News Release-- March 24, 2004
Outwit, Outlast, Outsource
Outsource your IT services to a contractor so that you can focus on your core business, advises president of CSC’s Asia Group
WITH 92,000 employees and more than 40 years in computer services, Computer Sciences Corporation (CSC) thinks it can run your IT department better than you do.
CSC's only business is technology, says Mike Brinsford, president of its Asia Group, based in Singapore. “We have the benefit of our experience running IT departments for hundreds of companies.”
In the IT outsourcing business, CSC is No 3 worldwide, after IBM and EDS, said Mr Brinsford. In Singapore, local IT service provider CSA, which is over 70 per cent owned by CSC, acts as the delivery arm for the outsourced projects.
CSC's business philosophy is straightforward: Concentrate on managing the business that you know best and outsource your IT services, installation and requirement to an outside contractor such as CSC.
“Outsourcing” in this context means something very different from the current buzz in the United States about companies retrenching their domestic employees and replacing with similarly-skilled but cheaper workers in India and China.
Here, it means asking CSC to take over your IT infrastructure -- systems, hardware, applications, networks and staff. Your IT staff no longer work for you but for CSC.
“Often, the IT staff prefer to join an IT-specialised company like us, rather than stay with their old company,” Mr Brinsford pointed out. The reasons are fairly obvious. As IT people, they would enjoy better career prospects and professional development in an IT company. Also, at CSC, which serves companies globally, there would be opportunities to be posted all over the world.
Maybank, for example, outsourced its IT infrastructure in August last year to CSC in a 10-year US$342 million ($580 million) deal. CSC assumed responsibility for Maybank’s mainframe, mid-range, desktop, help desk and network infrastructure functions in Malaysia and Singapore. More than 300 of the Maybank IT staff were also transferred to CSC.
Besides IT infrastructure, companies can also outsource their systems software, business applications, and back office business process to CSC.
For the business process outsourcing, Mr Brinsford points to a December 2003 10-year deal with Swiss Re Life and Health, the world’s largest life and health re-insurer. In a deal estimated to be worth US$700 million, CSC delivers end-to-end insurance processing in the US for about two million life and health insurance policies managed through Swiss Re.
Although IT outsourcing are usually made by multinationals and large government agencies, smaller businesses can consider this option, too.
For instance, a mid-sized company that operates small offices in several nearby countries should have its IT department outsourced. But Mr Brinsford cautioned that if the company’s use of IT is small, they won't get much benefit from contracting out its IT requirements.
One such company outsourced its IT to CSC since Day 1. What CSC did was to install the same computer platform across all the client's “multi-national” offices, build a network, and choose the cheapest location, where the skills are and with round-the-clock operations to manage the network centrally, said Mr Brinsford.
Professional services firms are also good candidates for outsourcing their IT and business process.
After IT has been outsourced, crucial to the success of the partnership is the working arrangement between CSC and the client. There are two kinds of arrangement – formal and informal. A formal partnership typically comprises a number of groups– a senior group that meets, say, once a month, and departmental working groups that meet weekly or monthly to discuss issues, problems and developments.
More important is the informal arrangement, where the outsource contractor becomes “an indispensable part of the partnership”.
But like all happy partnership, the client must continue to be involved. It must assign managers to manage the relationship with the supplier of the IT services, said Mr Brinsford.
There are two phases in the outsourcing process, he said. One is the transition where CSC runs the IT services “like old”, that is, little changed from what the client had been doing all along. The transition phase is also the time when CSC meets every person of the old IT department who may be moving over to CSC. Mr Brinsford said that 99 percent of such people have “transit” successfully to his company.
The next phase is transformation, where CSC improves on the old process and runs the department more efficiently.
Outsourcing: The way forward for large corporations worldwide
COMPUTER Sciences Corporation headquartered in El Segundo, California, considers itself a global information technology service provider.
It manages IT for hundreds of multinational clients and organisations in 15 industries, including government, banking and insurance, healthcare, manufacturing and air traffic management.
Most large corporations in North America and Europe have outsourced or are considering outsourcing their IT services, said Mike Brinsford, president of CSC’s Asia Group.
He believes over the next two years, the top 500 companies in Asia would be asking if they need to outsource.
An IT service provider like CSC enjoys a huge pool of technical expertise and economy of scale in supplies and such benefits are passed on to clients.
And what does the future hold for CSC? “I don’t see a limit to our growth,” said Mr Brinsford. The company reported revenues of US$13 billion ($22 billion) for the 12 months ended Oct 3, 2003. For more information, check out www.csc.com
One who has ‘transited’ successfully
PRESIDENT Mike Brinsford of CSC’s Asia Group used himself as an example of an employee from an outsourced client who has integrated into CSC successfully.
“I joined CSC through an acquisition,” he said. “People may feel threatened initially during the transition phase when we take over the client’s IT department. So, the management team will meet every one of the individuals who are going to transit to us.”
Mr Brinsford has been with CSC since 1996. He described himself as an accountant by qualification and a programmer by trade.
And what does he do besides running IT services for other companies?
“I play a lot of sports, like golf and tennis. I used to play rugby and cricket too.”
--Today Newspaper (Singapore)