IT Infrastructure: Selecting a vendor

It indeed has been a long wait – for me since the last post and for you as well to take the discussion on IT Infrastructure outsourcing forward.

In our last posts we reached a conclusion that outsourcing makes senses and we looked at areas we can outsource. So now that you are ready for IT Infrastructure outsourcing, the next question is: “Where and to whom?”

Well..think of this as the one of the top three service needs for your Business continuity and that will allow you to decide on the parameters needed for the right location and the right vendor.  Managed Infrastructure services demand a lot more than pure skills or manpower. It’s about managing and handling the basic yet most critical needs of the organizational IT.  

Continuing my focus on the needs and constraints of small and medium businesses the first aspect we’ll focus is the parameters of vendor. Outlining a few critical ones is not difficult. Lets start with the internal factors.

First and foremost is to select a reliable organization with proper alliances and extensive experience in managing IT Infrastructure for your kind of business.  Remember every other aspect of the engagement can be monitored, controlled and corrected but a mistake in selection can take you N. Korea instead of Vagas.  Make sure your RFI document asks for all the critical information regarding the foundation, the management, the stability and the clientele of the organization. Also important is to understand how deep their relationship is with major infrastructure hardware and solution providers. The stronger their alliances, the better their access to knowledge and resource pool, both very important at the time of crisis.

Next in line is the vendor’s own infrastructure like the power supply, reliability and speed of internet connections and backup planning. Very important to adjudge the vendor‘s arrangements for a 24/7 operation in case that important to the engagement or future scalability.  The principles remain the same here as in any industry, the stronger the foundation the better the result.

Trained and certified staff with adequate knowledge of your infrastructure setup and its components and the key to any outsourcing engagement. Cross check the information supplied in the RFI to ensure the vendor has in-house staff for all the key skills your engagement asks for.

Beyond these internal factors, the location of your outsourcing provider with respect to the political and socio-cultural stability of the region is the biggest external factor to stress upon. A safe choice shall be the region with:
-          strong democracy and political stability
-          local government policies towards IT as a primary contributor to the service sector
-          readily available workforce, trained and employable

Reliable internet through high speed dedicated lines and broadband connections have made the world a smaller yet virtual place to support businesses. You could choose between a local provider, near-shore provider and an offshore vendor, the above factors are taken care of.

The final factor is cost and I’m sure not much needs to be said about this. It’s always better to choose a provider who offers the optimum mix between low costs and qualifications on the above parameters. When it comes to cost, we are all smart :)

Once you choose a vendor and finalize the engagement, a critical requirement is of managing the vendor and monitoring the performance on a regular basis to ensure the success of the engagement. There are a whole lot of policies & procedures, tools & technologies that can be used to monitor vendor performance and manage the vendor effectively. But this we are going to talk some other time.

Till then remember any engagement has its own must haves, good to have and luxuries at different price points. The choice is for you to make!!

IT Infrastructure: What to outsource?

The more I read and listen about the issues companies face in managing their IT Infrastructure, the more I get convinced that outsourcing IT Infrastructure services is the right thing to do. Last time I talked about my reasons supporting this move in any small or medium corporate.

So the next question arises, what to outsource and what not to?

The answer is simple. Let’s break down IT Infrastructure services into sub-services:
- Monitoring & Support: PC’s, Servers, Middleware, Database, Network & Applications
o Onsite Support, mainly for PCs and mission critical issues
o Remote Support
- Audits: Application Audit, Server Audit, Database Audit, Network Audit, Security Audit
- Consulting: Performance Engineering, Infrastructure Planning and Implementation
- Policies: IT Security, Network Setup, IT Access, IT Asset Management & Control

For each these services, the next step is to check if you answer the following questions as a “YES”:
1. Do you need global experience on a particular service?
2. Do you require 24/7 support for your Systems?
3. Do you need ongoing support?
4. Do you need an unbiased viewpoint?
5. Do you have cost pressures?

And these questions as a “NO”:
1. Do you have time and bandwidth to manage a multi-skill IT team in-house?
2. Do you have in-house knowledge base and expertise?

If that’s the case than you can outsource that particular section/service without any hesitation.

Simple isn’t it?

Ok..so now we know when to outsource your IT infrastructure services and what all to outsource. Next we are going to talk about where and whom to outsource.

“The journey of outsourcing is interesting if it results in value addition”

Outsourcing your IT Infrastructure

IT infrastructure is a broad term used for the complete IT setup of the organization including Hardware, Networking, Internet Services, Policies and Software. The broad definition encapsulates several services that are critical to the Business continuity of any organization as well as the long term growth strategies. Thus IT Infrastructure must be maintained and managed at an ongoing basis with extensive long term planning.

Outsourcing the IT Infrastructure services lets you broaden your IT team with subject matter expertise thereby enhancing the capabilities of your IT to meet the challenges faced by the Business. It also means that your organization is future ready from the IT perspective.

Example, if you need to get to access the health of your IT Infrastructure, hiring an expert for Infra Health Check will allow you to have a impartial view of the health of your IT Infrastructure thus providing you with Gaps and solutions for filling up the gaps in short and long term.

Similarly when it comes to selecting a platform for your next big software/web solution, an expert in Web Platform Selection can surely help you visualize the short and long term benefits and consequences of selecting a particular platform viz-a-viz an alternate platform. Thus giving you valuable insights and saving a lot of time, rework and above all valuable dollars.

As a large organization you surely have all the resources and bandwidth to manage the IT Infrastructure with a holistic view of the organizational success. So one may argue why a large organization should outsource IT Infrastructure Services?

Well the answer simply lies in the fact that IT Infrastructure is not our core strength. So why spend all the time and energy managing something that an expert organization with specific focus can easily do for you at probably the same or lower cost. Provided the vendor selection process is well defined and caters to all the specific needs of your already large and growing organization needs.

On the other hand if you are a small or medium size business, outsourcing your IT Infrastructure Management becomes a necessity for the following reasons:
1. You don’t have expertise. So hire an expert.
2. Your internal IT team has limited bandwidth in terms of time and knowledge. So let an expert help you with assessing you existing scenario, organizational needs, finding gaps, suggesting and running with a long term plan. This will ensure a boarder perspective your needs and planning that matches your growth plans and potential.
3. Hiring in-house staff for various skills like Audits, Security, Hardware, Servers, Software, Web etc will drain your IT budget.

So the decision, if thought from these perspectives, is a no brainier.

What all can you outsource? Well this is what we’ll discuss next.

When to Outsource Application Maintenance and Support??

I came across a question which i replied on LinkedIn and thought to share with you guys here on the blog as well. So here's the questions:

When does it makes sense to outsource, specifically the maintenance and support of an application system.

Here's my Reply: There are 3 possible scenarios.

First, if the application system was custom developed by a vendor than I’d suggest you have a support contract in place the moment the systems goes live. This allows you to negotiate lower costs and also gives the opportunity to the vendor to retain key talent/knowledge base required for the support.

Secondly, if you have developed the application in-house. In such a case ideally one should understand the support requirements on a weekly/monthly basis and thereon match it to the cost of in-house support resources. One significant factor is retention of right skilled resources at a stable cost. In-house resource cost shall keep increasing year on year whereas outsourcing cost maybe well stable or on a decreasing path with every passing year. If the Total cost of ownership of the application support team in a long run is much more as compared to the support requirements than going in for a outsourced support makes sense. Also over a period of time the application will need patches and upgrades. Remember, it requires significant knowledge transfer as well once you decide to outsource the support and there are quality/delivery issues that you might face. So the decision should be based on lowering the TCO and the NET benefit achieved by outsourcing.

Third scenario is of 3rd party application systems like Oracle EBS or Microsoft CRM. In such case support from these vendors can prove to be very costly. On the other hand you might be able to find offshore/outsourcing companies supporting your 3rd party applications at a much lower cost which maintaining service levels and quality standards. So one should select the provider who has expertise and experience in supporting 3rd party application products on a consistent basis and has good reference customers.

The overall choice surely has to be based on the NET VALUE ACHIEVED by outsourcing.

NOW is the best time to Outsource!

Nothing new in this! People supporting outsourcing always use every opportunity to suggest it’s the best time to outsource. So what’s so unique right now?

Well, right now you need it. Most companies are left with very few options but to cut or rather freeze their IT spend. Even if you decide not to introduce a single new IT system, your current IT comprising of systems, infrastructure and back-office support are going to need an efficient handling that too in a reduced budget scenario. On the other hand some IT systems might just become a necessity to maintaining your competitiveness. Club these two scenarios and you know right away that you need outsourcing.

Having explained and hopefully convinced you that you need outsourcing now lets see why it’s the best time. Here’s why:

1. Outsourcing has evolved and the right outsourcing partner can just provide you with the innovation and experience your IT need to help you remain competitive and in business
2. A deal today is going to be at-least 30% cheaper than it was a couple of years back. Recession coupled with increased competition has forced IT vendors to reduce costs and introduce more value in their service offerings. Also, lower employee attrition and reduced salary levels across the Industry coupled with falling real estate prices in India have helped the Indian IT vendors to reduce their costs
3. Whatever you save in an outsourcing deal today provide you with additional budgets for new but necessary initiatives
4. Most Indian IT vendors have introduced innovation as a success mantra and you get the direct benefit of this mantra

As an India based sourcing advisory, we not only help you understand when and what you can outsource but also assist you in selecting the best suited Indian IT vendor for you specific requirements. We walk alongside you through the whole outsourcing engagement to ensure highest delivery levels from the selected IT vendor and an unprecedented level of vendor management in your best interest. Evident cost savings is just another benefit.

So, you need it, and it’s the best time. Go for it.

Davos 2009 – The IT Industry Perspective

While world leaders discuss the larger issues impacting the earth, as a Sourcing Advisory consultant I am left to speculate what is going to happen in the IT Industry.

In Davos, the one common view observed was that 2009 is going to be a terrible year. An equally worrying aspect though is that the impact might well spill over to 2010 and 2011. And this is where I wonder what the biggest world leaders think of IT as an industry and its future. Will technology reinvent itself and hold the key to reviving the world economics?

Davos 2009 has strengthen the belief I expressed in my previous post that “Innovation” is going to be the key for the IT industry hereon. IT budgets are frozen world over and so when the economy reopens, budgets for IT expenditures would be extremely limited. Every penny spent will be accounted for and questioned. Thus IT will necessarily reinvent itself ensuring rate of return is justified in the larger framework of “higher value driven” expenditure policies.

Some facts that in my views hold the key are:

• The exponential growth of networks and internet
  
• Aspiring and demanding new generation of internet users and spenders
  
• Rising demand and availability of real time information feeds
  
• Capital available with large number of PEs, willing to bet on brighter ideas
  
• Green technologies taking center stage across industries

As an India based Sourcing Advisory, we are keeping a sharp eye on every economic move that impacts global enterprises and their engagements with IT as a whole; especially in India.

Davos 2009 - World Economic Forum: “the mindset”

Leaders from across the globe met at the World Economic forum in the backdrop of the biggest recession of our times. These are no ordinary times and this was no ordinary summit. We know this for sure because it’s not always that the head of states and governments in such large numbers (almost 40) are seen attending what predominantly is a global business forum.

Such large scale political participation raises doubts of Protectionism as each country tries to overtly protect its own economy and interests. Such a tendency can negatively impact the global business phenomenon and practices that have developed over the past 2 decades. These troubled times I know are bound to change the way business is looked world over. But I sincerely hope that the impact is not catastrophic to the very idea of globalization.

The three key discussions in Davos 2009 were:

1. Finding ways to stabilize and revive the current global economic system
2. Addressing the challenges of the “post crisis” world
3. Global fight for environmental protection

The good part is that world is already looking forward to a values and principle led post crisis world. That too “cleaner and greener”.

Will this strategic exercise of the biggest global business minds help changing the course of the future? Well, only time will tell.