Putting our imprint on technologysince 1921.

A c c e l e r a t i n g Y o u r S u c c e s s ™

Successful Outsourcing March 2008

Steve PhillipsChief Information Officer

A c c e l e r a t i n g Y o u r S u c c e s s ™

FY07 Revenue $15.68B• Incorporated in 1955 – NYSE: AVT 1960– June 30 fiscal year end

• ~ $6B market cap

• ~ 12,000 employees

• 73 countries

• Enabling Success from the Center of Technology™– Electronic components

• Avnet Electronics Marketing (EM)– Computer products

• Avnet Technology Solutions (TS)

TS38%

EM62%

Amer50%

EMEA31%

Asia19%

About Avnet

A c c e l e r a t i n g Y o u r S u c c e s s ™

Step 1: Making the Decision to Outsource

Benchmark first.

Where do we stand amongst

• similar companies in the industry?

• cross-regional internal

teams?

How do internal cost/service levels compare with potential third-party partners?

Actual Avg Pctl 25 Pctl 75

Client Help Desk LAN WinTel Unix

Mainframe

VPT WAN WAV

Cost

A c c e l e r a t i n g Y o u r S u c c e s s ™

Step 1: Making the Decision to Outsource

Consider offshoring to yourself.

• Take advantage of skills and cost efficiencies at overseas sites

• Employees benefit from same training, development and career opportunities

• Develop clear communication channels and project documentation methodology

A c c e l e r a t i n g Y o u r S u c c e s s ™

Step 2: Identifying a Partner

• Involve them in the decision-making process

• Explain what, when and why

• Be candid; stop the rumor mill

Talk to your team.

A c c e l e r a t i n g Y o u r S u c c e s s ™

Step 2: Identifying a Partner

• Can save you money and help negotiate a fair contract

• Outsource specialists: TPI, Morgan Chambers/Equa Terra

Hire a consultant.

A c c e l e r a t i n g Y o u r S u c c e s s ™

Step 3: Negotiating the Contract

Negotiate based on cost, but decide based on quality and people.

Allow your partner to make a reasonable profit.

• Avoid change-orders and/or poor service by negotiating a reasonable profit for your partner

• Consider open-book accounting

• People matter: handpick the outsource team

• Key players: outsource leader and in-house team leader assigned to project

A c c e l e r a t i n g Y o u r S u c c e s s ™

Step 3: Negotiating the Contract

Make a detailed SLA.

Plan for the end at the beginning.

• Include measurements of success that map to business objectives

• Guiding principle:

Provided service must be at lower cost and higher level of service than existing service

• Get a “prenup” in writing

A c c e l e r a t i n g Y o u r S u c c e s s ™

Step 4: Maintaining a Healthy Relationship

Even if you outsource it, you own it.

• Set priorities and stay in charge of the process

• Get updates from your team

• Provide political cover

• Give your partner feedback

A c c e l e r a t i n g Y o u r S u c c e s s ™

Step 4: Maintaining a Healthy Relationship

Use an independent company for quality assessment.

• Unbiased view of both in-house and outsource teams’ performance

• Motivation to get things done right the first time

A c c e l e r a t i n g Y o u r S u c c e s s ™

Summary

Action Plan

Determine Where You StandBenchmark first.

Consider offshoring to yourself.

Identify a PartnerTalk to your team.Hire a consultant.

Negotiate a ContractAllow your partner to make a profit.

Place quality before cost.Plan for the end at the beginning.

Iron-clad SLA.

Maintain a Healthy RelationshipGet independent QA.You own the results.