it2 Remote Onshore Services

(1)

• Changes in Outsourcing Dynamics

• Taking a Different Approach

• iT2 Outsourcing Advantages

• Remote Onshore Service Offerings

• What Our Customers Say

• Conclusion

iT2 Remote Onshore Services

Ex

cel

lence

in S

AP

C

ons

ul

ti

ng

!

(2)

Dispelling the Myth of Offshore Outsourcing

Claim

Reality

Cheaper to outsource

offshore Companies that factor in the total cost of outsourcing may realize that domestic outsourcing can be less expensive than offshoring…The domestic delivery model may offer increased productivity, fewer travel costs and less management overhead.1

Nike says the costs of using an onshore team are on par with the development costs using an offshore team. The code, though, was better and arrived with fewer defects from the onshore team, said Davis. 2

When assessing the total costs — or true cost — of the offshore-delivered services versus onshore delivered services, there is often a very different picture: True costs involve hourly labor costs + quality + client experience + outcomes. The 'first time right’ argument can be compelling proof that onshore can be less expensive than "low-cost“ Indian labor rates). 7

Cost of wages

significantly cheaper Wage inflation is 10 to 15 percent in India, while many American cities face wage deflation

3

Many of our clients are already paying higher rates offshore than we are offering onshore. Good analysts and

product developers are cheaper Offshore

Good analysts and product developers in India and China are few and far between, so pay for such jobs has been rising by up to 30% a year. . . pay for workers with such skills in India and China can be even higher than in America or Europe, with all the disadvantages of being several time zones away from head office4

Availability of quality

employees Workers with greater seniority are much more difficult to find. The scarcity of experienced workers plus the financial incentive for rapid promotions …managers are not being developed quickly enough to fill all positions, And many managers leave India to work in the U.S. or Europe5

(3)

Comparison of Onshore and Offshore Outsourcing

6 Comparison

US Onshore

Offshore

Workers have good Cultural and

Communication Skills

82%

33%

Workers understand my business

88%

43%

Workers take Initiative

77%

40%

Workers are Innovative

77%

45%

Satisfied with current performance of

Network/server management

74%

56%

Satisfied with current performance of

IT help desk

71%

54%

Satisfied with current performance of

Applications development

77%

61%

Satisfied with current performance of

Applications maintenance

76%

64%

A recent survey of US IT managers comparing the effectiveness of

onshore with offshore resources provided the following results

(4)

Companies Moving Back Onshore

Offshore

U.S.

Onshore

Time

Cos

t

Cost Disparity of Offshore

Outsourcing Eroding with

Time

 “When offshoring pioneers like GE

and others start to make public

statements about moving or

keeping jobs onshore, one can be

sure that it’s not down to altruism.

They are seeing real value in

delivering business services close

to the business, at an acceptable

price point.”

10

 “Nike Sprints From Offshore to

Onshore Developers”

8

 “New Onshore IT Outsourcing

Centers Outnumber New Offshore

(5)

A Different Approach

 At iT2, we have taken a different approach to providing value

to our customers utilizing an onshore outsourcing model

 Great small towns are one of America’s best kept secrets for

tapping underemployed, highly-skilled resources at affordable

costs

 Small towns offer great employees

 A safe, wholesome environment to raise children

 A great quality of life

 Low cost of living

 Strong community with shared core values

iT2 Remote Services is located where high-skilled

workers are available at a low cost

(6)

iT2 Remote Location: Winfield, KS

Location

Central United States

Time Zone

Central U.S.

Education Opportunities

Southwestern College (4 yr. college located in Winfield)

_{2 major universities and 12 colleges within 100 mile radius}

Rich cultural traditions in

architecture, art, theater, and

music

Oldest orchestral music program in American public schools

Annual host to one of the top 10 music festivals in the US

according to USA Today (Walnut Valley Festival)

Major Airport

40 minutes away

Key Industries

Newell-Rubbermaid, Mead Westvaco Calmar, Winfield

_{Consumer Products/Husky Liners, GE Engine Services}

People who live here also

commute to

Koch Industries, Cessna, Spirit Aerosystems, Beechcraft,

Bombardier Learjet, Boeing, Johnson Controls, Coleman

Winfield has twice been rated as one of “The 100 Best Small Towns in America”

(7)

Advantages of iT2 Remote Services

 Time zone

 Increase productivity by avoiding late-night conference calls

and 72 hour communication cycles

 Language and communication

 Reliable communication results in getting it done right the

first time

 Avoid the multiplicative costs of rework

 Flexible staffing models utilizing fractional FTEs

 Paying for only what you need results in significant cost

savings

 Mixed skill-set model

 Save costs by paying one retainer for multiple skill-sets that

you utilize on an ad hoc basis

(8)

Advantages of iT2 Remote Services, Cont.

 Superior talent pool

 India’s talent pool has been stretched and diluted due to

sustained year-over-year exponential growth

 We have a highly stable workforce in rural KS with a low

level of competition for SAP resources

 Pricing parity

 Many of our clients are already paying higher hourly rates

for offshore resources than we are offering for onshore

resources

 A low-cost business environment combined with a low-cost

professional labor market results in very competitive pricing

 Our rates start at $65/hr with an average blended rate of

(9)

Advantages of iT2 Remote Services, Cont.

 Customized outsourcing approach

 There is no one-size-fits-all model for our customers

 We are committed to defining a model that works best for

you and your business needs

 We can provide dedicated resources or fractional FTEs

 Dedicated development/support center or ad hoc staffing

 Remote COE or targeted expertise

 Functional outsourcing or supplemental staffing

 Mixed skill-set resource pooling

(10)

Remote Onshore Service Offerings



System Administration and

Maintenance



Production Support



Help Desk



Testing



Configuration



Development



Implementations



Upgrades



Training

At iT2 we provide remote services around all areas of SAP



ECC All Modules/

Functional Areas



Basis



ABAP/XI/PI



BI/BW/BOBJ/

Dashboards



EPM/BPC



HANA



NetWeaver

SAP Areas

Services

(11)

What Our Customers Say

“I have been using iT Services 2 for remote SAP

BusinessObjects Web Intelligence development and

Super User training. This has been an excellent

experience. Our consultant was very responsive and

got the work done right the first time. We utilized the

fractional FTE pricing option and only paid for what we

needed when we needed it. What a concept! I highly

recommend iT2 to anyone looking for remote

development, support, or training.”

– Karen Lane

Director of HS&E

Baker-Hughes, Inc.

(12)

Conclusion

Are you ready to discuss your

outsourcing goals and objectives with iT2

to see how we can tailor a plan to your

specific needs?

For more information or to schedule a meeting,

contact:

David Bromlow

Director of Professional Services

[email protected]

(13)

References

1 _{Betts, Mitch. “Strategic Guide: Surprising Trends in IT Outsourcing” CIO 31 Oct. 2012: 7. CIO.com.}

Web. 25 Oct. 2013.

2 _{Thibodeau, Patrick. “Nike Sprints From Offshore to Onshore Developers” Computerworld 9 Oct. 2013:}

1. CIO.com. Web. 25 Oct. 2013

3 _{Betts, Mitch. “Strategic Guide: Surprising Trends in IT Outsourcing” CIO 31 Oct. 2012: 6. CIO.com.}

Web. 25 Oct. 2013

4 _{”On the turn” Special Report: Outsourcing and offshoring, India’s outsourcing business. The Economist}

│from the print edition 19 Jan. 2013. Web. 25 Oct. 2013.

5 _{Niccolls, Chris. “Onshore and Offshore Compensation Trends” Outsourcing.About.com. Web. 25 Oct.}

2013.

6_{“Around the world and back again: Sourcing services in the USA”. HFS Research June 2013: 6-8}

Horsesforsources.com. Web. 25 Oct. 2013

7_{Young, Allie, Huntley, Helen, and Karamouzis, Frances. “Market Trends: Providers Expand U.S.}

Onshore Delivery, Invigorate Investments in Low-Cost Domestic and Rural Sourcing Options”

Gartner, Inc. 23 May 2013.

8 _{Thibodeau, Patrick. “Nike Sprints From Offshore to Onshore Developers” Computerworld 9 Oct. 2013.}

CIO.com. Web. 25 Oct. 2013

9 _{Overby, Stephanie. “New Onshore IT Outsourcing Centers Outnumber New Offshore Locations” CIO.}

26 Jul.. 2013. CIO.com. Web. 25 Oct. 2013

10_{“Around the world and back again: Sourcing services in the USA”. HFS Research June 2013: 2.}

Horsesforsources.com. Web. 25 Oct. 2013

it2 Remote Onshore Services

Contents

•

Changes in Outsourcing Dynamics

•

Taking a Different Approach

•

iT2 Outsourcing Advantages

•

Remote Onshore Service Offerings

•

What Our Customers Say

•

Conclusion

iT2 Remote Onshore Services

Ex

cel

lence

in S

AP

C

ons

ul

ti

ng

!

Dispelling the Myth of Offshore Outsourcing

Claim

Reality

Comparison of Onshore and Offshore Outsourcing

6

Comparison

US Onshore

Offshore

Workers have good Cultural and

Communication Skills

82%

33%

Workers understand my business

88%

43%

Workers take Initiative

77%

40%

Workers are Innovative

77%

45%

Satisfied with current performance of

Network/server management

74%

56%

Satisfied with current performance of

IT help desk

71%

54%

Satisfied with current performance of

Applications development

77%

61%

Satisfied with current performance of

Applications maintenance

76%

64%

A recent survey of US IT managers comparing the effectiveness of

onshore with offshore resources provided the following results

Companies Moving Back Onshore

Offshore

U.S.

Onshore

Time

Cos

t

Cost Disparity of Offshore

Outsourcing Eroding with

Time

 “When offshoring pioneers like GE

and others start to make public

statements about moving or

keeping jobs onshore, one can be

sure that it’s not down to altruism.

_{2 major universities and 12 colleges within 100 mile radius}

_{Consumer Products/Husky Liners, GE Engine Services}