Appendix A: Case Sample Firm Description

Appendix A: Case Sample Firm Description

ABN AMRO

ABN AMRO is a banking company with its roots in Europe and operates on a worldwide basis. ABN AMRO focuses on consumer clients as well as commercial clients and ABN AMRO employs almost 120.000 people globally. ABN AMRO’s main activity classification is a money-creating financial organization (BIK code 651, very large corporations), which is the same as ING bank.

In 2002 a relative small part of ABN AMRO’s IT was outsourced to the American based ICT firm EDS. In 2005, the ABN AMRO outsourced the bulk of their IT services to 5 different IT-suppliers leaded by IBM. In the second case, 3800 of the original 5000 IT employees left the organization. Because the major part of the outsourcing deal happened in 2005, the second process of outsourcing is the point of focus in this study.

Ahold

Ahold is a group of worldwide operating stores in consumer goods. Super markets, liquor shops and drugstores are all part of the Ahold group. In total, almost 170.000 people (2005) are employed by Ahold. Ahold’s main activity code is 521 (BIK, Grocery stores, depots and other stores with a general assortment, very large organizations). Ahold is the only firm in the sample with this classification.

Avebe

Avebe specializes in the production, sales and marketing of starch. Avebe is based in the Netherlands and operates in about 20 countries globally. In total, Avebe employs almost 2.500 people (2005). Avebe’s main activity is the production of starch (BIK 156). Avebe is the only company in this sample in this category.

Avebe decided to outsource the maintenance and management of their IT infrastructure in 2003 to Getronics. Getronics will control the IT systems in every country in which Avebe is active.

Delta Lloyd Group

Delta Lloyd group consist of 9 financial service organizations such as insurance and banking who operates mainly in the Netherlands, Belgium and Germany. Delta Lloyds’ main classification code is 660 (BIK, Insurance companies and pension funds, very large corporations) which is the same as SNS Reaal and ING.

In 2004, Delta Lloyd group signed an IT outsourcing contract with IBM for 7 years. The contract involved the outsourcing of data centres, management of work stations and telecommunication. 150 Employees transferred to IBM with this deal. A spokesperson for Delta Lloyd claims that the outsourcing of IT has everything to do with Delta Lloyds focus on their core activities.

DSM

DSM is a Dutch based firm which is active in four industries: Nutrition, Pharmacy, Performance Materials and Chemical Industries. DSM operates on a world wide basis and has its headquarters located in Heerlen. More than 7000 people (2005) are employed by DSM Netherlands and almost 23.000 people (2005) work for DMS globally.

DSM’s main activity code is 241 (BIK) which is the production of basic chemicals (very large corporations). DSM is the only firm in this sample in this peer group.

Asian-Pacific region to Getronics and another (unknown) vendor. The duration for the contract is three years. In 2005 DSM expanded the contract to the management of 20.000 workplaces and prolonged it with another three years. However, the outsourcing decision in 2003 is the focus in this study.

Essent

Essent is a Dutch utility company active on energy markets in the Netherlands, Belgium, Germany and Switzerland and employs over 11.500 people in total (2005). Furthermore, Essent also provides certain telecommunication services such as cable internet and television. However, Essent’s main activity is still the production, distribution and commerce of electricity, gas and hot water (BIK 400). Essent has the same peer group as Nuon in this sample.

In 2003, Essent outsourced the main part of its automation to IBM. The contract involves the management of all the workplaces and network structures.

Heijmans

Heijmans is a holding of a group of subsidiaries who are active in the field of property development, construction and infrastructure. Heijmans is active in a number of European countries and employs in total over 9.000 people (2005). Their main activity is civilian- and utility building; ground, water and road building (BIK 452). Heijmans is the only firm in this sample in this category.

Heijmans has outsourced a large part of its IT activities to Atos Origin in 2006. The contract was signed for 5 years and involved the complete management and maintenance of workplaces and helpdesk. 49 IT employees of Heijmans transferred to the vendor in this deal.

ING

employees (2005). ING’s main activity is the insurance business (BIK400) which places ING in the same peer group as SNS Reaal and Delta Lloyd in this sample.

In 2006, ING outsourced the management and maintenance of 53.000 European workplaces to Getronics, KPN, Atos Origin and Accenture. The contract was signed for five years and involved the transfer of 550 employees to the different vendors.

KPN

KPN is the largest telecom and internet provider of the Netherlands. The former state owned company now faces fierce competition on almost any market in which they are active. KPN employs over 27.000 people (2005) and is active in large parts of Europe and in the United states. KPN’s main activity code is 642 (BIK, Telecommunications, very large corporations). KPN is the only organization in the sample in this peer group.

The decision to outsource the management of 17.000 workstations to Atos Origin was made in 2004 and the contract is signed for four years. A spokesperson for KPN emphasizes that cost cuttings are the main goal of the outsourcing deal.

Nuon

Nuon is a Dutch based company which specializes in the production, marketing, sales and distribution of gas and heat to consumers and business consumers. Nuon employs almost 10.000 people (2005) and is globally active. Nuon’s main activity code is 400 (BIK, Production, distribution and commerce of heat, gas and electricity, very large corporations). Another company in the sample with the same major activity code is Essent.

In 2003 Nuon decided to outsource a major part of its IT services to Atos Origin. The contract involved complete workplace management and with it 90 people transferred to the vendor. The contract is signed for five years.

PCM

the publishing which is BIK code 221. This is the same as Wolters Kluwer and Wegener in this sample.

In 2003 PCM outsourced the maintenance and management of its IT infrastructure to PinkRoccade. The contract was signed for six year and 120 employees of PCM transferred employment to the vendor. A spokesperson from PCM indicates that cost reduction were the main motivation for the decision to outsource.

Philips

Philips is a global operating technology corporation based in the Netherlands. Philips is active in three industries: Medical, Life-Style and Consumer Technology. Philips is a global operating organization and has over 159.000 employees worldwide. Their main activity is the production of electrical elements and batteries, very large corporations (BIK code 314). Philips is the only organization in this sample in this peer group

At the end of 2004, Philips outsourced the management of 75.000 work stations in 60 countries to a consortium of IT suppliers consisting of Dell, Getronics and Atos Origin for four years. What is interesting in the case of Philips, is that they terminated the contract in the beginning of 2006. It is stated that Philips does not believe a standardized workplace on a global basis is possible because of different wishes and requirements. As of 2006, Philips is considering the standardization of workplaces on a more locally oriented basis.

Shell

The Royal Dutch Shell group is a company which is active in the producing of petroleum. Shell headquarters is based in the Netherlands and they are globally active. Shell employs about 14.000 people (2004). Shell’s main activity code is 111 (BIK) which is the winning of natural gas and oil (large corporations). Shell is the only organization in this sample in this peer group.

contract concerned the design and maintenance of a new network involving 90.000 workplaces in 135 countries.

SNS Bank

SNS Bank is a part of the SNS Reaal group, with SNS Bank as a main brand. SNS bank is a banking firm with its main operations in the Netherlands. This study focuses on the parent corporation: SNS Reaal which operates in the Netherlands and Luxembourg and has besides SNS Bank, REAAL Insurances as its main brand. In total, SNS Reaal employs over 5.300 people. Their main activity code is 660 (BIK, Insurance companies and pension funds) which is the same as Delta Lloyd and ING.

In 2004, SNS Bank brand of SNS Reaal group, outsourced the management of their IT infrastructure to Unisys in a contract lasting three years. Unisys became responsible for the management of 3.500 workplaces.

Stork

Stork NV specializes in industrial services and more specific in improving industrial processes for their customers. Stork is based in the Netherlands and operates on a global basis with almost 13.000 employees.

Stork’s main activity code is 295 (BIK) which is the production of machinery for specific industrial activities (very large corporations). Stork is the only firm in the sample with this BIK code.

In 2003, Stork NV decided to outsource a substantial part of their workplace management (1.300 workplaces) to Getronics after good experiences with outsourcing their IT management on a smaller basis. This contract is expanded to the management of 3.000 workplaces in 2004. The outsourcing deal of 2003 is the focus in this study.

Unilever

158 (BIK, production of other articles of food, very large corporations). Unilever is the only firm in the sample with this main activity code.

In 2000, Unilever signed a contract with IBM and Compaq for the exclusive delivery and maintenance of many back office activities. In 2005, other back office activities (such as finance) were outsourced. Because the first process of outsourcing involved as main component IT services, this is studied here.

Wegener

Wegener is a publishing firm with its origins in Apeldoorn, the Netherlands. It focuses on two lines of business. First, Wegener is a major player in the delivery of Direct Marketing services in several countries in Western-Europe. The second line of business is the publishing of numerous regional daily newspapers, several national magazines and Wegener provides some graphical services.

Wegener’s main classification is publishers (very large corporations) or BIK code 221 and has more than 5.500 employees (2005). This places Wegener in a peer group together with Kluwer and PCM. Wegener is currently active in 8 countries all over Europe.

In December 2005, Wegener signed a declaration of intent to outsource the management of 4300 workstations at more than 80 locations to ICT firm Getronics PinkRoccade. 60 Employees have transferred their employment to the vendor firm.

Profits for Wegener in the years prior to outsourcing IS, are weak, and a loss can be discerned in three of the five years prior to outsourcing.

Wolters Kluwer

Wolters Kluwer n.v. is a global operating publishing corporation. The Dutch branch of Wolters Kluwer n.v. is called Kluwer. For this analysis, the parent organization, Wolters Kluwer n.v. is used, where over 18.000 people are employed. Wolters Kluwers’ main activity code (BIK) is 221 (Publishers, very large corporations) which puts it in the same peer group as Wegener and PCM.

specialists journals to advanced work- and process supporting tools on CD-Rom, online databases, software and internet services.

As of 2004, Kluwer outsourced its IT infrastructure to a U.S. based ICT company: CSC. The outsourcing arrangement included the management of work stations, integration of data centres and supplying the help desk function and had a length of 5 years. 23 former IT employees of Kluwer were transferred to the staff CSC.

Appendix B: Outsourcing incidents summary

ABN Amro 2005 5 year Het Financieele

Dagblad 2-9-2005 IBM

Ahold 2005 5 year Het Financieele

Dagblad 15-10-2005

EDS, Atos Origin, NCR

Avebe 2003 Het Financieele

Dagblad 8-5-2003 Getronics

Delta

Lloyd 2004 7 year

Het Financieele

Dagblad 17-2-2004 IBM

DSM 2002 3 year Het Financieele

Dagblad 9-7-2002 Getronics

Essent 2003 Computable.nl 27-6-2003 IBM

Gas unie 2005 Computable.nl 9-9-2005

Heijmans 2006 5 year Computable.nl 9-2-2006 Atos Origin

ING 2005 5 year Het Financieele

Dagblad 5-7-2006

Accenture, KPN, Getronic, Atos Origin

KPN 2001 4 year Computable.nl 3-8-2001 Atos Origin

Nuon 2003 5 year Het Financieele

Dagblad 22-12-2003 Atos Origin

PCM 2003 6 year Het Financieele

Philips 2004 5 year Het Financieele

Dagblad 3-12-2004

Dell, Getronics, Atos Origin

Shell 2001 3 year Het Financieele

Dagblad 7-2-2001 Getronics

SNS Bank 2004 3 year Het Financieele

Dagblad 18-5-2004 Unisys

Stork 2003 Het Financieele

Dagblad 3-6-2004 Getronics

Unilever 2000 Het Financieele

Dagblad 23-8-2000 IBM / Compaq

Wegener 2005 3 year Het Financieele

Dagblad 16-12-2005 Getronics PinkRoccade Wolters Kluwer 2004 5 year Het Financieele