IBM's Front-End Outsourcing Plan

When most people think of outsourcing they envision large, complex systems being handled by a third party. IBM is looking to change that with its On Demand WorkPlace offering, which will outsource the ownership and management of desktop technology like PCs and printers for organizations. "Our customers are always asking us what else we can bring to the table to save them money," says Jim Bolton, program manager, output services at IBM Global Services. "It became obvious when looking at customers trying to manage their PCs, printers, PDAs, etc., that things were getting out of control. It is hard to put a finger on what you are spending on these things." With these new services IBM is applying the same expertise that made it possible for the company to successfully take out costs from the back-end of IT systems for thousands of customers, Bolton says. Companies no longer need to buy and keep track of PCs, printers, or even printing supplies, he adds. IBM believes the front-end of IT systems is the next frontier for significantly reducing technology costs. "It leverages strengths we already have," Bolton says, "since these items have to connect with help-desk interfaces and servers, areas where we are already strong." IBM's On Demand WorkPlace services allows businesses to acquire, maintain, and account for the technology their employees touch as a service offering on one monthly bill, which Bolton says can alleviate the headaches and unpredictable costs of maintaining separate fleets of printers, PCs, fax machines, copiers, and mobile devices. By providing these services under one monthly bill, customers only pay and account for whatever technology services they use, allowing them to save up to 30 percent of their maintenance costs. IBM also offers customers the option of having IBM handle the management and maintenance of non-IBM hardware, as one complete, variably priced service package. Bolton says that there has been a lot of interest in the program from IBM's customer base, especially since technology is advancing so rapidly. "There are a lot of companies with pretty old equipment out there; they need to make moves to stay competitive," he says. Companies with outsourcing needs of between 1,000 and 3,000 are IBM's current targets, though Bolton says that any company seeking to take the management of desktop technology offsite is fair game. According to IBM, the cost to maintain separate fleets of printers, PCs, mobile devices and other peripherals is staggering. Industry-analyst firm Meta Group estimates that maintenance and operations for a company's end-user environment can account for 80 percent of IT costs. For example, the average desktop PC maintenance costs a business between $2,000 and $5,000 per PC, per year, per person. Additionally, the total cost of printing is unknown for most enterprises. Industry researcher Gartner estimates that companies may spend an average of 1 percent to 3 percent of their revenue on output, making it one of the most overlooked and undermanaged assets of their front-end systems.
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