Introduction
 
Strategic application outsourcing is emerging as a key trend in the application outsourcing market. The brief outlines Datamonitor's view of this emerging market and analyses the Zurich Financial Services CSC deal, worth an estimated $1.3bn over seven years. The brief focuses on outsourcing drivers, IT organizational structure, procurement, transformation and retained functions
 

 
Scope
 
The brief gives a market overview analyzing trends and developments in the application outsourcing market focusing on Zurich Financial Services.
 
Contextualizes the Zurich Financial Services - CSC contract through analyzing Zurich's background and overall IT strategy
 
Examines the objectives set out by Zurich, the means by which it has set out to achieve these with CSC and the resulting structure and processes
 
Highlights
 
FSIs are increasingly accepting of using offshore resources and are keen to capitalize on the benefits. However, after years of offshore dominated development of the application services market, increasingly credible global sourcing strategies are putting the proverbial ball back in the court of the traditional onshore vendors.
 

 
Zurich's retained function is a strategy, management and vendor liaison function. The retained function is responsible for the business relationship with CSC, for setting out the strategic direction of development, for translating business needs into IT requirements and for interactions with the outsourced function at all levels.
 

 
Transformation of the application services function and of the benefits delivered to the business side were fundamental drivers for seeking an outsourced solution for Zurich. The effort has thus far has been centered on: -staff, -software portfolio and -process.
 

 
Reasons to Purchase
 
Learn from the market shaping strategic application outsourcing deal between Zurich FS and CSC
 
Understand the dynamics and growth potential for the application outsourcing market to improve marketing and sales efficiency
 
Understand the key success factors that vendors addressing this market need to be aware of in order to be successful over the next 18 months
 

TABLE OF CONTENTS
 
CHAPTER 1 INTRODUCTION 5
 
CHAPTER 2 MARKET CONTEXT 6
 
Introduction 6
 
Strategic application outsourcing changes deal structure 6
 
Core applications increasingly outsourced as market confidence in vendors grow 6
 
Role reversal as onshore becomes key to strategic outsourcing? 7
 
CHAPTER 3 ZURICH FINANCIAL SERVICES CASE STUDY 9
 
Background: outsourcing as a reaction to overall IT startegy 9
 
Key deal facts 10
 
Application outsourcing objectives 10
 
Impact of outsource impact on structure and process 11
 
Retained function 12
 
Transformation of outsourced function 12
 
Change initiatives and procurement 13
 
CIO check list 15
 
CHAPTER 4 APPENDIX 17
 
Future readings 17
 
SPP writing team 17
 

 
LIST OF FIGURES
 
Figure 1: Organizational structure has been transformed 11
 
Figure 2: Technology decision framework for Zurich-CSC relationship 14
 
Figure 3: Outsourcing check-list based on key CIO take-outs from the Zurich-CSC relationships 15