Outsourcing: The Pros and Cons of Offshore Remote Infrastructure Management
Remote infrastructure management outsourcing—the hot buzzword for offshoring IT operations work—is big business for India's IT services providers and a competitive imperative for U.S.-based outsourcers. But it may not be right for you.
JM Family Enterprises handles 70 percent of its business transactions on its mainframes. The $11 billion, privately held automotive services company recently renewed its infrastructure outsourcing deal with mainframe mainstay IBM. But JM Family specified in the contract that the infrastructure support stay onshore. IBM was surprised by the request, says Shawn Berg, JM Family's vice president of technology operations, but ultimately acquiesced. "IBM clearly wanted the option," adds JM Family CIO Ken Yerves. "It's a five-year contract and I'm sure over that period they'd like to make sure they could leverage that cost option."
Berg says his company wanted to have influence over who works on its account. So JM Family negotiated final say on which IBM employees support its system. Berg admits that perhaps it shouldn't matter whether support personnel are in Houston or Hyderabad, India, but it does. "We have a lot of custom code, so our support model is challenging even when the resources are in the state," says Berg. "Adding another layer of complexity with the time zone and everything else doesn't make sense." The deal makes it easier to ensure IBM employees are adequately trained and turnover is a less pronounced issue.
Desktop management is least likely to be offshored for a simple reason: Sometimes an unresponsive computer needs physical resuscitation.
But that could be changing. "Tools to do more remote takeover of PCs are a lot more mature than they used to be," says Peter Iannone, head of the IT practice for outsourcing consultancy EquaTerra.
One example: Intel's new enterprise platform, vPro. The manufacturer says vPro enables hardware to respond to management commands even when the PC is locked up or powered off. -S.O.
JM Family has contracted with both Cybage and Keane to perform application development work offshore for over a year now. But "on the application side, its easier to throw things over the wall," says Berg. In running the business day to day, "if something happens on my box, I need support on the fly." He doesn't want to wait for someone new "to ramp up." In the past, he adds, "the knowledge of JM Family was lost when someone who was working on the account left." (See "Remote Desktop Management: The Final Frontier," above, for reasons why desktop management isn't often outsourced.)
Meanwhile, some CIOs may be constrained by the compliance requirements of government regulations or industry standards. Venky Rangachari, vice president of information technology for StarCite, which provides on-demand meeting management tools, has his infrastructure managed from Shanghai. But it's handled by the company's own employees in China, as well as in the U.S. Rangachari not only wants to make sure that infrastructure administrators understand StarCite's business, he also needs to ensure they handle customer data in a way that complies with Payment Card Industry (PCI) security standards. StarCite has many Fortune 500 customers in the financial services industry. "Access to customer data, financial information and security is critical," Rangachari says. "A lot of companies that do infrastructure support may not be PCI compliant."
