Do You Know Where Your Infrastructure Is Managed?

It’s what Adam Strichman, senior partner of Nautilus Advisors, calls “silent offshoring”—the inconspicuous movement offshore of more and more infrastructure management tasks associated with existing long-term outsourcing deals. U.S.-based IT services providers have built up their remote support capabilities around the globe and are eager to make use of them to serve domestic customers.

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“Most vendors have moved a myriad of operational functions to the far corners of the globe, often with minimal fanfare, if any,” says Strichman. It’s a whole new world of dispersed infrastructure services delivery. The data center may be in Tampa, but the vendor’s staff may manage midrange business out of Brazil, mainframe operations from India and desktop imaging in the Czech Republic, says Peter Iannone, head of the IT practice for outsourcing consultancy EquaTerra.

The provider may save 25 percent to 45 percent on the cost of service delivery, only some of which may be passed on to the client, according to Strichman. That’s not necessarily a bad thing: In some cases, time zone differences can provide increased capabilities for off-hours support. And the deal’s pricing may have been predicated on the offshore delivery of services. But if your contract doesn’t spell out geographic restrictions (and most older contracts probably don’t), the vendor won’t necessarily tell you when it moves your network management to Chennai, and you won’t be able to weigh the risks and benefits of such a move. In addition, the offshoring of certain work can have larger implications. For example, most infrastructure outsourcing deals allow the client to hire vendor personnel when the contract ends. If those personnel are offshore, it may be harder to end the vendor relationship, says Strichman.

If you want to be involved in the vendor’s decision to perform work abroad and have the right to veto which services move offshore and where, you should immediately negotiate an approval process for doing so, advises Strichman.