CIOs ask for increased service levels, improved end-user response time through proactive management and reduced costs for infrastructure management

Today, a CIO is faced with increasing customer demands and shrinking budgets. In such scenario infrastructure management is a complex domain that needs constant attention. Outsourcing this domain can enable enterprise to focus on their core business while vendor delivers what he does best-manage infrastructures! In today's critical and complex environment, it is becoming increasingly difficult to monitor and manage IT as service. Infrastructure is getting very complex. With higher number of components involved and their integration besides communications becoming integral to IT and the business getting increasingly dependent on ICT, the need to outsource has become important. This is because in house competencies are difficult to build and retain.

Most of the enterprises are currently outsourcing help desk services, asset and configuration management, desk side support, network management, server management, security management, application monitoring, end-user computing and data center management. Most of the IMS activity is verticals like Hi-tech, BFSI, manufacturing, telecom, and ITeS verticals. And verticals like SMB, public sectors, government and education sectors have a tremendous potential going forward.

As quoted by various experts, the global market size of infrastructure management services (IMS) falls between $86-150 bn.

According to a Nasscom study 2005, an estimated 40-60% of the overall IMS pie may be efficiently delivered through a global delivery model. This translates to a market potential for remote IMS of approximately $ 55 bn.

	EXPERTS PANEL
	Anant Gupta, COO, HCL Comnet Heera John, country manager, Services & Solutions Marketing, Technology Solutions Group, HP India Prateek Garg, MD and CEO, Progressive Infotech

TOUGH CHALLENGE
The challenge in front of a CIO is to evolve an IT infrastructure management strategy that leverages the existing investments and achieve increased service levels for his end customers, improved end-user response time through proactive management and reduced costs and increased flexibility. Some important drivers to go in IMS include quality, best practices, expertise, visibility, scalability, and SLAs in this domain.

India is the second fastest growing economy in Asia Pacific. We expect the GDP to grow 7.5-8% this year. When business is growing at such a fast pace, IT should be able to help and support the growth. In industries such as banking and mobile service providers, IT helps organizations to expand and offer new service offerings like Internet banking, SMS and value added services. This brings it's own challenges; challenges like attracting and retaining skills, availability of knowledge and resources with in-house IT team and the ability to manage IT and meet business requirements.

THE SOLUTIONS
Enterprises today have two options, in-sourcing and outsourcing. Both options have their advantages depending on the maturity and criticality of organization's IT environment. Outsourcing helps the CIOs to be free from operational hassles and focus on strategy and understanding business needs. It also improves employee productivity and brings cost advantage.

Automated tools as HP open view have been introduced to help effectively provide IT as an uninterrupted service. The deployment of such tools at each of dispersed location is not a cost effective solution; thus necessitating monitoring and management from a central place. Infrastructure management, therefore, is not only desirable but a necessity now.  

TECHNOLOGY/DEPLOYMENT TRENDS
Remote Infrastructure Management: According to IDC estimates, more than 85% of infrastructure components can be managed from a central remote location. These components encompass servers, databases, networks, security, applications, and e-biz. Through managing these components from a remote location, companies can cut down their cost of infrastructure operations and management by 40-60% while also gaining access to expert 'skill-on-tap' on a 24x7 basis. Gartner also cites remote infrastructure management as a mega trend and forecasts that most of its customers are likely to adopt this model.

Sourcing Engagements: There has been a paradigm shift from traditional total outsourcing to select or discreet outsourcing in the global market space.  More and more companies are shying away from the traditional models of IT Infratsructure service delivery practiced by the big five. The 'Total  or Full Outsourcing Model', proposition entails a third party service provider taking over the entire IT assets of an organization and running it with a combination of on-site and near-shore services. This 'lock-stock-and barrel' approach results in complete loss of control and flexibility on the part of the CIO. In the post 9/11 world of dynamic business cycles, such a model offered many challenges to CIOs and paved a way for new engagement models like our hugley popular co-sourcing approach with its underline on flexibility.

A mix of both discreet and strategic outsourcing deals is happening in India. While large enterprises are going for strategic outsourcing, smaller enterprises choose discreet outsourcing like desktop management, server and storage management and network management. The momentum for strategic outsourcing deals is expected to continue.

Selective outsourcing would remain a trend for a long time to come.

RECOMMENDATIONS
Badly planned outsourcing could result in erosion of service value and cost escalation, but a well-planned outsourcing decision can help you sleep better at night, knowing that the responsibility of deliverables is in safe hands.

• Don't get entangled in a long-term contract: Traditional outsourcers often try to persuade companies that only a long-duration agreement justifies the high up-front investment needed to provide great service. The suppliers are always looking for five and 10-year contracts, but do we have any idea where IT economy will be in five years' time from now? Both business and technology change so rapidly, it does not make sense to have a long and rigid agreement.

• Don't let responsibilities collide with those of the outsourcer: Surprisingly, contracts are frequently vague about exactly what the outsourcer's responsibility is versus the customer's. Without a patrollable boundary, neither side knows with certainty what it should be doing. The result-each side blames the other when things inevitably don't get done. The big problem seems to occur when businesses think that outsourcing obviates the need for any kind of corporate technology strategy. Without an internal IT strategy to drive the outsourcing process, both sides will face a no-win situation. The outcome is a sluggish operation with minimal oversight.

• Don't neglect to measure success/failure: The contract is the most important part of the outsourcing relationship. Parties to an outsourcing agreement often fail to set the parameters for measuring performance simply because it's a difficult and time-consuming task. The results can be disastrous. For a mutually beneficial relationship, insist on an ironclad contract that spells out performance measurements. The service level agreements should guarantee performance and link penalties to sub par performance, and detailed security and capacity provisions should be made. CIOs should define acceptable levels of performance in terms of business relevance.

Don't be a control freak: Companies often go into outsourcing expecting to retain control of how the particulars are carried out. Tempting, yes. But it's a big mistake. Forcing the outsourcer to do it your way prevents your hired gun from doing what it does best-leveraging its own experience and hard-earned best practices. Outsourcing IT infrastructure management is the transfer of ownership of a process to a supplier. It's different from consulting, where you own the problem but pay people to try to help you fix it.

Don't bet on a dark horse:  It's tempting to choose an outsourcer with an alluringly low price. But remember: Many of the new outsourcers have unproven track records and aren't as stable as the companies that have been around for years rather than months.

And picking a loser can have excruciating consequences. The result-likelihood of their succumbing to performance pressures are relatively high. The provider can abruptly decide to leave the business leaving you in a midstream situation.

It is important to choose vendors who can bring-in technology, knowledge, global processes and tools to improve the SLA, support and help business for overall growth. While cost advantage is important, quality is more important. Outsourcing is a long-term relationship between vendor and customer. So it is more of a partnership than a typical customer-vendor relationship. Both should be able to gain in the relationship.

Rahul Gupta 
rahulg@cybermedia.co.in