Outsourcing Services from HP

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1 Outsourcing Services from HP Improve profitability and overall competitive success by partnering with HP to manage your IT infrastructure, applications, and other business processes

2 While senior executives still view outsourcing as a cost-cutting opportunity, they also recognize outsourcing s value as a means to manage variable demand from the rest of the business and to redeploy in-house IT personnel for more crucial purposes. Diamond Cluster Research, Spring 2005 Are you in the information technology business? Probably not. But we ll bet that sometimes it seems you are. In today s information-driven, Internet-dependent marketplace, most businesses even those that have nothing to do with the development and management of information technology (IT) wind up dedicating a large chunk of their time, budget, and energy to understanding, implementing, and leveraging IT in order to facilitate business success. And it s a good thing they do for today, business success is largely dependent on the degree to which a company effectively leverages IT. But what if you could walk away from the day-to-day operations of the IT function and all the issues and challenges it engenders? What if you could hand responsibility for that or other selected business processes to the most knowledgeable team in the business and return your focus to your core competency, secure in the knowledge that these important functions are being managed at world-class levels and are operating at peak efficiency? Services that free you to do what you do best HP s outsourcing services give you the freedom to focus energies and resources on your core competencies by effectively taking the responsibility for IT management and other business processes off your hands. We combine unmatched technology expertise with global reach, the industry s broadest portfolio of services, and a commitment to best practices to deliver a level of service that isn t just about maintaining your IT environment it s about improving it. We don t just manage your infrastructure and applications; we look for ways to optimize them by streamlining processes, reducing risks, accelerating innovation, and increasing flexibility and responsiveness by making sure IT functions are carefully aligned to support business strategies. The result is infrastructure, applications, and business processes that improve business performance, drive new business models, shorten time to market, and cost less to operate on an annual basis. 2

3 HP solutions, combined with HP s innovation and commitment to service excellence, provide the flexible infrastructure we need to continue to innovate and grow our business. We look toward to the future of our partnership with even greater enthusiasm, because we both understand what the potential can be. Understandably, the hard work will continue. Yet, with a solid relationship in place, we are ready to move forward together to accomplish still more and innovate in entirely new areas. Filippo Passerini Chief Information and Global Services Officer, P&G What we didn t buy from HP was 10 years of 2003 technology. We bought the evolution of technology over a 10-year period. Linda Clement Holmes, Manager, Infrastructure Services & Governance P&G Global Business Solutions Outsourcing in the real world Procter & Gamble chooses HP to bring innovation to their IT infrastructure, application services, and transactional accounts payable operations worldwide. Founded in Ohio in 1837 as a soap and candle company, Procter & Gamble is now the world s largest provider of consumer and household products. P&G today has sixteen brands that generate at least $1 billion each in revenue per year, with over $51 billion total annual revenue, 110,000 employees, and billions of customers in 140 countries. In , P&G decided to outsource large portions of their business processes so they could concentrate on their core competencies inventing, making, and marketing great household products. P&G had additional goals for their IT outsourcing strategy: to reduce IT costs, to speed entry into new markets, and to strengthen their ability to execute acquisitions quickly, while simultaneously applying IT innovation to deliver business value. P&G ultimately chose HP as their IT outsourcing partner not only for our global IT services expertise and for the close cultural fit between the companies, but because they were seeking the continual innovation that HP could bring to the table a value-add that fit nicely with P&G s long-term strategy of keeping fresh by continually seeking innovation from outside the company. Today, HP manages a number of P&G s worldwide IT functions, including infrastructure and data center operations, desktop and end-user support, network management, mobile messaging, print and file sharing, business continuity and availability services, and Intranet hosting. We also share in the responsibility for the development and maintenance of SAP, Siebel, and custom applications within P&G on a global basis. HP provides ongoing applications management, project implementation, and solution management services for all of P&G s global business units and regional market development organizations. And we re pleased to say that the results of the partnership have been positive. Twenty-four months after completing the transition process, our retention rate for the transitioned employees has been higher than the industry standard; we ve met or exceeded almost all service-level agreements and targets, and user satisfaction based on direct surveys remains high. P&G is also using outsourcing as a way to bring in expertise in areas beyond IT. In 2004, they outsourced their worldwide transactional accounts payable (TAP) function to HP in order to improve service levels and regulatory compliance, reduce costs, gain access to innovation, and give employees a chance to work for an organization where accounts payable work is core. Under this new agreement, HP manages all TAP functions for P&G, including receiving, archiving, and retrieving invoices; scanning and posting receipts; matching and payment; fielding customer calls; and providing discrepancy resolution. We also provide the supporting IT infrastructure for TAP, including the relevant SAP financials platform. 3

4 Since our relationship with HP began more than a year ago, we ve become more agile, able to focus more of our resources on our core competencies and as a result are providing a better banking experience for our customers. D. Krishnamurthy, General Manager, Information Technology, Bank of India

5 Bank of India selects HP to help streamline their IT operations, increase their business competitiveness, and control costs Bank of India is one the largest public sector banks in India with 43,000 employees, a network of more than 2,500 domestic branches, and 20 international branches providing an extensive range of financial solutions to over 23 million customers. In 2004, management decided that they could and should be using IT more effectively to increase productivity, improve standardization, and drive competitive advantage, as well as to provide a unified interface for customers and produce faster time to market for new products and services. The Bank was looking for an outsourcing provider that could implement a core banking solution (a multi-currency, multi-platform, workflow-enabled platform) across all 750 of their branches in India, establish a data warehousing and document imaging solution, and institute integrated channel management for telebanking, Internet banking, and automated teller machine (ATM) systems. Bank of India chose HP as their outsourcing partner based on our history of other financial institution successes, our strong partnerships with key financial services application providers, and an impressive total cost of ownership model. In addition to implementing and managing Bank of India s core banking solution, HP built and managed a data center and a disaster recovery site, as well as a help desk and call center. Plus, HP assumed management of the Bank s servers, desktops, and peripherals across the 750-branch network and took responsibility for providing asset refresh and obsolescence protection for the Bank s IT assets. By outsourcing to HP, Bank of India is not only cutting operational expenses, but also gaining significant business benefits in the competitive banking environment in India. Aligning business and IT has resulted in faster product decision-making and faster time-to-market. Establishing a single HP point of contact for IT services has resulted in increased productivity, more consistent service levels, better customer experiences, and improved billing and reporting. Leveraging HP s proven methodologies has reduced time to implementation and improved operational control. And HP s benchmark pricing combined with a carefully constructed financial model is allowing the bank to conserve capital, accurately predict cash flow, reduce total cost of ownership, eliminate end-of-life asset management challenges, and convert costs from capital expenditures (CAPEX) to operating expenses (OPEX) for optimal return on investment. The Outsourcing Center recently awarded HP and Bank of India the prestigious Outsourcing Excellence Award in the Best First Steps category. This honor goes to the vendor and client that have taken exceptional initial steps toward achieving the client s outsourcing goals. 5

6 The last two years have been wholly successful we have integrated two similar but different cultures, establishing a relationship of deep mutual respect and support and building the base for a long-term, win-win relationship. We also delivered great results, with HP meeting all expectations. Filippo Passerini Chief Information and Global Services Officer, P&G What makes a successful outsourcing relationship? A partner that will leverage your existing employees: Look for a company with a strong track record for employee integration and retention. Key indicators of success will be the percentage of transitioned employees who have accepted employment with them in the past, and their employee retention rate after two years. A partner that is collaborative: Make sure the company you partner with listens to your needs and dedicates ample time to creating a detailed governance agreement. Ask them how they will define success, and who will bear the risks inherent in the partnership. A partner that will make the most of your current technology: Ask how they have optimized and transformed other customers ecosystems. A partner that brings something new to the relationship: Find out where potential partners fit on the innovation spectrum. Do they have a track record for driving technology improvements? How much do they invest in R&D annually? IT expertise is often one of the major drivers that companies cite in their decision to outsource. Make sure the company you choose brings IT expertise to the table for both current and emerging technologies. A strong cultural fit: This may sound like a nice to have, but in fact it can be the most important factor in predicting the effectiveness of an outsourcing relationship. Take time to meet with representatives from prospective providers as often as possible to gauge similarities and differences between your companies. The intangible connection you feel when there s a strong cultural fit is a valuable asset that will make working together easier and more productive for years to come. Why HP for your outsourcing needs? Global outsourcing leadership: With more than 850 clients around the world trusting their critical infrastructure elements, applications, and business processes to HP, we re firmly established as one of the world s largest and most trusted outsourcing service providers. A truly unique outsourcing model: While many service vendors approach outsourcing as little more than a transfer of responsibility from one organization to another, the HP outsourcing model is built around a commitment to innovation. We strive to help our clients improve performance, reduce costs, and gain long-term competitive advantages by providing the technological insights and process improvements they may not have had access to in-house. And our innovative efforts are not a one-time endeavor. We are committed to delivering both immediate improvements as well as long-term strategies that consistently position our clients for business success. Global reach and depth: Our size, talent, and scope make us truly unique in the industry. HP has the experts you need in the countries where you do business. And whether your business model calls for onsite, onshore, near-shore, or offshore staffing, we can help. Our Services staff includes more than 65,000 professionals worldwide: 28,000 Microsoft experts; 18,000 UNIX specialists; 4,500 Cisco engineers; 7,500 Internet/networking consultants; 5,300 OpenVMS engineers; 3,000+ SAP Certified Experts; 5,000+ consultants on J2EE and.net; and 2,100 project management professionals. They re supported by facilities in 160 countries, including 105 operations response centers, 50 recovery centers, 80 client education centers, and 15 SAP/HP competency centers. This wide array of geographically dispersed expertise helps ensure that we can provide the best match of resources to fit your needs. 6

7 HP is listed in the leader quadrant in the following Magic Quadrants: Magic Quadrant for Data Center Outsourcing, ; Magic Quadrant for North American Desktop Outsourcing, ; Magic Quadrant for North American Help Desk Outsourcing, ; Magic Quadrant for Data Center Outsourcing in Western Europe, 4Q04 4.* *Magic Quadrant Disclaimer One of the industry s broadest portfolios of outsourcing services: The HP portfolio of outsourced services spans an extremely broad spectrum. We offer everything from infrastructure management and application outsourcing to end-user workplace management, business continuity services, and business process outsourcing. In addition to these services, clients have full access to the broader portfolio of HP products and multivendor services as needed by their specific business requirements. A rich reservoir of experience: In 2002, HP pulled off what was arguably the largest merger in high-tech history when it integrated its own systems and processes with those of Compaq. The experience we gained during that process gave us a unique insight into the needs of companies going through mergers and acquisitions. As a result, we re exceptionally qualified to provide the expertise and personnel required to guide any organization smoothly through the process and into an efficient new environment. For more information If you re ready to learn more about HP s outsourcing services, contact your local HP sales representative, or visit * The Magic Quadrant is copyrighted December 1, 2004, and June 22, 2005, by Gartner, Inc. and is reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts Gartner s analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the Leaders quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. 1 Gartner Research Magic Quadrant for Data Center Outsourcing, 2005 by R. Matlus and W. Maurer, June 22, Gartner Research Magic Quadrant for North American Desktop Outsourcing, 2004 by R. Matlus and W. Maurer, December 1, Gartner Research Magic Quadrant for North American Help Desk Outsourcing, 2004 by R. Matlus and W. Maurer, December 1, Magic Quadrant for Data Center Outsourcing in Western Europe, 4Q04 by Gianluca Tracamere and Claudio da Rold, March 1,

8 To learn more, visit Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein. Microsoft is a U.S. registered trademark of Microsoft Corporation. UNIX is a registered trademark of The Open Group EN Rev. 1, September 2005