Upcoming Changes in IT Infrastructure Outsourcing
We're starting to see a lot of change in the infrastructure outsourcing space, much of it as components of cloud computing.
Nov 05, 2008
We're starting to see a lot of change in the infrastructure outsourcing space, much of it as components of cloud computing. We spoke with three service providers in the IT infrastructure space -- CompuCom, HP, and Satyam -- to learn their insights on where today's changes are heading as far as their influence on service delivery and value proposition in the next few years.
Satyam, a global provider based in India, notes that remote infrastructure management outsourcing (RIMO) is opening up to delivery from offshore providers.
The North American economic environment is a significant driver of the acceleration of the RIMO model, and the cost benefit of labor arbitrage with offshore providers is attractive. "A lot of companies are now willing to change their model for managing infrastructure," says Anirban Dutta, head of strategic deals for high tech verticals at Satyam. "This is especially true in the mid-market, which is now focusing on RIMO as a key part of their business transformation initiatives."
With demand increasing, there is global play and aggressive competition among IT providers. That's good news for buyers, notes John McKenna, chief services and strategy officer at CompuCom. He predicts a lot of competition in the next three years among providers, which will influence the cost and quality of infrastructure solutions.
Process orientation
"Today you can't do BPO without ITO. As the two converge, tomorrow you won't be able to do ITO without BPO," states McKenna. And that creates a challenge. Companies have understood and documented business processes since the early ERP days 20 years ago, but infrastructure processes are less understood and documented.
The industry is now beginning to approach infrastructure from a stronger process orientation. ITIL and ISO 20000 are driving much more structure in infrastructure management. "As it becomes more process centric and the processes are more consistently defined, the services can morph," says McKenna. With consistent definitions and clarity around the inputs and outputs to a help desk, for example, service providers will be able to plug and play different kinds of services. The consistent, process-centric structure will then enable clients to have more agility. "They'll be able to drive more innovation and select different providers in different areas on a more frequent basis," he says.
He recalls, "Over the years we've seen a plethora of examples where a process wasn't clearly defined before it was offshored, or a process wasn't defined before it was automated, or a process wasn't defined before someone attempted to make it plug and play. Those efforts were not successful."
As managing infrastructure as a process evolves over the next five years, McKenna says we'll see "a lot of infrastructure process reengineering to deliver optimized performance." He explains that the next step beyond labor arbitrage is the automation of infrastructure processes. That automation can only happen successfully if there is a process. He likens infrastructure process reengineering to the BPR and ERP process optimization efforts of 20 years ago and predicts we'll see the same type of industry and tools grow up around infrastructure processes.
But there are two differences between the infrastructure process reengineering and the BPR/ERP of two decades ago. Unlike SAP's leadership in ERP, "as of now, there is no SAP equivalent in infrastructure," says McKenna. Secondly, an infrastructure delivery platform will be necessary to enable rapid and effective infrastructure process reengineering.
As an extension of that platform, we'll also see avatars for service desk agents to assess infrastructure, McKenna predicts. The avatars will be enabled by ancillary technologies bolted onto the delivery platform and will perform such tasks as remotely resolving basic infrastructure issues and automating and resetting passwords.
Managing infrastructure as a process is not, for example, giving a whole service desk to one provider to
Satyam, a global provider based in India, notes that remote infrastructure management outsourcing (RIMO) is opening up to delivery from offshore providers.
The North American economic environment is a significant driver of the acceleration of the RIMO model, and the cost benefit of labor arbitrage with offshore providers is attractive. "A lot of companies are now willing to change their model for managing infrastructure," says Anirban Dutta, head of strategic deals for high tech verticals at Satyam. "This is especially true in the mid-market, which is now focusing on RIMO as a key part of their business transformation initiatives."
With demand increasing, there is global play and aggressive competition among IT providers. That's good news for buyers, notes John McKenna, chief services and strategy officer at CompuCom. He predicts a lot of competition in the next three years among providers, which will influence the cost and quality of infrastructure solutions.
Process orientation
"Today you can't do BPO without ITO. As the two converge, tomorrow you won't be able to do ITO without BPO," states McKenna. And that creates a challenge. Companies have understood and documented business processes since the early ERP days 20 years ago, but infrastructure processes are less understood and documented.
The industry is now beginning to approach infrastructure from a stronger process orientation. ITIL and ISO 20000 are driving much more structure in infrastructure management. "As it becomes more process centric and the processes are more consistently defined, the services can morph," says McKenna. With consistent definitions and clarity around the inputs and outputs to a help desk, for example, service providers will be able to plug and play different kinds of services. The consistent, process-centric structure will then enable clients to have more agility. "They'll be able to drive more innovation and select different providers in different areas on a more frequent basis," he says.
He recalls, "Over the years we've seen a plethora of examples where a process wasn't clearly defined before it was offshored, or a process wasn't defined before it was automated, or a process wasn't defined before someone attempted to make it plug and play. Those efforts were not successful."
As managing infrastructure as a process evolves over the next five years, McKenna says we'll see "a lot of infrastructure process reengineering to deliver optimized performance." He explains that the next step beyond labor arbitrage is the automation of infrastructure processes. That automation can only happen successfully if there is a process. He likens infrastructure process reengineering to the BPR and ERP process optimization efforts of 20 years ago and predicts we'll see the same type of industry and tools grow up around infrastructure processes.
But there are two differences between the infrastructure process reengineering and the BPR/ERP of two decades ago. Unlike SAP's leadership in ERP, "as of now, there is no SAP equivalent in infrastructure," says McKenna. Secondly, an infrastructure delivery platform will be necessary to enable rapid and effective infrastructure process reengineering.
As an extension of that platform, we'll also see avatars for service desk agents to assess infrastructure, McKenna predicts. The avatars will be enabled by ancillary technologies bolted onto the delivery platform and will perform such tasks as remotely resolving basic infrastructure issues and automating and resetting passwords.
Managing infrastructure as a process is not, for example, giving a whole service desk to one provider to