Outsourcing & Process Improvement In The Public...

CONFIDENTIAL January 2012

Public Sector Outsourcing: Perception, Reality & Case Studies

Outsourcing & ProcessImprovement In The Public SectorOutsourcing & ProcessImprovement In The Public Sector

Christian HesselhojManaging DirectorGOX GlobalT: +44 (0) 207 993 8991W: www.goxglobal.comE: [email protected]

Richard MetzExecutive DirectorGOX GlobalT: +44 (0) 207 993 8991W: www.goxglobal.comE: [email protected]

A True Outsourcing Story: The Public’s Perception

Approximately 10 years ago, a local council outsourced its most visible services

…Services that every resident sees, depends heavily upon, and would be up in arms iftaken away – waste management & environmental services

…A long-term contract was awarded to a large outsourcer that specialises in these services,and their Logo is on every truck and machine – highly visible to all council residents.

…This company is not English… it’s not even from the Commonwealth. It’s the French-based Veolia Environmental Services

…Residents of this council are very pleased with these services, and appear to have noconcern about how these services are sourced and delivered.

CONFIDENTIAL Outsourcing Means Getting More With Less Or The SameOutsourcing Means Getting More With Less Or The SameThe Public is Reminded Daily that the Public Sector Outsources – To Their BenefitThe Public is Reminded Daily that the Public Sector Outsources – To Their Benefit

Approximately 10 years ago, a local council outsourced its most visible services

…Services that every resident sees, depends heavily upon, and would be up in arms iftaken away – waste management & environmental services

…A long-term contract was awarded to a large outsourcer that specialises in these services,and their Logo is on every truck and machine – highly visible to all council residents.

…This company is not English… it’s not even from the Commonwealth. It’s the French-based Veolia Environmental Services

…Residents of this council are very pleased with these services, and appear to have noconcern about how these services are sourced and delivered.

Practicing What We Preach… Our Outsourcing Landscape

IN-HOUSE GOX TEAM

Consultants & Strategists

Programme/Project Managers

Business Analysts

1 Marketing & FinanceSpecialist

IN-HOUSE GOX TEAM



Business Analysts


Tax , Accountancy,Payroll

(Cambridgshire)


(Cambridgshire)

Sales & MarketingAdvisory

(Wiltshire)


(Wiltshire)

eMail, Storage, BackUps

(Cloud)


(Cloud)

Customer RelationshipManagement

(Cloud)


(Cloud)

Core BusinessCore Business Business ProcessesBusiness ProcessesTechnologyTechnology

CONFIDENTIALMaintain a stable business operation; maximise investment in core competenciesMaintain a stable business operation; maximise investment in core competencies

IN-HOUSE GOX TEAM



Business Analysts


IN-HOUSE GOX TEAM



Business Analysts



(Wiltshire)


(Wiltshire)

Web Development &Testing(India)


eMarketing(London)

eMarketing(London)


(Cloud)


(Cloud)

Website Management& Hosting

(Birmingham)


(Birmingham)

Technology ProjectResources

(UK, Europe, India)


(UK, Europe, India)Customer Call Handling

(London)Customer Call Handling

(London)

Specialist Advisors(Greater London)


And Why We Chose To Outsource…

IN-HOUSE GOX TEAM



Business Analysts


IN-HOUSE GOX TEAM



Business Analysts



(Cambridgshire)


(Cambridgshire)


(Wiltshire)


(Wiltshire)


(Cloud)


(Cloud)


(Cloud)


(Cloud)

Core BusinessCore Business Business ProcessesBusiness ProcessesTechnologyTechnology

BetterBetterCheaperCheaper

FlexibilityFlexibility



BetterBetterSAVEMONEY TO

INVEST HERE

SAVEMONEY TO

INVEST HERE

IN-HOUSE GOX TEAM



Business Analysts


IN-HOUSE GOX TEAM



Business Analysts



(Wiltshire)


(Wiltshire)



eMarketing(London)

eMarketing(London)


(Cloud)


(Cloud)


(Birmingham)


(Birmingham)


(UK, Europe, India)


(UK, Europe, India)Customer Call Handling

(London)Customer Call Handling

(London)



They can provide a better service thanwe could in house

They can provide a better service thanwe could in house

It is cheaper than us trying to provide theequivalent service in house

It is cheaper than us trying to provide theequivalent service in house

We have more flexibility (e.g. to increaseor decrease amount of service)

We have more flexibility (e.g. to increaseor decrease amount of service)

Legend:



BetterBetter

CheaperCheaperFlexibilityFlexibility FlexibilityFlexibility


BetterBetterFlexibilityFlexibility

BetterBetterFlexibilityFlexibility

CheaperCheaperFlexibilityFlexibility

SAVEMONEY TO

INVEST HERE

SAVEMONEY TO

INVEST HERE

Myth: We Need To Outsource Everything

The Myth…

Outsourcers won’t take us seriously

We won’t get a good price on smaller deals

It’s impossible to manage a partiallyoutsourced function

CONFIDENTIAL You Are The Customer. You Call The Shots.You Are The Customer. You Call The Shots.

The Reality…

Outsourcers want public sector business

Successful outsourcing programmes can beaggressive or incremental.

Contract growth can and should be tied toachieving agreed financial targets

Myth: Outsourcing Reduces Flexibility

The Myth…

Outsourcing contracts are rigid – every change willcost a bundle

Outsourcing contracts need to be for 5 years at aminimum

Once we’ve outsourced a service, there’s no goingback

CONFIDENTIALOutsourcing is not a “necessary evil” – it’s a powerful tool in lean and wealthy timesOutsourcing is not a “necessary evil” – it’s a powerful tool in lean and wealthy times

The Myth…

Outsourcing contracts are rigid – every change willcost a bundle

Outsourcing contracts need to be for 5 years at aminimum

Once we’ve outsourced a service, there’s no goingback

The Reality…

Contracts are becoming ever shorter, smaller andmore flexible

It is the client’s right (and imperative) to maintaincontrol of the relationship

Outsourcing enables true capacity management(ramping services up or down without requiringinvestment)

Myth: Outsourcing Means Job Elimination

The Myth…

Outsourcing means that jobs will leave the country

Outsourcing means that we will need to fire large groupsof employees

Outsourcing represents a net decrease in jobs

The Reality…

Most, if not all, back office services can be outsourced forsavings, flexibility and/or quality inside the UK

Outsourcing can be very successful even if there is aparadigm that no employee be forcefully made redundant

Outsourcing, if anything, represents a net increase in jobs –people are still delivering services; their employers are simplydifferent.

CONFIDENTIAL Automation Eliminates Jobs – Outsourcing Improves ThemAutomation Eliminates Jobs – Outsourcing Improves Them

The Reality…

Most, if not all, back office services can be outsourced forsavings, flexibility and/or quality inside the UK

Outsourcing can be very successful even if there is aparadigm that no employee be forcefully made redundant

Outsourcing, if anything, represents a net increase in jobs –people are still delivering services; their employers are simplydifferent.

On The Perception Of Outsourcing…

Which is more negative?

Outsourcing certain HR & Payroll functions to save 20- 30%

Closing public libraries or reducing service center hours


Moving a back office function from Central London to alower cost area of Britain to save 60% on property costs and 20– 25% on labor costs

Raising council taxes to make up the shortfall

CONFIDENTIAL Outsourcing Means Getting More With Less Or The SameOutsourcing Means Getting More With Less Or The SameOutsourcing Could Be The Key To Maintaining Positive Public Perception!!Outsourcing Could Be The Key To Maintaining Positive Public Perception!!


Moving a back office function from Central London to alower cost area of Britain to save 60% on property costs and 20– 25% on labor costs

Raising council taxes to make up the shortfall


Outsourcing to a company that specialises in waste removaland environmental cleaning

Reducing the frequency of waste collection services

Outsourcing Key Learnings & Takeaways

Don’t fear being “too small” or needing to “outsource the lot” to get a favourable deal – outsourcing can be verysuccessful regardless of deal size.

Vendor Management: You have the ability to get a far better service than a similarly sized client by taking positivecontrol of the relationship. Further, healthy outsourcing relationships require continuous improvement throughouttheir life cycles and extensive re-examination every few years.

Contract Flexibility: Even large outsourcing contracts can be designed to be flexible in meeting inevitable thoughsomewhat unpredictable changes in requirements.

It’s About The People: It is better to have an “A-Team” from a “B-Vendor” than the “B-Team” from an “A-Vendor”.

It’s OK To Trust Your Vendor – Though Beware Dependency: Despite the legal world’s best efforts, contractscannot dictate a successful relationship. A vendor and client in a mutually strong (i.e. not dependent) relationshipwill be able to succeed without the heavy hand of the contract.

Distributed Governance – Performance Management Down The Company Ladder: Engage and empower peopleto influence (or at least freely report on) vendor performance from the top down. Most issues arise at the projectmanager or individual contributor level – and can spin out of control before the issue is addressed at the relationshipmanagement level.

CONFIDENTIAL

Don’t fear being “too small” or needing to “outsource the lot” to get a favourable deal – outsourcing can be verysuccessful regardless of deal size.

Vendor Management: You have the ability to get a far better service than a similarly sized client by taking positivecontrol of the relationship. Further, healthy outsourcing relationships require continuous improvement throughouttheir life cycles and extensive re-examination every few years.

Contract Flexibility: Even large outsourcing contracts can be designed to be flexible in meeting inevitable thoughsomewhat unpredictable changes in requirements.

It’s About The People: It is better to have an “A-Team” from a “B-Vendor” than the “B-Team” from an “A-Vendor”.

It’s OK To Trust Your Vendor – Though Beware Dependency: Despite the legal world’s best efforts, contractscannot dictate a successful relationship. A vendor and client in a mutually strong (i.e. not dependent) relationshipwill be able to succeed without the heavy hand of the contract.

Distributed Governance – Performance Management Down The Company Ladder: Engage and empower peopleto influence (or at least freely report on) vendor performance from the top down. Most issues arise at the projectmanager or individual contributor level – and can spin out of control before the issue is addressed at the relationshipmanagement level.

Appendix A – Case Studies

CONFIDENTIAL

Appendix A – Case Studies

Lean & Digitise

Case Summary

Public sector organisation with IT entirelymanaged in-house

Decision made to move to a service basedsolution

Complete overhaul and leaning of processes

Virtualization of all servers and PC

Migration of in-house computing services toexternal outsourcers, including:

- ERP- email services- Disaster Recovery

Controlled migration ensured virtually noimpact to the business

Key Points & Learnings

Open to change

Training is vital

Need a strong Project Management Office

Increased security

Communication .. Communication ..Communication

CONFIDENTIAL Reduced Overall IT Budget By 40%Reduced Overall IT Budget By 40%

Case Summary

Public sector organisation with IT entirelymanaged in-house

Decision made to move to a service basedsolution

Complete overhaul and leaning of processes

Virtualization of all servers and PC

Migration of in-house computing services toexternal outsourcers, including:

- ERP- email services- Disaster Recovery



Open to change

Training is vital

Need a strong Project Management Office

Increased security

Communication .. Communication ..Communication

Key Facts

Total Project Time: 12 months

Investment Cost: (£400,000)

• Payback Period – Less Than 12 Months

• Annualized Savings: £700,000

Key Process Improvements

Lean Processes and Automation -- Procurement

Case Summary

Manufacturing and Service unit of a largemultinational company

Complete revision of procurement processes,from requirements gathering to cashdisbursement

End to end approach:- electronic bidding- exchange of documents with suppliers- document de-materialization- spend analysis

Multi-generation project, starting with quickwins

Key Points & Learning

Set up a strong Committee

Have an excellent Project Leader

Classify your purchases

Go in steps, but define the full architecture atthe beginning

Involve key suppliers from the beginning

CONFIDENTIALCombining Traditional Process Improvement With Digitisation For Maximum ResultsCombining Traditional Process Improvement With Digitisation For Maximum Results

Case Summary

Manufacturing and Service unit of a largemultinational company

Complete revision of procurement processes,from requirements gathering to cashdisbursement

End to end approach:- electronic bidding- exchange of documents with suppliers- document de-materialization- spend analysis



Set up a strong Committee


Classify your purchases

Go in steps, but define the full architecture atthe beginning

Involve key suppliers from the beginning

Key Facts





Key Process Improvements

Costs Savings – Cloud Computing

Case Summary

Organisation with approximately 10,000computing end users

Migration of in-house computing services(MS Exchange-based) to Google BusinessApplications

Services included eMail, file sharing andstorage.

Current technology supported fully in-house,requiring maintenance, support, power,security and ongoing kit investment costs

Decision made to move to a service “cloud”based solution


Key Points & Learning’s

Small but meaningful investment in planningand sourcing

3 to 5 year financial forecasting toincorporate “step costs” such as new hardwareand license costs

Followed clear industry direction

CONFIDENTIAL 75% Cost Reduction; Better Service; No Unexpected Costs75% Cost Reduction; Better Service; No Unexpected Costs

Case Summary

Organisation with approximately 10,000computing end users

Migration of in-house computing services(MS Exchange-based) to Google BusinessApplications

Services included eMail, file sharing andstorage.

Current technology supported fully in-house,requiring maintenance, support, power,security and ongoing kit investment costs

Decision made to move to a service “cloud”based solution


Key FactsTotal Project Time: 12 Months Investment Cost: (£250,000)

• Payback Period – Less Than 3 Months• Annualized Savings: £1,400,000 (Costof Approximately £40Per User instead of£180)

Business Disruption: Virtually Zero

Cost Savings – Infrastructure Outsourcing

Case Summary

Local UK Housing Association

35,000 properties under management

Annual procurement spent of £150MM

80,000 customers

Needed a partner to help update & improvethe entire Legacy Infrastructure

1. Hosted data centre

2. VOIP

3. Service Desk

4. Networking


Minimal investment needed in infrastructureas provider is delivering a service

Return of investment was achieved in lessthan 12 months

Access and usage of latest technology forphone, networks and data backup

CONFIDENTIAL Focus On Your Customer Needs….Don’t Try To Be Technology CompanyFocus On Your Customer Needs….Don’t Try To Be Technology Company

Case Summary

Local UK Housing Association

35,000 properties under management

Annual procurement spent of £150MM

80,000 customers

Needed a partner to help update & improvethe entire Legacy Infrastructure

1. Hosted data centre

2. VOIP

3. Service Desk

4. Networking

Key Facts

Contract Length: 36 Months




Business Disruption: Virtually Zero

Cost Savings – Technology Transformation

Case Summary

Internal Programme overhaul – completesystem & technology refresh

Lacked several necessary skills in-house

Sought an outsourcing arrangement tocompliment & build the capabilities of theinternal team.

Core Requirements were:

1. Lower cost

2. No Long-Term Dependency

3. Team Scalability & Flexibility


Fully integrated near-shore team in less than16 weeks

Investment of £50k in setting up theengagement

Supplier & client shared contractual risk

CONFIDENTIAL Client Used Outsourcer To Build Stronger Competencies In-HouseClient Used Outsourcer To Build Stronger Competencies In-House

Case Summary

Internal Programme overhaul – completesystem & technology refresh

Lacked several necessary skills in-house

Sought an outsourcing arrangement tocompliment & build the capabilities of theinternal team.

Core Requirements were:

1. Lower cost

2. No Long-Term Dependency

3. Team Scalability & Flexibility

Key Facts

Contract Length: 12 Months




IT Leader is now promoting this deliverymodel across 4 other businesses

Payroll Outsourcing

Case Summary

5,000 Employee Mid Market Business

Payroll Process Automation & Outsourcing

Automated Payroll System Provisioned ByThe Outsourcer (Oracle Based)

Utility Based Pricing For Automated Activities

Ongoing Investment Factored Into Run RatePricing


Outsourcing For A Better Process AND CostReductions

Close Client Involvement During TheTransition Process Was Essential

Key Facts

Total Project Time: 3 Month Transition;Ongoing

Investment Cost: Internal Effort / Training(est. £75,000)



CONFIDENTIAL Fixing The Process As They Outsourced; 50% Ongoing Cost ReductionFixing The Process As They Outsourced; 50% Ongoing Cost Reduction

Case Summary

5,000 Employee Mid Market Business

Payroll Process Automation & Outsourcing

Automated Payroll System Provisioned ByThe Outsourcer (Oracle Based)

Utility Based Pricing For Automated Activities

Ongoing Investment Factored Into Run RatePricing

Key Facts

Total Project Time: 3 Month Transition;Ongoing

Investment Cost: Internal Effort / Training(est. £75,000)



Local Council Study: Liverpool City Council

Case Summary

Liverpool City Council’s Adult Social Caredepartment manages the delivery of social careservices to thousands of adults and olderpeople in the Liverpool local authority area

Disparate IT systems and poor reporting ofcritical data

Decision made to outsource reporting to adata integrator specialist

Complete overhaul of databases & reportingmodel

Delivered real-time data analytical capabilities

Migration of in-house IT reporting services toexternal outsourcers, including:

• Data Modeling

• Reporting


Manual efforts reduced so staff can spendtime on valuable data analysis

Data quality improvement due to automation

Increased security

Improved flexibility……reports can be run on-demand or scheduled

CONFIDENTIAL Significant improvements in productivity for operational staffSignificant improvements in productivity for operational staff

Case Summary

Liverpool City Council’s Adult Social Caredepartment manages the delivery of social careservices to thousands of adults and olderpeople in the Liverpool local authority area

Disparate IT systems and poor reporting ofcritical data

Decision made to outsource reporting to adata integrator specialist

Complete overhaul of databases & reportingmodel

Delivered real-time data analytical capabilities

Migration of in-house IT reporting services toexternal outsourcers, including:

• Data Modeling

• Reporting


Manual efforts reduced so staff can spendtime on valuable data analysis

Data quality improvement due to automation

Increased security

Improved flexibility……reports can be run on-demand or scheduled

Key Facts




Key Reporting Improvements

Local Council Study: Lancashire County Council

Case SummaryLancashire County Council was faced withincreasing pressure to provide many diverseand detailed performance reports to centralgovernment .

Data stored in many different systems

4-5 days of querying in getting to the correctdata (very slow and cumbersome)

Centralise all information storage, and toovercome the many data quality issues



Set up a strong Data Committee


Go in steps, but define the data model & fullreporting architecture at the beginning

Involve specialist BI suppliers from the beginning

CONFIDENTIAL Combining Best Practice BI Methodologies For Maximum ResultsCombining Best Practice BI Methodologies For Maximum Results

Case SummaryLancashire County Council was faced withincreasing pressure to provide many diverseand detailed performance reports to centralgovernment .

Data stored in many different systems

4-5 days of querying in getting to the correctdata (very slow and cumbersome)

Centralise all information storage, and toovercome the many data quality issues


Key Facts




Dramatic improvement in its ability to providemanagement information, both for centralgovernment and also for local management andoperational staff

Appendix BMethodology & Testimonials

CONFIDENTIAL

Appendix BMethodology & Testimonials

LEAN Approach

TargetMetricTargetMetric

LEANProcessLEANProcess

OptimalTechnology

OptimalTechnology

RightPeopleRightPeople

• CostReduction• Growth• Retention• Quality

• Organization• Cost• Skills• Sourcing

• Business Alignment• Complexity• Cycle Time• Defects• Non Value Added• Wait Time

• Cost• Sourcing• Complexity• Performance• Risk

CONFIDENTIAL

• CostReduction• Growth• Retention• Quality

Choose the right metric, establish an objective and improve the underlying people,process and technology to reach your goal.

• Organization• Cost• Skills• Sourcing

• Business Alignment• Complexity• Cycle Time• Defects• Non Value Added• Wait Time

• Cost• Sourcing• Complexity• Performance• Risk

Outsourcing Approach

Governance & ExitGovernance & ExitIntegrationIntegrationSourcingSourcingPlanningPlanning

Understand Detailed CostBasis (Benchmarking)

Review Prior Experiences

Review (Selected) IT AreasFor Outsourcing Suitability

Business Strategy

People

Processes

Technology

Create Financial Model

Agree On Targets &Expected Cost Reduction

Three Year Sourcing &Operational Roadmap

Run Sourcing Process

Introduce KeySuppliers

Delivery Model

Interviews

Negotiation

Establish Contracts

Risk Mitigation Planning

Governance Planning

Prepare Internal Teams

Onboard OutsourcedTeam

Project Management

Progress Along Roadmap

Supplier RelationshipManagement

Core OperationalGovernance

CONFIDENTIAL

Understand Detailed CostBasis (Benchmarking)

Review Prior Experiences

Review (Selected) IT AreasFor Outsourcing Suitability

Business Strategy

People

Processes

Technology

Create Financial Model

Agree On Targets &Expected Cost Reduction

Three Year Sourcing &Operational Roadmap

Run Sourcing Process

Introduce KeySuppliers

Delivery Model

Interviews

Negotiation

Establish Contracts

Risk Mitigation Planning

Governance Planning

Prepare Internal Teams

Onboard OutsourcedTeam

Project Management

Progress Along Roadmap

Supplier RelationshipManagement

Core OperationalGovernance

Project BasedOutsourcing

Project BasedOutsourcing

Augmentation /Replacement

Augmentation /Replacement Core Team +

ProjectsCore Team +

Projects

Service BasedService Based

Work-Unit Based(Utility)

Work-Unit Based(Utility)

Multi-sourcedMulti-sourced

In HouseIn House

Outcome BasedAgreements


Single SourcedSingle Sourced

Sourcing - Choosing The Right Service Model

Core Competencies

Sensitivity Of IP

Complexity Of Systems

Process Maturity


Capacity Requirement Forecast

Predictability Of Workload

Financial Considerations

Business Culture

There Is No “Best” Model – Every Situation Is DifferentThere Is No “Best” Model – Every Situation Is Different

Deep Expertise Supported By Proven Tools & Processes…

As-Is Process Map To Be Process Map

Risk & Mitigation Analysis Governance PlanOverview

The purpose of the Integration & Governance Recommendation: GOX can only provide guidanceand a high level framework, it is up to CLIENT & VENDOR to define a productive workingrelationship in the coming weeks in the kick-off meetings. This document includes the following:

1. Key steps for integration in April and May 2011 (slide 3-6)

2. The team structure and dynamics for communication (slide 7)

3. Understand the escalation paths for the engagement (slide 8)

• Failure to partner in the initial 8 weeks: Ensure successful kick-off and team building event in both Minskand London in April/May 2011

• Unfavourable contract terms negotiated in April 2011: GOX will ensure both CLIENT & VENDORhave reasonable terms included in MSA and SOW

• VENDOR not knowledgeable about customer's business: Architect and senior developers spend timeonsite learning it from the team in addition to CLIENT regular coaching VENDOR team on CLIENTbusiness

• Deficient process or scope management: John B. and Oleg work on finalising scope in April 2011

• Poorly defined roles and responsibilities: This is joint responsibilities between VENDOR and CLIENT toclearly define, document and assign roles & responsibilities in the kick off meetings. Make sure people arebought into the plan & vision.

Integration Pitfalls To Avoid

CONFIDENTIAL Page 2

Integration

CONFIDENTIAL Page 3

Personnel Management Goals:

• This is a high level personnel management strategy that is very similar to those used in managing in-houseresources. We recommend a combination of:

• Process (goal setting, periodic performance reviews, 1 on 1 and 360 (resource rates manager) sessions)

• Motivation (offering training & certification, role rotations, on-site visits or short-term work placements,financial incentives)

• Interpersonal (designating in-house sponsors, team building, inclusion and communication).

Team Management Goals:

• Designated key resources have been interviewed, vetted and selected by CLIENT. (Alex, Sergey, Yaroslav)

• Empowerment – reinforcing the right level of empowerment within the CLIENT and the outsourcedteam. We need to show control and technical/process skill to discourage “cowboys”, while at the same timeencouraging (and rewarding) creative contribution.

• Openness – this is of particular importance, and must be addressed at all levels. Issues and concerns oftenstart at the execution level, but do not manifest themselves until they’ve mushroomed and causedmanagement to get involved. CLIENT will foster an environment with absolutely no barriers tocommunication or collaboration. Daily stand up meetings will help address this point.

• Loyalty – Ultimately, we look to develop a team that identifies as strongly with CLIENT (if not morestrongly), than they do with the outsourcer. This will reduce the risk of turnover, increase productivity, andhelp promote openness. VENDOR has a retention rate of 90% which is high by local standards.

Integration

CONFIDENTIAL Page 4

Identifying Key Players:

A key player like Oleg will be used to get top resources for CLIENT . Further, Michael (Owner) willbe involved from an escalation perspective to ensure on time delivery and within agreed cost estimate.

• Communication & Work Culture: Belarus culture is about being open and direct and this suitsCLIENT.

• Perception of authority: They all report to John and Oleg.

• Communication styles and frequencies: Daily meetings and clearly assigned responsibilities (TBD ingreater detail in upcoming kick off meeting in April)

• Leadership styles: Ask team if they prefer hands on micro management or to be left alone. It could bethat the CLIENT team requires a different style from the VENDOR team (more sugar coating)

• CLIENT and VENDOR values (Are they shared and closely aligned). This has to be monitored weekly

Integration

CONFIDENTIAL Page 5

Tactical Management & Technology:

• Shift management – ensuring that differences in time zones do not cause unnecessary delays orlower productivity.

• Collaboration tools – effectively using Skype, Migogo and leverage as many current tools used byboth teams.

• Effective communication – How to make chats/emails/conference calls and meetings moreefficient. When working with Belarus, be clear and concise and confirm understanding whenassigning actions.

Integration Timelines

CONFIDENTIAL Page 6

Key Steps and Timeline:

• Finalise team hires 2nd week of April

• Team workshop and kick off meetings: April 18th Minsk

• Organise onsite visits for Alex (Architect) for 2 weeks: April 25th to May 6th

• Fully integrated team by May 13th

• Team in a successful operating rhythm by June 1st

How to measure success:

• Define success criteria for project & detailed measurable goals for first sprint (Get approval and buy-in from both CLIENT and VENDOR Team & management

• Did the team meet all deliverables? What can be improved for the next sprint?

• Continuous improvement to the operating model ask both CLIENT and VENDOR team forregular feedback

XXXXAlex XXXX

XXXXXXXX

Sergey

Monitoring and contractual

Sprint and milestone communication

1 QA

Yaroslav 1 Dev

Alex P

Sean Ilyas

Remy Bradley

Jiten

Daily project communicationIssue & Bug TrackingCode Review systemBuild toolsContinuous IntegrationSupport andconsultancy

EmailSkypeScreen Sharing: Skype, MikogoPhone & Mobile

Team Structure and Governance ModelGovernance Plan (Continued)

CONFIDENTIAL Page 8

Escalation Paths Explained

• Final decision is with J XXX / XXX for scope definition

• If a milestone/sprint date is not met- Escalate to John/Oleg- John/Oleg communicate to James and Michael- Identify root cause for failure- Find solution for next release to avoid repeating mistake

• If there are any concerns with existing contractual obligations set up conference call betweenxxx/xxxxxx

• If it is not possible to resolve issues via conference call plan for onsite work-out at CLIENTLondon

• IT projects are about people, contracts only provide a guidance, so ensure to manage by influencingpeople and not by referring to contracts

Deep Expertise Supported By Proven Tools & Processes…

Stakeholder Analysis & Action PlanTechnology Decision Matrices

CONFIDENTIAL

-£400,000

-£300,000

-£200,000

-£100,000

£0

£100,000

£200,000

£300,000

£400,000

-£80,000

-£60,000

-£40,000

-£20,000

£0

£20,000

£40,000

£60,000

£80,000

£100,000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35

Cumulative Savings Net Savings Total Cost Total Savings

PaybackInvestment Phase

*Cumulative Savings On Left Axis, X-Axis Is In Months

RECO

MM

ENDE

D

Value AnalysisJ J A S O N D J F M A M J J S O N D

In-House Data Center RationalisationContinue Current Virtualisation ProjectEliminate Obsolete HardwareData Deduplication

PlanningFinalise To-Be Support Organisation (Internal v External)Short List Delivery ModelsLong-List Vendors

Core Sourcing ProcessVendor Information Packs & Initial EngagementRFI/RFPProposals & Negotiation

Integration/TransitionSteady State

Internal CommitmentInternal Stakeholder "Buy In" ProcessHR Planning (Redundancy / Redeployments)Agree "To Be" SLAs (esp. VIPs)Tollgate: Outsource / Keep In House

PlanningFinalise To-Be Support Organisation (Internal v External)Short List Delivery Models

2011 2012

Stream 1: Infrastructure Outsourcig

Stream 2: Help Desk

Action Roadmap

GOX's expertise and vetted vendor network enabled us to thoroughly assess severalpotential partners, conduct a formal sourcing process, and select a best-fit partner in a

matter of 2 months. We have greatly expanded our capability and capacity at incrediblycompetitive rates.

John Brennan, Head Of IT Development, eFinancialCareers

GOX enabled us to source an offshore partner at less than 50% of our anticipated cost. Theyhelped us plan, manage risk and successfully govern the project from inception to delivery

Robert Clayton, CIO, Energy Intelligence

Testimonials

GOX designed and delivered an outsourced model that enables us to deliver quality service toa demanding clientele (primarily large banking and insurance companies) with virtually no

start-up or fixed ongoing costs

Jan Pruis, Head of BD, Prodiance Corporation

GOX enabled us to source an offshore partner at less than 50% of our anticipated cost. Theyhelped us plan, manage risk and successfully govern the project from inception to delivery

Robert Clayton, CIO, Energy Intelligence

We wanted a partner that would provide an independent, honest, detailed and fully costedassessment of our requirements and to help develop a plan for implementation. GOX

exceeded our expectations. They used their wealth of expertise and worldwide contacts todeliver a comprehensive and innovative assessment which has enabled Synergy Housing to

plan for our future requirements

Derek Wilkes, Head Of IT, Synergy Housing Association

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