Posts Tagged ‘4954 IT Consulting’

by Oliver Schmid  – IAOP :: International Association of Outsourcing Professionals Member

1.) What is outsourcing?

For years, outsourcing has been on the mind of many business people but what one associates with the term outsourcing, might be conceived as something completely different by somebody else. The only common ground is the understanding to give a task or process that used to be performed internally to a third-party service provider for fulfillment.

2.) Types of Outsourcing:

Outsourcing can be as mundane as giving support to somebody else and might be as complex as having business core processes being performed by somebody else.

Typical tasks and/or processes that are outsourced can be:

  • Partial or Total Outsourcing: Some functions or tasks will be outsourced partially while other will be outsourced in its entire. Partial or complete outsourcing can also be seen differently and depends of the viewpoint (Customer / Provider) of the parties involved. It also depends of the overall functionality of the to-be outsourced operations and can often not be determined clearly.
  • There is outsourcing of only operational functions vs. outsourcing of functions, tools and personnel.
  • Business Process Outsourcing (BPO): Interpretation of the meaning of BPO varies and depends again on the point of view. From a customer point, it could be giving away an in-itself-closed-business-process for which the provider carries complete responsibility. From a legal aspect, it is imperative to define all roles and responsibilities in a contractual from and every party involved need to understand their individual responsibilities and the consequences for non-compliance.

3.) Goals

The possible reasons for customers to look more closely at outsourcing to are equally diverse and complex as its possibilities and approaches.

Therefore, only some of the usual motivations for outsourcing will be referred to here:

  • Focusing on core business:
    • An organization wants to concentrate its resources on its core business, and therefore functions that are not part of its core business will be outsourced.
  • Cost savings and optimization:
    • An organization wants to reduce its cost of doing business through outsourcing by creating a flexible cost structure, which is directly related to the performance of its service provider.
  • Purchasing skills:
    • An organization wants to benefit from the increased competence of the provider who considers the to-be outsourced function as its core business. Often, an organization also wants to reduce its performance risk through contractual reassignment of performance risk to its service provider.
  • Flexibility:
    • The provider can often offer the customer more flexibility in the implementation of the delegated services than it would have been possible to a customer with its limited resources and scope for action.

4.) An outsourcing project is divided generally into:

  • the preparatory and planning phase, which includes the Baseline analysis, defining goals and determining the future procedures,
  • the initiation phase with the selection of the provider. and the contract negotiations,
  • the implementation phase with the transfer and the Setup of the facility (or Transition to Operate) and finally the actual
  • the start of the actual operation

Looking at the continuous “life” of an outsourcing initiative the following phases will follow:

  • Review and optimization of relationship and implemented processes
  • At contract expiration either the transfer of all functions to a new service provider or the return of the outsourced functions to the organization (insourcing)

5.) Preparation & Planning:

At the beginning of each outsourcing, a strategic analysis is performed to determine which services or which divisions will be outsourced as well as where the interfaces between the internal and external providers will be in the future.

Following this phase the outsourcing scope will be defined, which will include the functional spectrum. It should definitely be avoided not to make any clear commitments at the beginning, because the scope is the basis for all further tests, the structuring of the outsourcing and the subsequent tender.

The next step would be the internal analysis (assessment) of all areas that are part of the scope:

  • What personnel and which assets are involved?
  • What type of data is available?
  • Current Cost?
  • Which services are currently performed internally and which are already performed externally?
  • To which extend have processes and services already been documented?
  • What is the quality of the currently performed services?
  • Is delivery of services consistent with the according service performance documentation?
  • Are there any legal aspects that need to be considered; e.g. transfer of licenses?
  • Are there any industry-specific aspects to be considered (e.g. in the financial area)?

Oliver Schmid has extensive experience in offshore outsourcing to the Philippines, nearshore outsourcing to Canada and onshore outsourcing of matrix oriented call centers.  He is also versified in outsourcing of data center operations and data center monitoring and support. In addition Oliver Schmid participated in various 3PL and Supply Chain outsourcing initiatives.

Oliver Schmid, Basic PLUS Author

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The Structure of Outsourcing by Oliver Schmid is licensed under a Creative Commons Attribution-ShareAlike 3.0 Unported License.

OLPC: XO internet access

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What are the indicators that would help you in deciding whether outsourcing network services should be an option considered?

Network services and operations are a given in todays business environment. There are a commodity, like electricity, gas and water. As long there is not interruption to supply nobody thinks about it. It is just there . . . until . . . it’s gone. And then everybody gets upset and wonders why no back-up plan has been put in place.

Like … what just happened and now ?!

Would you consider driving you car without liability insurance?

Would you consider being without health insurance for you or your family?

Would you consider doing business without the proper business liability insurance in place?

Why then would you not want to protect your network infrastructure, which has become the life line fo your business?

Today many responsible businesses have put some form of protection in place, in form of uninterruptible power supplies (UPS) redundant network infrastructure components and maybe even redundant Internet Service Providers. But how many business can afford a generator to keep a data center up and running for a day or two or maybe even longer. Uninterruptible Power Supplies will usually only to keep your networking equipment and attached nodes (servers, pcs, laptops, etc) up and running for a very limited time and will allow for a graceful shutdown, in order not to lose any data or encounter any data corruption.  Most of the times there is nothing in place to keep your network up and running for extended periods of times.

Some organizations are even going that far to put in redundant Internet access connections (T1, DSL, etc.), but often it is forgotten that even redundant lines may be coming from the same Central Office (CO) and are fed through the same main line that feeds into the area of business. Most internet access outages today occur either at the CO or with-in the last mile (the distance from the CO to a defined business location). It could be networking equipment failure at the CO or line/fiber cuts at the last mile.

In order to avoid such situations you have to request to have your redundant lines being serviced from a different CO. Depending on the size of your business some providers may be hesitant to do so or only at a drastically increased rate.

Some organizations allow their staff to connect from home offices and other remote locations, but what good does it do if the lines to your place of business are down.

Here is where outsourcing network services can make sense.  An option is to set up a redundant network infrastructure at a remote location that sort-of replicates your in-house data center environment.  This would allow, in case your data center equipment is not accessible for whatever reason, to connect to the remote off-site redundant data center location. Settings and data volumes would be replicated between the sites regularly.

The remote outsourced data centers also have external network redundancy put in place either through multiple access lines from various COs or through so-called SONET rings.

Many of these outsourcing providers also offer services that will monitor your internal network infrastructure and there for be able to react accordingly at any given time.

Your argument may now be, my network has never been down ever. Why should I do it. Consider it insurance. Just because you have not been ill in a long time does not mean you will never be ill and need a doctor. The question is not, whether you will have considerable network downtime that will seriously impact you business, BUT WHEN!!!. It is just a matter of time.

Another scenario that would justify network outsourcing could be rising IT expenses. Networks today grow organically. A piece is added here and another piece there and over time your network has grown to a proportion a size as it had not been intended in the first place. A the same time your cost for upkeep and maintenance have grown. The personnel infrastructure to support such a network may not be in place anymore or has grown to such an extend that the cost is hardly justified anymore. It may lead to budget restrictions, leading for some of the network infrastructure to become obsolete or outdated and there for not supporting or negatively impacting your overall business.

With outsourcing some or all of your network services & operations, expenses and personnel cost can be brought in line with the overall business requirements.

Having performed many network services, network operations and data center outsourcing projects I have the experience to work with you on a solution that fits your needs, requirements and budget.

by Oliver Schmid