Basman | Explore: IT Outsourcing

Luis Folch Rodriguez of Dresdner Bank AG in Frankfurt, Germany, asked me per mail a couple of days ago, why I’m talking here so much about sourcing projects in large international companies. What about the small and medium businesses (SMB)?. Good point. Take into account that in Germany talking about SMB’s we are talking roughly of enterprizes in the range of small sized business with 100-1,000 clients (PC’s, workstations) and medium sized with 1,000-8,000 clients maybe. This is of course dependent from your specific point of view.

First of all, outsourcing is a mass and commodity business in my opinion which operates with narrow margines. This means you have to generate a lot of business to make your money. Since aquisition, contracting and transition of work is the most expensive, unforeseeable and most risky part of this business, the large service providers tend to target large international potential customers. The strategy behind this is, the chances you can generate high revenue stream of one single contract is higher than with a single contract with a SMB. So large providers are concentrating themselves on large customers. And really professionally none on SMB.

In return large customers tend to demand for high-customized services. They want to get rid of the responsibility of their (legacy) systems and people. This is OK if one single customer can generate the needed critical mass in business.

But this won’t obsiously work for the typical SMB market. This attitude simply won’t pay off. It would be way to expensive and the revenue stream would be insufficiant per contract. The strategy: You have to generate the critical mass via generating a mass market for SMB. Let’s have a look. How do we specifically focus and master the SMB market:

1. by perfect tuning on the needs of the goal market (by size and/or industry)
2. by consistent standardisation of our service products and technologies
3. by merciless streamlining, rationalization and automation of our seemless service and support processes (consolidated central system monitoring & management and customer care services)
4. by an intelligent and complete logistics chain for material, spare parts and consumption goods
5. by an extremely fine-grained and exact controlling of finances and quality
6. by a well-balanced globalization of sourcing
7. by a world-wide expansion of the business model
8. by a perfectly trained staff and personnel
9. by intelligent instrumentalization of web-based applications
10. by additionally creating new marketing and sales channels for this concept

Each single item in this list can in return be outsourced to diverse highly specialized subcontractors, too. At this moment there is not one single (global) service provider capable of this. This would be quite a challenge. You need a new type of IT service provider for this. The business modell would be a sort of McDonalds for the IT industry.

The existing IT service providers are far from beeing effective or efficient. Not even for large customers.

This is something I would be really very interested in. Any inquiries? Let’s work this out!

TPI Collaboration with Industry Leaders Offers Guidance for Successful Contract Negotiation Strategies

TPI, the world’s leading advisor to global corporations on all facets of service strategies for business support operations, today announced the completion of the first of four evolutionary innovation initiatives for the global outsourcing industry.

Large enterprises are looking to optimize their business operations — including finance, procurement, accounting and even human resources — through the best combination of insourcing, offshoring, shared services and outsourcing, according to TPI, a leading sourcing advisory firm that today is relaunching its brand to reflect its evolvement along with that of the overall marketplace.

TPI has unequalled access to the range of complex and inter-related contracting terms that result from negotiations between corporations that are buyers and the industry’s leading service providers. In response to feedback from participants on sourcing services buying and selling sides, the company is publishing guidelines to the industry on the current state of “center points” for certain contracting terms.

The categories of guidance offered via TPI’s recommended Terms & Conditions Center Points document, available at http://www.tpi.net/knowledgecenter/innovationagenda/, include:

• Services definition
• “New services” definition
• Service levels
• Post-contract true-ups
• Cost of required consents
• Accountability for managed third parties
• Termination for convenience
• Intellectual property leave-behind rights post-termination
• Approval rights to move service locations

TPI will report shortly on the remaining three core Innovation Agenda items.

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Enhancing operational ITSM - The new ITIL aims to ease day-to-day service management.

As the IT organization becomes an increasingly critical link in the business value chain, a highly effective IT Service Management implementation becomes increasingly essential. Based on the comprehensive set of management best practices spelled out in the internationally accepted IT Infrastructure Library, ITSM can be instrumental in optimizing service quality, improving service levels, reducing service delivery costs and maximizing the business value of IT.

ITSM has a particularly vital role to play in the operational arena, which encompasses all the activities involved in IT service delivery and service quality monitoring, management and measurement. In fact, it has become clear that if your organization has not yet moved to implement ITSM best practices relevant to everyday service management operations, you’re likely to be at a distinct disadvantage as you confront key questions facing virtually every IT organization:

• Are you equipped to consistently meet your service-level agreements?
• Are processes in place to ensure continuous business-IT alignment?
• Does the business agree that your organization is delivering significant value?
• How do you cost-justify needed IT investments?
• How can you spend less on routine IT service maintenance — and use the  savings for IT service innovation?

Which service-related investments are likely to bring the highest payback?
Addressing these key questions, operational ITSM helps IT organizations align with the business and become more agile and adaptable to dynamic market conditions. But customer needs and priorities change. New governance models emerge. Technology advances. New standards are issued. New regulations are promulgated.

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Getronics introduced its innovative, modular Future-Ready Workspace solution developed specifically to empower people to work more productively.  The Future-Ready Workspace is the result of Getronics’ more than thirty years’ of experience in delivering quality solutions in workspace and applications services for many of the global Fortune 500 companies.

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Cultural differences are often blamed for merger failures, but the proof of this is hard to pinpoint in “real world” analysis. One interesting “laboratory” study seems to show irrefutable evidence that culture is a significant barrier to unlocking post-merger value. The implications and insights are important considerations for effectively managing an integration – or, for that matter, any significant change in business models such as shared services or outsourcing.

Many if not most mergers fail to realize their full potential or just plain fail. This happens not necessarily as a result of a strategic flaw in the marriage or even poor integration, we are told, but because of something called “culture” or, more precisely, cultural differences between the two pre-merger entities. Blaming culture for underperforming mergers is easy. Of course, proving it is much harder. Culture is a difficult creature to define or measure, so how to pinpoint it as a culprit? Click here to view the white paper by Alan Hanson, TPI Project Director.

neoIT Previews New Book on How Successful Globalizers Realize Superior Returns Compared to their Peers 
 
neoIT, a leading services globalizationSM consulting firm, is providing a sneak-peak of its upcoming book on services globalization. The new book will be published in early 2007 and separates truth from fiction when it comes to successful services globalization programs.

As a follow-on to neoIT founder and CEO Atul Vashistha’s well-received book The Offshore Nation which was published in 2005, Mr. Vashistha and neoIT COO Eugene Kublanov will soon release their next book: Seven Secrets of Highly Successful Globalizers. The new book makes public for the first time the global practices that highly successful firms have in common.

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Most financial institutions face pressure to improve their levels of service while cutting costs. At the same time, they must be increasingly nimble in responding to customer demands and enhancing their competitive advantage. Sourcing, and in particular outsourcing, is often heralded as a solution to these challenges. Yet too many sourcing initiatives fail to deliver on their intended benefits. Instead, they result in dysfunctional operating models that lock in existing inefficiencies without addressing the root causes of poor performance or the future needs of the institution.

The remedy involves taking a strategic and holistic view of sourcing. With such an approach sourcing can act as a true enabler of operational and IT excellence, recognizing that the optimum operating model may span multiple functions and geographies which do not lend themselves to a “one size fits all” approach and involve a number of different sourcing solutions. This approach can lead to more significant and sustainable benefits than tackling processes through a series of isolated, tactical outsourcing decisions.

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Oftentimes, discussions around SOA focus more on technical and development issues. This first in a series of Consultants’ Roundtable podcasts delves into the business value of SOA.

Selling SOA economics inside of enterprises today is as important as executing on SOA deployments. Both business leaders and IT leaders are learning how to begin the short- and long-term cost benefit analysis for SOA. It’s complicated—and it varies from company to company.

To learn more, Dana Gardner, president and principal analyst for Interarbor Solutions and host of his own Briefings Direct podcast series, brings together two HP Services executives in a high-level discussion on how to make the business case for SOA.

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Although restructurings are an increasingly important part of the outsourcing life cycle, many companies look at contract restructurings too late and consider them from too narrow a perspective. Organizations want to be able to adjust quickly to significant changes in their own business and marketplace and to take advantage of developments in the fast-paced outsourcing market. Yet, despite the intense competition among service providers for restructuring-related revenues, many clients will fail to realize any additional material benefit.

Clients need to review all of their options thoroughly and objectively. Organizations must be aware of the danger of looking for a solely contractual solution for what could be a much broader management problem. Restructuring is best considered within a broader sourcing strategy that should be informed by the overall strategy for, and needs of, the organization. Within this context, it is then possible to outline the plan for the specific restructuring by defining the business drivers and objectives going forward. Organizations must also look candidly at their ability to manage outsourced relationships and to ensure that their governance arrangements are an integral part of the restructuring project.

It is vital for the client to create leverage before entering into any restructuring. The service provider has no incentive to concede margin or contract terms without good cause. Effective leverage only comes from having or developing viable alternatives, which the client must be ready, willing, and able to execute. Timing is also crucial. If a company has not started the planning process two years in advance, there is significant risk that its options will be constrained and its negotiating position compromised.

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I’m scanning twiceaday - early in the morning and late in the evening - all press releases and news of about 60 corporate sites. Most of the time I have to do this work manually  because these sites are organized awfully. I ask you sincerely, dear press officers of the multinational mega corporations, how is it possible (and why is it necessary in your opinion) to deliver press releases in PDF format? Or to hide them deep in your sites where I have to click 5-6 times to reach them?

Recently Todd Zeigler made a discussion roundup of ways to improve newspaper websites. Mostly all of what he recaps in his list is true for press releases, too! Sometimes I believe press officers have never heard of the internet or any digital revolution yet … Everybody who releases a message to the press today in a PDF format should be divided in to four parts after being tarred and feathered!

Here is a urgent and important todo list for press officers (inspired by Todd):

1. Get rid of all registration
2. Provide full text RSS feeds (suitable for feed readers and news aggregators)
3. Start using tags
4. Use links in your text to relevant content
5. Implement a news ticker on your frontpage
6. Work with external “social” websites (like weblogs etc)
7. Offer alternative views of your content
8. Modernize your site’s graphic design
9. Learn from Craigslist
10. Make your content work on cell phones and PDAs
11. Allow readers to comment on every story
12. Improve search features
13. Use better and cleaner HTML (suite of evaluation tools here)
14. Open up your archives
15. Provide multilingual Versions
16. Offer supplemental content
17. Open up the letter to the editor process

Do your homework! Hey, we are already in the Third Millennium!

[Hat tip for Heiko Hebig for the link to Todd's post]

HP announced IT service management (ITSM) enhancements to its mission-critical support services portfolio that help customers plan, implement and continuously improve IT service quality.

The two new services incrementally and continuously tune IT service management across people, processes and technology to help customers chart a course toward operational excellence as part of an ongoing support relationship.

The services are enhancements to HP Proactive 24 Service and Critical Service offerings and include:

• HP Fundamental ITSM Improvement Service – which provides ITSM assessments, service improvement planning and ongoing assistance to increase maturity in service delivery, support and technology management.
• HP Expanded ITSM Improvement Service – which provides customers with ITSM assessments, formal service improvement plans, assistance in implementing and managing the plan, and ongoing ITSM assistance. This service helps customers improve service quality and mitigate risks to IT availability while increasing maturity in service support, delivery, technology management and IT governance.

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Oftentimes, discussions around Service-oriented architecture (SOA) focus more on technical and development issues. This first in a HP series of Consultants’ Roundtable podcasts delves into the business value of SOA.

Selling SOA economics inside of enterprises today is as important as executing on SOA deployments. Both business leaders and IT leaders are learning how to begin the short- and long-term cost benefit analysis for SOA. It’s complicated—and it varies from company to company.

To learn more, Dana Gardner, president and principal analyst for Interarbor Solutions and host of his own Briefings Direct podcast series, brings together two HP Services executives in a high-level discussion on how to make the business case for SOA.

Terri Bennett Schoenrock, executive director of SOA services and J2EE open source programs, and Andrew Pugsley, worldwide lead for SOA service development, join Gardner in examining the pay-offs and opportunities that can result from making the move to SOA, as well as ramping-up with HP’s SOA assessment process. Plus, several user case studies demonstrate how to measure success.

Download or listen to the podcast (30:40 mins | 14.9MB)
Read the transcript

Reference: The website of the Open Service Oriented Architecture (OSOA) collaboration

Common Goal to Provide Standard for Describing System Information in XML Format

BEA, BMC, Cisco, Dell, EMC, HP, IBM, Intel, Microsoft and Sun today announced they have published a draft of a new specification that defines a consistent way to express how computer networks, applications, servers and other IT resources are described — or modeled - in extensible markup language (XML) so businesses can more easily manage the services which are built on these resources.

As a result of joint collaboration, the open, industry-wide specification defines a common language for expressing information about IT resources and services. Called the Service Modeling Language (SML), the specification enables a hierarchy of IT resource models to be created from reusable building blocks, rather than requiring custom descriptions of every service - reducing costs and system complexity for customers. The group plans to submit the draft specification to an industry standards organization later this year.

SML addresses a growing industry need as a result of the numerous ways to represent the same IT resource. Besides being inefficient, the use of different formats leads to two problems. First, because the tools and management applications use different formats, they don’t speak the same language. Therefore, the information must be translated, which can lead to technical details being lost or misinterpreted. Second, the use of different formats may require IT architects to use written descriptions or sketches to convey information about resources. Such descriptions must then be translated into a form that tools and management applications can consume, which is a manual, error-prone process.

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New R&D activity part of $450 million commitment to SOA initiative

Accenture plans to invest $450 million over the next three years to accelerate the growth of its service-oriented architecture (SOA) capabilities. The effort, aimed at helping companies realize the full benefits of service-oriented architecture, includes a new R&D lab, a blueprint for SOA implementation, and expanding Accenture’s portfolio of cross-industry offerings.

The goal of the new lab, the Accenture Technology Lab for SOA Innovation, is to accelerate the development of SOA applications customized for specific industries, including healthcare and financial services. The lab’s innovations — including new tools and methods — will help reshape legacy computer systems into applications that deliver the full benefits of a service-oriented architecture. The lab will be a joint effort between all four of Accenture’s research and development facilities, which are located in Chicago, Palo Alto (Calif.), Sophia Antipolis (France) and Bangalore (India).

Accenture has also developed a blueprint for SOA implementation, comprising a scale that divides implementation into four levels. Accenture believes that most SOA initiatives today fall into the first two levels. Maturation begins in the third level, with full benefits realized in level four. The lab will contribute to the development of level-four applications.

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HP stellt ein neues IT Shared Service-Portfolio (ITSS) vor. Mit diesem Angebot können Unternehmen ihre IT-Ressourcen effizienter gestalten und ein einheitlich hohes Service-Niveau erreichen. IT Services, die bislang an mehreren Stellen im Unternehmen erbracht wurden, lassen sich damit an einer zentralen Stelle zusammenfassen. Die Kostenreduktion ergibt sich aus der Spezialisierung auf bestimmte IT-Dienste, die somit effizienter bereitgestellt werden können. Das HP IT Shared Service-Portfolio ermöglicht Unternehmen, ihre IT reibungslos auf ein Shared Service-Modell umzustellen und so IT-Dienstleistungen intern als auch extern anzubieten.
 
Gemeinsam stark: HP ITSS und HP SOA

Zusammen mit der HP Service Oriented Architecture (SOA) übernimmt das neue Angebot eine Schlüsselfunktion in HPs Adaptive Infrastructure-Portfolio. Mit HPs ITSS-Lösungen können Unternehmen ihre Geschäftsprozesse  beschleunigen und die unternehmensweiten IT-Ressourcen optimieren und rationalisieren - inklusive Organisation, Struktur und Governance. Zudem erhalten sie einen flexibleren Zugang zu Shared Services und können zwischen zwei Modellen wählen: einem Top Down-Ansatz in Form einer Transformation mit der IT-Organisation als Ausgangspunkt oder einem Bottom Up-Ansatz, der mit einem Utility-Modell für die Infrastruktur startet.

HP IT Shared Service Transformation-Modell

Das ITSS Transformation-Modell von HP bietet den Kunden Unterstützung während des Wechsels auf ein Shared Services-Konzept, und zwar von der Planung bis zur Einführung. Das Paket umfasst folgende Leistungen:

• Durch den IT Shared Service Transformation Visioning Workshop erhalten Unternehmen eine Übersicht über die Vorteile des Shared Services-Konzepts in der IT. Zudem zeigt er die Konsequenzen auf, die sich aus dem Shared Service-Modell für IT-Dienstleistungen ergeben.
• Der IT Shared Service Transformation Planning Service hilft den Kunden einen umfassenden und auf das Unternehmen abgestimmten Transformationsplan zu entwickeln.
• Der IT Shared Service Transformation Design and Implementation Service bietet professionelle Unterstützung bei der Implementierung der im Transformationsplan identifizierten Projekte.
• Steuerungs- und Management-Lösungen einschließlich Governance Services oder Service Lifecycle Management (SLcM). Sie ermöglichen unter anderem: Dienstleistungs-Kataloge, Service-Portale für automatisierte Beschaffung, Zugangs- und Authentifizierungsmanagement sowie Rücknahme-Mechanismen.

Das HP IT Shared Service Utility-Modell

Das HP IT Shared Service Utility-Modell bietet vorkonfigurierte Shared Service-Elemente. Diese ermöglichen den Unternehmen eine gezielte Implementierung von einzelnen IT Shared Services, ohne dass sie die gesamte Organisation umstellen müssen. Das Modell beinhaltet zunächst folgende Angebote:

• HP IT Shared Infrastructure Utility für Entwicklungs- und Test-Umgebungen. 
• HP IT Shared Messaging Utility für Microsoft Exchange Server. 

Dienstleistungen mit Qualitätssiegel

Auf der Basis von umfassenden, weltweiten Engagements mit vielen Kunden, hat HP ein Referenzmodell für IT Shared Services sowie die Werkzeuge für die Planung und Schwachstellenanalyse entwickelt. Ein Beispiel für den erfolgreichen Einsatz von Shared Services ist HPs hauseigene SAP Factory in Deutschland. In einem Shared Service Center in Böblingen verwaltet HP 380 ERP-Systeme mit über 30.000 Nutzern für mehr als 140 EMEA-Kunden. Die Kunden bezahlen nur die Leistungen, die sie auch beziehen.

Auch Certel aus Luxemburg setzt mit Hilfe von HP erfolgreich auf Shared Services: Der Anbieter von elektronischem Zahlungsverkehr sieht IT Shared Services als einen wesentlichen Bestandteil seiner Erfolgsstrategie. Certel fungiert unter anderem auch als IT Service Provider für lokale Finanzdienstleister.