Posts Tagged ‘IT managed services’

What is IT outsourcing, businesses ask? What are managed IT services? And finally, what are shared services?

October 11, 2012

Although IT is now a fundamental part of the structure of a business, there is still a lot of confusion surrounding all the available management options. Search engine Google estimates there are around 135,000 searches each month for ‘What is IT outsourcing?’, 33,100 for ‘What are managed services’ and 27,100 for ‘What are shared services?’.

There is obviously a great need for clarification on the alternatives to managing the IT department in-house.

IT sourcing models

Generally, when certain business functions or operations are performed and managed by an external party, it is called outsourcing. In the case of IT support, many things can be outsourced: from the help desk to software development, from a small part of the department to all of it.

We normally define full IT outsourcing the practice of having an external provider take care of all IT support functions and operations: staff, hardware and software usually belong to the third party used, and are based at the provider’s site. This could also be located in another country or continent, taking the form of near-shoring (within the same continent) or off-shoring (overseas).

A different approach is to keep the infrastructure in-house and only outsource management and staffing to an external partner – totally or in part. When the IT department is kept in-house but completely managed by a service provider, you have a managed service. If only some staff members are managed by an external provider, like in the case where different service providers coexist in the same environment to keep competition high, it is called a co-sourced environment. Finally, managed sourcing is the practice of having some extra resources to cover for sickness, annual leave and peak in service as needs arise without having to employ contractors and going through a selection process, as these engineers are immediately procured and managed by a third party. Managed sourcing typically has a lesser supplier management framework associated with it and is suitable for quick, lower cost and high volume resourcing. This practice can lead to the supply converting into aco-sourced or managed service support service in time.

An externally managed IT support service can also be shared between a number of companies, for added cost benefits: this is a shared service, which can be especially efficient if the participating companies have similar needs and environments, and the number of those sharing is kept low. This model can also be adopted in part, limited to certain functions such as out-of-hours support or peak times.

Reasons for outsourcing

Why do people use outsourcing and managed services for their IT? There are many different reasons for this. A KPMG report entitled ‘UK Service Provider Performance and Satisfaction 2012’ shows how the drivers for outsourcing are constantly changing. If a couple of years ago the main drivers were financial – ‘cost savings’ for 83 per cent of respondents, and ‘financial flexibility’ for 41 per cent – there is now a shift towards a more holistic and strategic view of this practice. Whilst ‘cost savings’ remains very high (70 per cent) it is now followed by ‘access to skills’ for 51 per cent of participants and ‘quality improvement’ in 46 per cent of cases.

Overall, you can say that having access to skills and experience which are not present in-house is one of the main aspects of outsourcing the IT support function. Having a generally predictive cost (depending on the contract) and being able to control service quality through Service Level Agreements (SLA) are a near-guarantee for service desk cost-efficiency.

Choosing the right sourcing model

Every organisation has different needs and requirements, therefore their IT support needs to be personalised for maximum success. A pure model – full IT outsourcing or a fully managed service – can be effective for some organisations, but others may feel that a mixed model, integrating co-sourcing and shared services in their normal in-house service, works better for them.

Your service provider of choice needs to understand this and help you choose the right model for you, therefore both fit for purpose and fit for use. Having previous experience of your environment is also an important advantage, especially if IT has a strategic function for your organisation, such as in the case of banks, traders, law firms or some media companies. A thing which organisations wishing to use one of the many outsourcing solutions need to know is that the choice of service provider is as important as the choice of model.

A combination of trusted IT service provider and appropriate sourcing model is key to transform the IT function from mere business support to a business enabler. IT can then become a value-add and help organisations improve their service to their clients – with all the benefits this entails.

Ben Whitehead, Service Delivery Manager

Legal IT: A New Model to Suit Changing Demands

June 6, 2012

As law firms change in structure and size, often expanding globally, their IT support model also has to evolve. With a great deal of growth expected to come from overseas countries, particularly from Asia, some alternative thinking is required to accommodate the scaling of IT support services to meet the increased, non-local, demand.

Current IT support delivery models are likely to be centred around a large centralised Service Desk providing all in-hours support and which is provided by an in-house team.  Out-of-hours and global support is then provided by any number of different configurations, often including complex rota systems utilising staff and/or contractors, or an externally provided shared service (perhaps even a combination of the two).  Such 24×7, or ‘follow-the-sun’, solutions do work and may be reasonably inexpensive but are frequently difficult to manage and do not provide a consistent level of good service across all locations.

Additionally, we’ve also recently witnessed a change in demand from end-users based in what have traditionally been outpost office locations.  These end-users, aware that they’re based in locations of new growth, now expect the same level of service as their counterparts in the more established offices.  This means receiving the same quality, response and availability of IT support services.  Arguably, these demands are reasonable and there should no longer be a difference in the IT support received, regardless of location.

To summarise – with growth predicted to come from abroad, and with a demand for a consistent delivery of services, regardless of office location, a revised approach to the provision of IT support services is needed.

An alternative concept of providing IT services may be to work to the ‘troughs’ in demand and not the ‘peaks’.  Let’s explain what is meant by this.

The bulk of an IT support service, perhaps 70 to 80% of it, is provided during a core period and is utterly predictable.  This portion of the service represents the ‘trough’ in demand, i.e. it is unmoving, consistent and therefore easy to plan a team around.  The ‘peaks’ in demand are portions that are prone to variations, e.g. the magnitude of spikes in demand, the volume of out-of-hours support activity, or the support demands from overseas offices.  It’s the smaller and less predictable portion of the service (the 20 to 30%) that consumes a disproportionate amount of management time, whilst still resulting in an imperfect service.

The trough and peak concept essentially shifts the main focus of in-house service provision to the larger and unchanging part of the service, where service excellence is the goal.  A more scalable approach is adopted for the peaks which strive to meet the same levels of excellence as the main portion of the service whilst easily being able to deal with the variations, however subtle, in demand.

Traditionally, an IT support service must align its own capacity model with its demand curve, i.e. when demand for support begins to build on a weekday morning, then the Service Desk opens.  As the demand curve increases during the morning (to its peak at around 11am) so does the number of support analysts that are available.  Then, later in the afternoon, as demand falls, so does the staffing on the Service Desk until, ultimately, it closes.  At this point, an out-of-hours function takes over until the cycle starts again in the morning.  With out-of-hours support activity, a measured amount of resource is available that can manage the anticipated out-of-hours, and/or global support requirements, until the main Service Desk reopens.

The single biggest issue with the traditional method is that resourcing for both the in-hours support needs, and the out-of-hours/global demands, is based upon meeting the peaks in demand.  If the service needs to be extended, all that can be done is to add analysts to the capacity model which will see significant step change in cost.

The following line graph shows a fairly typical weekday demand curve (i.e. ticket logging activity by hour of the day).  Demand builds in the morning and tails off at the end of the day.  The main peak is mid-morning with a smaller peak in the middle of the afternoon.  In this example, the bars represent a capacity model based on 7 analysts working 7.5-hour days, with staggered starts, and an hour for lunch, with Service Desk opening hours of 7am to 6pm.

On the face of it, it could be said the capacity model is a good fit for the demand curve.  But on closer inspection, the capacity model has failings:

1) Demand begins to build before the Service Desk opens.  These calls may be picked up by the out-of-hours service, but the people manning that service will soon be finishing their shift, so they may just ‘log and flog’ so that the support can be picked up by the in-hours team;

2) Resource does climb throughout the morning in line with the demand curve – however, the maximum available capacity isn’t quite enough to meet demand at the busiest time of the day.  This may well lead to an increase in abandoned calls at this time;

3) Then, due to staggered lunch breaks, resource again doesn’t quite keep in step with demand;

4)  The analysts’ shifts end slightly ahead of demand, and finally:

5) The Service Desk closes, switching to the out-of-hours service, just before the day’s demand has fully settled down.

By working to the peaks in demand, our well-considered capacity model doesn’t quite fit demand (and nor will it ever), and if we need to scale-up in line with business growth, all that can be done is to add extra analysts and attempt to further match the capacity model, as best as one can, with the demand curve.

Managing resource for an out-of-hours service has similar challenges.  A capacity model must be derived that meets maximum demand.  If the out-of-hours service is based on staff, equipped with phones and working to a rota, such a rota can be very difficult and onerous to manage.  If the service needs to be expanded, all that can be done is to add resource to where the gaps are emerging, even if it means that the resources will be underutilised.

If, however, an in-house core service is delivered to the troughs (which will still be the greater part of the service), and a suitable high-performing shared service is identified which can handle the peaks, i.e. the lower-volume out-of-hours activity, peak time overflow and variations in throughput, then an improved and scalable service model will be achieved.

The following diagram shows the same demand curve but with a reduced in-house capacity model.

In this example, the box represents 5 analysts, as opposed to 7 in the earlier diagram (a 28.6% reduction in headcount).  This team would still manage 71.4% of the in-hours call volumes and can spend its time focusing on delivering an excellent service.  The remaining support, i.e. the peaks, the increasing and decreasing demands at the start and end of the normal working day, and the out-of-hours piece, can be handled by a shared service which integrates with the main in-house service, but which can manage variations in demand with ease, scale up or down when required, and may demonstrate cost savings.

To use a term that I like to use, this model allows you to concentrate on the steak and not the peas.  Instead of working very hard to manage the smaller percentage of support activity at the edge of your service, focus on the bulk in the middle, and utilise the availability of a well suited outsourced service to manage the smaller, less predictable volume.  Savings can be made, the all-round service improves, you have a scalable model that’s less onerous to deliver and your customers (all of them) are happier.

It’s worth finishing with some guidance on how to transition from the current model to a new one.  The answer is found in the data contained within your IT Service Management tool.  It is essential that your existing service is fully profiled, from ticket origin through to logging, first-time-fix, escalation, and finishing at resolution.  An effective data analysis process needs to be conducted on your ticket management data so that your full service, and how it is used, is fully understood.  This kind of analysis is typically above-and-beyond the standard reports you might get from your ITSM tool, but instead is a data-mining exercise which performs a distillation of your service, against which a new model can be defined.  With such an analysis behind you, the decision of how much to keep in-house, versus what to outsource, is a reasonably straightforward piece of cost analysis.  Whilst adopting the trough and peak model may seem too greater a step to make, the required due-diligence to see if it’s viable won’t impact the delivery of your services at all.  So, at the very least, it would seem to be a prudent move to investigate it as an option.

 

 

Jon Reeve, Principal Consultant

 

This article appears on ITSM Portal: http://bit.ly/LzkyGG

The GLOCAL IT Service Desk

June 27, 2011

‘Stay local, act global’ is the new mantra for IT departments

With companies becoming increasingly international and IT support more and more remote, the IT Service Desk finds itself dealing with a user base that often extends to an EMEA or global level. The idea of outsourcing to a service provider seems now more than ever a convenient and cost-efficient solution to many organisations – in fact, the IT outsourcing industry in the UK is now generating over £40 billion a year, accounting for 8 per cent of the country’s total economic output, an Oxford economics research recently revealed. Delegating management of the IT Service Desk allows companies to focus on their business whilst leaving IT-related matters such as Incident, Problem and Request management with their associated headaches – to the experts.

It is, however, wrong to think that a ‘global’ desk has to be based in India, China or Poland. Such an off-shore or near-shore solution might not be safe enough for those companies which need to keep a high level of control over the data and IP processed by their IT system, such as those in the financial, legal and public sector. But an outsourced Global Support team does not actually have to be physically located abroad – the service just needs to be able to reach offices and branches across the world, which surprisingly can be done even from Sevenoaks, London or from your very own headquarters.

In addition to this, choosing a managed service rather than a fully outsourced solution can prove an even better arrangement. In fact, whereas with full outsourcing and offshoring the level of control over the IT department can never be full because the whole infrastructure usually belongs to the provider, a managed service can provide a safer solution for those organisations which are very careful about security, such as those whose very sensitive or precious data cannot risk being stolen, leaked or lost. Many companies simply see value in knowing the people responsible for assisting their business.

Although a solution which is 100% safe does not exist, retaining ownership of the infrastructure and keeping the Service Desk in the office or near the premises means that there is a lesser risk of data security issues getting out of hand, being reported too late or being hidden. By using a trusted provider and retaining a certain level of control over the department, the chances of a security breach are therefore minimised.

A Gartner research published last month revealed that IT outsourcing is increasing all over the world: global IT spend by businesses increased 3.1% in 2010 amounting to $793bn, a slight rise from the $769bn that was spent in 2009. This shows that the market is slowly going back to pre-crisis levels of 2008, after which it fell by 5.1%. Companies are spending more even if the economic climate continues to remain uncertain and the fear of a double-dip recession is still in the air – clearly they believe IT outsourcing is worth the risk, and this could be because of the flexibility it allows them to have.

Some Support solutions, in fact, enable organisations to increase and decrease the size of their IT Service Desk according to need. This could not be so easily done within an in-house service: engineers would have to be kept even when not fully utilised, meaning inefficiency occurs, made redundant during low service needs or made to work harder and longer at peak times. If we apply this to a global scale and the implication of different employment law for each country, it gets unnecessarily complicated.

A Support services provider should be able to add and take out engineers and move them around flexibly, and some even have a multisite team hired expressly to go where needed at short notice within the provider’s clients. With this level of flexibility, the ties that bind organisations to providers can be more an advantage than a disadvantage during global expansion or difficult and rocky economic times.

Martin Hill, Head of Support Operations

IT Support: grow-your-own or buy organic?

May 12, 2011

IT support staff are for many companies what vegetables are to your body – essential elements for efficient functioning and critical to avoid major failures. Exactly like cultivating your own greens, having an in-house IT team may give you a sense of trust and control unlike other solutions. However, it is also expensive and time-consuming, therefore not always convenient.

A ‘home-grown’ solution may suit larger organisations that either have the need to train analysts to use their self-developed software, have security or strategic reasons to have total control over the IT department or have the resources (financial, human and time-related) to train and manage a large IT personnel base – although this is quickly moving away from the norm for even these sizes of business.

Other organisations, smaller and more prone to seeking cost-efficiencies even outside of the office, might find an outsourcing or managed service solution more suitable. Of course, getting engineers from a service provider is like getting veggies from a market stall or through online shopping – it is generally easier and cheaper, but the risk is that they are not trustworthy. The engineers provided by a third party are completely out of your control: you don’t know where they come from, if they were trained correctly or if they will harm your company by stealing data.

But this might not be a huge problem for small companies for which IT is not strategic. A full outsourcing or offshoring solution could suit organisations which do not need engineers with very specific knowledge or strict SLAs and for which data security is not a major issue. However, companies which do need security and efficiency, but also to cut down cost and access expertise they lack internally, would need a solution that merges control with delegation.

Going back to the vegetables metaphor, to balance the need for quality and reliability with the desire to delegate cultivation and management, you would probably go to a trusted organic greengrocer’s, where products feature quality labels, PDO and organic certificates, and a reliable, experienced source.

It is in fact important to carefully choose a support provider that can meet your specific needs, with certified, trained and up-to-date engineers able to meet targets measured through KPIs. Managed services, moreover, will allow the organisation to keep some kind of control over the IT department while leaving its management to the experts.

All in all, there isn’t one best choice: an organisation might find advantage in keeping the department in-house, having a co-sourced solution or outsourcing management or the whole department to a third party. The important decision is to choose carefully based on the organisation’s features, needs and goals so that IT can be used as part of their overall strategy for business success.

Pete Canavan, Head of Support Services

This article has appeared on Computing magazine and Computing.co.uk: http://www.computing.co.uk/ctg/opinion/2069345/support-grow-organic


Surviving IT spending cuts in the public sector

February 15, 2011

How to create cost-efficiencies in the post-Spending Review scenario

After the announcement of 25%-40% budget cuts last year, it is reasonable to expect IT to be one of the departments to suffer the most in public sector organisations. However, cuts in IT support and projects may bring inefficiencies and disruptions, which can then lead to real losses and increasing costs.  More than ever, CIOs and IT Directors at public sector organisations are taking various options into consideration, from quick-fixes to farther-sighted ideas, trying to find a solution that will produce savings without compromising on service quality and data security, and perhaps even increasing efficiency. Here are some common ideas analysed:

Solution 1: Reducing headcount

Firing half of your IT team will produce immediate savings since you will not have to pay them a salary the following months, but when Support staff is insufficient or not skilled enough to meet the organisation’s needs it can lead to excessive downtime, data loss, security breaches or the inability to access applications or the database. A ‘quick-fix’ such as this represents a false economy. Reviewing resource allocation and improving skill distribution at Service Desk level, on the other hand, can be a valid solution. Indeed many IT departments can find themselves top heavy with expert long serving team members where the knowledge supply out-weighs the demand. A larger proportion of lower-cost 1st line engineers with improved and broader skills and a fair reduction of the more deeply skilled and costly 2nd and 3rd line technicians can not only reduce staff spend, but also create efficiencies with more calls being solved with first-time fix.

Solution 2: Offshoring

Although the thought of employing staff who only ask for a small percentage of a normal UK salary may sound appealing, offshoring is not as simple as ABC. It requires a large upfront investment to set up the office abroad, with costs including hardware, software, office supplies and travel and accommodation of any personnel that manages the relationship with the supplier. Organisations are not able to afford that kind of investment, especially since this solution only creates cost-savings in the long term – but the public sector needs cost savings now. Furthermore, the different culture and law can represent a risk to information security: data could be easily accessed by staff in a country thousands of miles away and sold for a couple of dollars, as various newspapers and TV channels have found out. With the extreme sensitivity of data processed by Councils, charities and the NHS, no matter how hard foreign suppliers try to convince the public sector to offshore their IT, it is unlikely this will happen – it is simply too risky.

Solution 3: IT Cost Transparency

Understanding the cost of IT and its value to the organisation, being able to prioritise and manage people and assets accordingly and knowing what can be sacrificed, can help identify where money is being wasted, which priorities need to be altered and what can be improved. For instance, do all employees need that piece of software if only three people actually use it more than twice a year, and do you need to upgrade it every year? Do all incidents need to be resolved now, or can some wait until the more urgent ones are dealt with? Do you need a printer in each room, and when it breaks do you need to buy a new one or could you make do with sharing one machine with another room? These and many other questions will lead to more efficient choices, but only after having identified and assessed the cost and value of each aspect of IT, including people and assets.

Solution 4: Cloud computing

There are contrasting opinions on this matter. The Government CIO, John Suffolk encourages the use of this service, and reckons that the public sector would be able to save £1.2bn by 2014 thanks to this solution. However, many believe that placing data in the hands of a service provider can be risky due to the highly sensitive nature of the data involved, so traditional Cloud computing may not be an ideal solution.

A shared environment such as the G-cloud, where various public sector organisation share private data centres or servers, may be a safer option that allows the public sector to achieve major efficiencies and cost savings, while minimising issues related to data security.

Solution 5: Shared Services

A shared service desk is not for everyone – it can only work if the organisations sharing have similar needs, culture and characteristics, and as IT can be a strategic advantage for competitive businesses, sharing the quality may mean losing this advantage. But for the public sector, this solution may be ideal. Local councils with the same functions, services and needs will be able to afford a higher level of service for a reasonable price, sharing the cost and the quality.

Solution 6: Service Management Good Practice

‘Doing more with less’ is one of the most used quotes since the recession started. And it is exactly what the public sector is looking for. Public organisations don’t want to be ITIL-aligned, obtain certifications, and tick the boxes. All they want is efficiency and cost savings – and through the right Service Management moves, after an Efficiency Review to find out what needs improvement and how, this can be obtained through the right choices regarding people, processes and technology.

Solution 7: Managed Services

A solution where the IT Service Desk is kept internal with its assets owned by the company, but managed by a service provider is becoming more and more popular among organisations from all sectors. When the sensitivity of data and a desire for a certain level of control over IT rules out full outsourcing, but in-house management does not allow to reach potential cost savings and efficiencies, a managed service may represent the ideal ‘in-between’ choice. The post-Spending Review public sector, then, may benefit from a flexible solution that is safer than outsourcing, but more cost-effective than an in-house solution.

Every challenge can be a new opportunity

Although budget reduction may affect investment in large IT projects and shiny new technology, it also represents the ideal opportunity to analyse what is essential and what is not, and to prioritise projects based on this. The public sector, then, find itself prioritising for effectiveness over compliance, cost-efficiency over cheapness and experience over offers, when choosing providers and tools for their IT. This will lead to the choice of solutions that will help organisations run more smoothly and safely, invest their resources better and, ultimately, deliver a service that will bring maximum customer and user satisfaction.

Martin Hill, Head of Support Operations

(also on Business Computing World: http://www.businesscomputingworld.co.uk/how-to-create-cost-efficiencies-in-the-post-spending-review-scenario/)

The peculiarities of Metro Bank’s IT outsourcing model

October 20, 2010

Recently-launched Metro Bank has made headlines these last few months for more than one reason: it is the first high-street bank to launch in over 100 years; it follows a retail store model, offering longer opening hours and no weekly closing day; and virtually all of their IT is outsourced to a Managed Services provider.

The news of a bank outsourcing its IT does not come as a complete surprise, as many banks outsource certain functions such as software development, IT Support etc. There are elements of novelty in this choice, though – for instance the fact everything but security and the local networks and terminal devices is being outsourced, which puts a lot of technology in the hands of the provider. It is also unusual that they have chosen a new provider, niu Solutions, which is a merger of four different IT and telecom providers and has little track record as a unified company. And finally, what is most interesting about Metro Bank’s set-up is that they are using a new ‘pay-as-you-grow’ Managed Service model that is highly-virtualised, flexible and scalable – something only a start-up is likely to have considered.

Some publications reported that the bank is using cloud computing, but they are probably mistaking the somewhat flimsy term with plain virtualisation. This is not a shared service – the bank has paid upfront for the hardware and has employed the provider to manage their systems, which run remotely from two data centres in the UK.   While it’s likely that the provider will be looking to add customers to the model, there’s little doubt that Metro will insist upon a high degree of separation of “their” equipment in the provider’s datacentre to help minimise security risks.

With any financial firm, but particularly a retail bank, information security is an overriding concern.  As well as the detailed personal and financial records they hold for their customers, there is also concern about who has access to the various financial systems that are used for recording and executing financial transactions.

Locating kit at a provider’s premises introduces a transfer of control issue, but Metro bank will mitigate that by ensuring data at rest is encrypted, and that the right security standards are enforced at the provider’s datacentres.

Clearly it is in the provider’s interest to supply a good and secure service to retain their clients and their reputation, and the advantage of dealing with a supplier is that roles and responsibilities should be clearly defined and contracted.  This is in contrast to relying on internal staff – the assumption might be that this improves security, but it also introduces the risk that there is less formality and, consequently, fewer proper control measures.

The biggest concern in a modern bank is logical security, rather than physical. Access to accounts and key financial systems will be highly restricted and audited. Since operational security at Metro Bank is retained in-house, the risks of a provider’s rogue employee having the level of access necessary to steal data or using the system for criminal purposes is relatively low.

A concern in any outsourcing arrangement is the financial stability of your chosen partner.  Such concerns would be particularly acute for Metro Bank as there would be serious repercussions if, for example, a company failure meant it couldn’t get access to its systems.  Clearly Metro will have done its homework on its chosen provider and insisted on various safeguards and insurances.

The new ‘pay-as-you-grow’ model appears to be convenient especially because of its scalability potentials – after an upfront payment for hardware, the bank pays a cost per user and increases its spend as the client and user base grows. With any new venture, it can be difficult to predict what the level of growth will be, and by adopting this model Metro will only pay for the growth as it’s achieved – rather than needing to make significant upfront investments to ensure growth isn’t hindered. Also, by leaving IT to the experts the bank is able to concentrate on customers and operations without having to worry about IT availability and support, sure of getting a high quality service thanks to SLAs.

This model is certainly interesting, but needs to show it can work in order to gain more trust among both banks and bank customers, and therefore be embraced by a larger number of companies. Retail banking is a better candidate for the model than, say, Investment Banking where the breadth of systems typically used and high-speed real-time requirements for data delivery might deter the organisation from being so bold. Nevertheless, this innovation can create many benefits from a business point of view: if this model manages to work over time, it could create many more opportunities for service providers to enlarge their range of work, and for banks to embrace cost-efficiencies that will enhance their competitive value and, ultimately, their potential for success.

Adrian Polley, CEO

Sharing the IT Service Desk: sharing cost, sharing quality

May 4, 2010

The importance of IT, just like that of public transport, seems only to be truly appreciated when it stops working properly and stranded users are left to reflect on the value of a more efficient system. The IT quality issue can become particularly important when inefficiencies and disruptions not only slow down the system and create delays, but get in the way of business operations or, even worse, cause losses. As many organisations might have unfortunately already experienced, an extra minute of downtime might lead to money loss, system malfunction can cause loss of data and lack of proper data protection measures can bring information security breaches, causing not only costly fines, but damage to the organisation’s reputation that might not be repairable.

The problem is that high-quality IT support is not always seen as affordable, especially when an organisation needs a bespoke, hyper-efficient, extremely secure service that can understand and meet the needs typical of their particular industry. In reality, however, there are ways to access an excellent service at a cost well within that of most IT budgets. Sharing an IT Service Desk with other organisations within your sector is an easy way to gain access to high levels of IT skills and expertise which are at the same time tailored to your organisation. Staff working for two or more organisations with similar needs, structure and business culture can acquire deeper knowledge of the environment, and the organisations taking part in the share can benefit from shared experience, avoiding the dangers incurred by others.

There are obvious concerns regarding this solution. Organisations might think their data and intellectual property are not secure or that sharing with someone that might well be a competitor could damage them or negate any competitive advantage their IT might bring. Furthermore they could argue that sharing support personnel might mean that there will be less attention towards their business or worse, that resources will be stretched thin due to dealing with the increase in incidents.

In fact the structure of a shared service desk should, if managed by the right provider, guarantee an improvement in service levels when compared to an in-house desk. Service Level Agreements and Key Performance Indicators will ensure the provider is always hitting the levels your organisation requires while having access to a central pool of staff trained to follow best practices and experienced in your specific industry can only improve performance. Take into account the fact that the shared aspect of the service means all of this will be delivered for a reduced cost, and the benefits in terms of efficiency also become apparent.

Despite its obvious benefits, a shared service is not for every organisation. The primary benefits are seen when the sharers are similar organisations and as such there are valid concerns when it comes to how a shared service might compromise any advantage IT might bring over competitors. Due to this there are industries and business sectors where a shared service may not be appropriate – retail or banking for example – but for organisations in the public sector or industries where collaboration is commonplace, such as Law firms, the likelihood of competitive advantage being affected is slim.

Organisations which realise that the kind of service they need to provide might be out of reach when the cost is shouldered alone are likely to turn to this innovative solution more and more in the future, identifying it as a valid alternative to full-scale outsourcing or off-shoring, where the cost advantage is often to the detriment of performance levels. While clearly not applicable to every organisation, as a model, shared services can be used as a route to bypass the dangers typical of services that achieve cost-reductions by cutting down on quality.

 

 

Pete Canavan, Head of Support Services

This article is featured on Director of Finance: http://www.dofonline.co.uk/management/cutting-costs-on-it-service-support-051004.html

So, Microsoft outsources IT support – What’s all the fuss about?

April 28, 2010

When a press release was issued a couple of weeks ago announcing that Microsoft’s IT help desk, desk-side services, and infrastructure and application support were to be managed on-premise by Infosys for its branches across the globe, it caused a lot of controversy in the media.

Outsourcing frequently provokes strong opinions, and whilst it is often accepted that outsourcing catering or cleaning is a sensible move, outsourcing IT is often seen in a different light. There can be a supposition that the company in question has somehow lost control of what it is doing and is embarking on outsourcing as a “last resort” to help clean up the mess.

These beliefs appear to be driving much of the Microsoft criticism. People have been criticising Microsoft products for years that they are difficult to manage, so if the company that produces them can’t even manage them, what chance for the rest of us?

However, this thinking stands on shaky ground. First of all, the company has always endorsed outsourcing so it is not surprising that they are now embracing what they described as a consolidation strategy, choosing only one provider to deliver all services.

Secondly, there seems to be a lot of prejudice about organisations in the IT field, where it is thought that software producers, hardware vendors and services providers are all the same, which is obviously far from true.

It should go without saying that as Microsoft is a software company, it is not implied that it can also be an expert in infrastructure support and management. Just like organisations in many other fields, the giant turned to a managed support provider to help with improving its system while achieving its main aim, cost-cutting. It is recognised that delegating the management of support services to experts can enhance IT efficiency and overall improve the whole business operations, minimising disruptions, inefficiencies and time and money loss.

The controversy, if there was one, would be that they have chosen an Indian provider to deliver the service rather than one based in the US, given all the fuss about off-shoring stealing work from the country. But the company was probably faced with little choice: the provider has to deal with 450 locations across more than 100 countries, including issues such as managing different languages, cultures and laws. Only an offshore global giant could probably do the job for Microsoft whilst still keeping the offer affordable.

The focal point of the discussion, anyway, should not be the provider, but the service. It is remarkable that an important company such as Microsoft recognises the value of managed services, choosing this option over full outsourcing. As they and a growing number of organisations of all sizes might have understood, this solution proves ideal when the need to delegate management of IT functions is accompanied by the desire to retain a certain level of power and control over operations, to retain intellectual property, and ultimately for enhanced security.

Staying up to date with the latest techniques, solutions and best practice is something that internal IT departments can struggle to achieve, but is generally easier for a service provider working across multiple clients. This strategic move shows us Microsoft doing what it frequently does – not accepting the status quo but frequently looking for “the better way”. Whether it has made the right decision is obviously to be proven, but it is the organisations that never change that are most prone to obsolescence.

 

 

Adrian Polley, CEO

Find an edited version in the Comment section of CRN: http://www.channelweb.co.uk/crn/comment/2262088/microsoft-outsources-support

A new lease of IT life

February 11, 2010

The latest Gartner predictions state that by 2012, 20% of businesses will own no IT assets. Is IT following the paths of cars and mobile phones and will we end up leasing it?

It is actually not difficult to imagine. The growth of utility computing means organisations are already purchasing software and storage on demand, leaving its management to a third party. They don’t only do it because it is convenient economically speaking, but for a more important reason – it spares them from the responsibility of managing something that is not the main function of their business. As the trend grows, technologies are given the right incentive and resources to mature and develop even more, and this is already starting to affect other markets: with the evolution of new technologies happening with increasing regularity the need to update or replace hardware and software becomes more business critical and this of course comes with a heavy financial burden. So it is not too far-fetched to imagine that in the future all hardware and software will be at some point leased and not owned, in order to make constant updates and replacements less expensive in the long run, at least for businesses.

It is not unusual for this to happen with high-evolution technology. In their first twenty years, mobile phones only changed in shape and size, but all models did the same thing: make and receive phone calls. At some point the SMS function was added but could often be activated on older machines, so one could have had the same mobile phone for a decade without being too ‘obsolete’. Then suddenly everything started to change at high speed: some mobiles had a camera, some had polyphonic ringtones, some had both, and when you bought the one which had both, another mobile would come out on the market with ‘real tones’, a much higher resolution camera and the new MMS function, and as soon as you become accustomed to this, there came the new ones with video function and internet browsing and so on. Leasing mobile phones, then, seemed really sensible for a company, to be free to upgrade to the new technology with ease and without having to purchase each phone at full price. Maintenance and substitution are easy when management is in the hands of the provider – you only pay monthly fees to have all the services you need.

The same happens with cars – a company surely wouldn’t use the same car for ten years, and wouldn’t want to spend an awful amount of money every couple of years to buy a new model and perhaps go through the struggle of selling the old one, not to mention repair, revision and all the rest. So it sounds reasonable to pay for a service that provides you with perfectly-working cars, substitute them as soon as they start being faulty, and cares for maintenance issues.

Gartner analysts are probably right in their prediction, then. Just like mobile phones and cars, many organisations will see ownership of their hardware as ‘nonstrategic’, as they define it, but it is important to note that this is actually nothing new: in the past, there have been attempts to rent IT equipment which in the end proved unsuccessful. It is difficult to know if the new technologies will change that fate, however what is obvious is that with organisation switching their IT spending toward operational rather than capital expenditure, it seems they are happy to delegate the responsibility of managing IT assets and services to the experts, in order to increase ROI and efficiency and, nonetheless, to be free to focus on the important parts of their business – making it as successful as it can be.

Richard Forkan

 

Richard Forkan, Director of Business Development

A shorter version can be found in the comment section of CRN – Channelweb:  http://www.channelweb.co.uk/crn/comment/2257649/lease-life