QSM Associates Corrects and Replaces July 20, 1999 Release.

PITTSFIELD, Mass.--(BUSINESS WIRE)--July 20, 1999--

QSM Associates Introduces Outsourcing Management Practice

Telecom New Zealand to Rely on QSMA to Manage 10-year,

$800 Million IT Services Contract with EDS 

With the increasing reliance of IT shops on contractors for developing critical software, QSM Associates (QSMA) today introduced a service to improve results of outsourcing. QSMA's new Outsource Management Service allows an IT organization to identify and quantify baseline core business and technology measures, to both assess and manage ongoing contractor performance.

QSMA also announced that Telecom New Zealand will rely on the Outsource Management Service to monitor what is believed to be the largest IT services contract ever signed in New Zealand. The relationship includes a 10-year, $800million (U.S.) agreement for EDS to supply all of TNZ's IT services, and an alliance among TNZ, EDS and Microsoft to develop and deliver electronic business solutions to customers.

Michael Mah, managing director of QSMA, said, "Outsourcing is becoming increasingly important to business and government organizations alike. It allows an enterprise to focus its efforts and resources on its core business, while partnering with companies whose core business is IT. To make these complex alliances work, a set of comprehensive measures must be established to quantify potential improvements in process productivity. We are proud to have been chosen to help assure success for EDS and Telecom New Zealand in this landmark services arrangement."

According to International Data Corporation, spending on IS outsourcing services in the Asia/Pacific region reached $2 billion in 1998 and is expected to more than double to $4.05 billion by 2003, a five year compound annual growth rate of 15.1%. Cynthia Murphy, Senior Outsourcing Analyst for IDC, said, "The success of an outsourcing relationship can depend on the establishment of clear metrics to evaluate vendor performance. With strong growth in IS outsourcing spending expected in the Asia/Pacific region over the next five years, many organizations will need help measuring the value of their outsourcing contracts."

Despite the growing practice of outsourcing large, critical projects, many organizations still lack a practical and effective management control system for software development. QSMA's long history in this field brings hope to customers who have been managing contractors on little more than good faith.

Technology Partners International (TPI) an outsourcing broker with offices in Houston, London, and Sydney, played a major role in bringing the parties together. David McGee, TPI Area Managing Director for Asia-Pacific, said, "As we advise clients like Telecom New Zealand on outsourcing transactions, we look at ways to help make them successful once the contract is signed. Firms like QSMA add value by providing the measurements necessary to evaluate results the supplier is providing".

Auditing Project Management

QSM Associates acts as an objective project auditor, working with both the customer and supplier organizations to provide an unbiased framework for performance measurement. The company serves as the conduit to clarify communications on bottom line metrics that are crucial to productivity service level agreements. At the core of this new service is a methodology that has been proven over the course of 12 years in business, managing several well-publicized multi-billion-dollar contracts.

During the course of the work, both customer and supplier typically apply the SLIM Tool Suite. to manage development and gather the requisite core measures. QSMA consultants then determine a reliable benchmark of contractor performance. A regular program is then established to assess supplier performance against relevant customer benchmarks. SLIM, the leading software lifecycle management suite, includes estimation, benchmarking, tracking, and aggregating capabilities from multiple projects, groups, and timeframes.

QSMA and its partner offices have worked with BellSouth, Sprint, and other telecommunications suppliers in the U.S. and abroad, as well as leading industrial organizations such as Intel, Honeywell, Compaq, and several service organizations, including EDS, IBM Global Services, CSC, KPMG, Andersen, and PricewaterhouseCoopers.

SLIM is a registered trademark of Quantitative Software Management, Inc. All other marks are the property of their respective owners, and are used for identification purposes only.