Eric GoodnessIn my coverage of remote infrastructure management (RIM) services, I’m often asked by user organizations about the advantages of leveraging offshore vendors. My usual response is ‘it doesn’t matter’. I’m actually seeing more and more offshore-only RIM strategies by our clients. It is a flawed approach.
RIM-based service agreements are growing rapidly as a replacement for traditionally inflexible and unwieldy outsourcing agreements. The current drive, and attention, to enlist offshore companies has become a reflexive and lazy approach to vendor selection.
My mantra when advising clients looking at RIM vendors is “It’s all about the Systems”. Early in my pursuit to characterize RIM services I focused on Service Level Agreements (SLA) claiming that the underlying management system didn’t matter as long as the vendor met expectations for service delivery. I called the users’ systems reviews ‘tool belt wars’ as these conversation were invariably ‘rat hole’ discussions between influencers on the IT staff debating and the RIM vendor regarding the effectiveness of one major BSM platform over another.
I was dead wrong.
RIM services are all about automated, or ‘autonomic’, management of IT (and business) processes. Users are much better served by focusing more heavily on the vendors’ RIM services strategy to provide advanced IT and business process management and the vendor’s research and development investments directed to their current systems and to fulfill their service strategy.
Now that doesn’t mean service attributes such as SLAs, processes and methodologies, IT expertise and helpdesks are unimportant. They clearly are integral to providing excellent service levels. However, each of those service attributes reflects traditional, reactive support approaches which have long histories of review processes. RIM services are all about proactive, self-remediation capabilities which are quite new to many IT managers in terms of due diligence. An over reliance by vendors on non-automated service capabilities can mean diminishing margins for them which always translates into diminishing service levels for customers. A non-automated RIM system also reduces the level of service efficiency. For example, a lack of automation affects the number of events a vendor system can ‘cure’ before an outage occurs or how effectively a system can predict conflicts in a customer environment brought about by software upgrades, updates, patches or fixes.
To date, traditional offshore providers continue to rely more heavily on labor arbitrage; simply the replacement of personnel in a customer’s IT operations center while using the customer management system. The offshore vendors’ heavy reliance on an FTE-driven model has actually slowed the required investment in better, more proactive systems for RIM services while onshore providers of RIM services, which are not able to offer cost reduction through labor arbitrage, have invested a higher percentage of revenue in their management systems to provide services automation.
My advice to customers when taking the first step to perform their due diligence on RIM vendors is to make the bid list ‘shore less’. There are good providers in all geographies. Carefully examine the vendor’s proactive RIM service capabilities in conjunction with their SLAs, structured processes and methodologies and other operations services.
Services strategy and R&D will be powerful lenses through which you view your RIM providers and how the vendor can help your business do business.
Category: Infrastructure Tags: business service management, managed services, offshore IT services, onshore IT services, remote infrastructure management, Remote Infrastructure Management (RIM) provider
4 responses so far ↓
1 Ashutosh October 13, 2008 at 9:59 am
Your post is bang on.
With a pure labor arbitrage considerations, there is little value the service provider brings in. It then is really “your mess for less”.
However there are offshore based vendors who have made these investments and are maturing fast as compared to the onshore based providers who have been around for a longer time.
2 Peter Sandiford January 18, 2009 at 11:51 am
I agree and will suggest a slightly different way to look at this. The RIM platform needs to provide as much diagnostic and automation capability as possible. Where labor is geographically or organizationally located should be a completely different decision based on required skills and costs to deliver the service management goals. As a RIM software developer we have focused on creating extensive collaborative services tools including point and click roles and permissions, multiple web views of asset, health and performance information and web servies integration and synchronization of multiple help desk tools. Remote NOCs, specialized service organizations and internal iT can slice and dice the load to maximize effciency and flexibility.
3 RimGuy February 17, 2009 at 6:31 am
Shore based savings are a thing of the past for many of the large enterprises. Mid sized firms looking to offshore or outsource in the current market are able to leverage a combination model of shore and process to achieve betters savings than their larger couterparts
Its true that the Onsite providers had the first mover advantage in R&D, but the smaller and offshore providers adapted and mashed up many open source community alternatives to catch up without too much investment.
There is no doubt that the Next generation productivity for customer and provider will be from Process Excellence, Demand deflation through self service and Innovative Autonomics.
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