forthe last 19 years Editor-in-Chief of the Journal of Information Technology. He is co-author of 33 books includingmost recently Information Systems and Outsourcing: Studies in Theory and Practice (Palgrave, 2009) andThe Practice of Outsourcing: FromInformation Systems to BPO and Offshoring (Palgrave, 2009). He haspublished over 180 refereed papers in

journals such as Harvard Business Review, Sloan Management Review,California Management Review, MIS Quarterly, Journal of Management Studies and Journal of Strategic....

Dr. Ilan Oshri is Associate Professor of Strategy and Technology Managementat Rotterdam School of ManagementErasmus, The Netherlands. Ilan holds a

PhD degree in Strategic Managementand Technological Innovations fromWarwick Business School. He is theco-author of three recent booksHandbook of Global Outsourcing and Offshoring (Palgrave, 2009),Knowledge Processes in Globally Distributed Context (Palgrave, 2008),Standards-Battles inOpen Source Software (Palgrave, 2008)and is co-editor of Outsourcing Global Services (Palgrave, 2008). His work hasappeared in leading academic journalsincluding Communications of the ACM,MISQ Executive,and Journal of Strategic Information Systems, and also in tradepress and numerous books. Ilan is theco-founder of the Global SourcingWorkshop and an associate member of the Outsourcing Unit at the LSE.

Dr. John Hindle is Senior Manager,Outsourcing Marketing, Accenture.His responsibilities at Accenture includemanaging research and thought

leadership programs, industry events,and relationships with Europeanindustry analysts and sourcing advisersHe also serves as Vice-Chairman of theHR Outsourcing Association (HROA),Co-Chairman of HROA Europe, andholds appointment as AdjunctProfessor of Human and OrganizationaDevelopment at Vanderbilt University.John has an extensive internationalbusiness background, with over 30years experience as a senior executiveand adviser to companies in the USand Europe, and has published widelyin trade, practice, and academic media.

About the authors

27


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Accenture is a global managementconsulting, technology services andoutsourcing company. Combiningunparalleled experience, comprehensive

capabilities across all industries andbusiness functions, and extensiveresearch on the worlds most successfulcompanies, Accenture collaborateswith clients to help them becomehigh-performance businesses andgovernments. With 178,000 people in49 countries, the company generatednet revenues of US$19.70 billion forthe scal year ended Aug. 31, 2007.Its home page is www.accenture.com.

Copyright 2008 AccentureAll rights reserved.

Accenture, its logo, and

High Performance Deliveredare trademarks of Accenture.

Whats next?To learn how Accenture can help yououtperform, reach us at www.accenture.com/

InfrastructureOutsourcing.

Copyright 2009 AccentureAll rights reserved.

Accenture, its logo, and

High Performance Deliveredare trademarks of Accenture.

About AccentureAccenture is a global managementconsulting, technology services and

outsourcing company. Combiningunparalleled experience, comprehensivecapabilities across all industries andbusiness functions, and extensiveresearch on the worlds most successfulcompanies, Accenture collaborateswith clients to help them becomehigh-performance businesses andgovernments. With approximately177,000 people serving clients inmore than 120 countries, thecompany generated net revenues

of US$21.58 billion for the fiscalyear ended Aug. 31, 2009. Its homepage is www.accenture.com.

About the OutsourcingUnit, London School of Economics and Political

Science (LSE)The Outsourcing Unit, LSE providesworld class research, education andadvice on all aspects of outsourcingto make it less risky and demonstrablymore cost-effective.http://outsourcingunit.org/index.html

Whats next?To learn how Accenture can help you outperform,reach us at http://www.accenture.com/Global/Outsourcing/Bundled_Outsourcing/default.htm

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