Industry news

Taking a multi-vendor approach to IT solutions is a double-edged sword. True, it can drive down the cost of operations, but with this comes a host of complex management issues. The cost benefits of sourcing multiple suppliers can easily be accounted for, but IT managers may find it difficult to account for the time and resources lost due to inefficient use of management tools.

The growing use of services provisioned from cloud providers is driving the need to constantly adapt and enhance the way IT is managed, and increasing the need to focus on what is a challenge facing more and more businesses. That is, that operators of datacentre environments, both dedicated and cloud, and those of data networks often utilise a large variety of non-connecting management tools across the services provided.

The net result of this is an inconsistent and disjointed view of service operations, leading to sub-optimal application delivery and challenges in management and the speedy diagnosis and resolution of incidents. Perhaps the biggest problem, however, is that multiple disparate tools hamper the use of end-to-end automation which might be considered the silver bullet to the optimisation of an IT operation, offering as it does have the ability to reduce the cost, error and inconsistency associated with manual activities.

One might argue that the current trend to move away from monolithic outsourcing arrangements across network and datacentre operations would exacerbate this situation – adding more suppliers to the mix. In reality though, even those providers offering services across multiple domains are rarely using consistent tools and practices across them. Fundamentally, whether sourced together or separately, the network and datacentre layers are an intrinsic and inter-reliant part of IT service delivery.

By using consistent operational support (OSS) and business support (BSS) processes and tools organisations can provide a true service related view. Forward thinking organisations are considering this to be an important part of the service governance role which is increasingly becoming the function of the IT department of the future.

Service delivery is a largely overlooked issue in many businesses. Organisations can’t afford to have their productivity levels decline, especially when there are solutions available which easily prevent this occurring. It’s a fact that greater efficiencies can be leveraged through the use of managed service providers whose use of shared assets and knowledge will be of benefit to their customers. Businesses should look to those who use automation and shared services to deliver the greatest efficiencies, while focusing on the use of end to end management tools across all facets of in-sourced and out-sourced services to consistently govern the delivery of functionality to the business.

The recent trend for localised outsourcing includes hiring local employees which eliminate language barriers and cultural difference.

You don’t have to go to the big city to find a bargain, a better product, better service and overall cheaper package can sometimes be found on your doorstep, localised outsourcing can provide all of these advantages and is coming to be seen as an increasingly attractive option.

With businesses facing rising costs with uncertain global economic stability, localised outsourcing has become a new cost saving measure that is seeing increased up-take. The UK government has moved to publicise and invest in SMEs, with the promotion of SMEs as suppliers being a key part of the government’s strategy, in seeking to move the economy out from recession.

Many popular offshore outsourcing destinations are becoming increasingly expensive, even outsourcing within the same country can present logistical difficulties. Local outsourcing can present efficiencies and levels of accessibility that even in a digital are simply not available elsewhere.

Often multi-national or global companies will seek to seek efficiencies and employ local services around different sites. A hybrid approach is becoming increasingly popular, with big business adopting the advantages of both local and distant outsourcing.

Adrian Guttridge, Head of Business Process Outsourcing, EMEA, HP Enterprise Services, said “When it comes to locaslised outsourcing, HP certainly takes the middle road and implements the hybrid model of onshoring v offshoring.” Guttridge detailed that: “Individual customers may have specific reasons for wishing to keep certain services onshore – such as data-protection and security – but it is more than likely that for other services, location choices will depend largely on the vendor’s judgment that conditions are suitable.”

Localised outsourcing can sometimes be difficult to employ effectively. Popular areas for outsourced overseas services can often include countries with developing economies. Political pressures and conflicts can be a risk of localised outsourcing. “Social and political unrest, particularly in many developing markets, has demonstrated the geopolitical risk of locating business services abroad.” said Guttridge.

Global business can employ localised services around sites in multiple geographic locations. While this can allow for increased efficiency, lowering procurement costs, and taking advantage of local resources, such as; educated workforce, low cost labour and rapid transport times, the employment of localised services can give rise to cultural differences. These can sometimes be an obstacle if not effectively planned for. The director at Charterhouse, David Fincham, said: "Fundamental dissimilarities in culture that exist from one nation to another. These differences can have a significant bearing on how procurement does business and builds relationships with suppliers."

David Fincham, identified that: "Centralised procurement can arguably lead to a more consistent and compelling message while leveraging economies of scale, however, these benefits hinge on the relationship between central decision-makers and local markets."

Difficulties regarding cultural differences can be avoided through forward planning and an understanding of cultural backgrounds. Having a project manager or workers within the team who have a link to the cultural environment in proximity to an outsourcing project can help to ease transition and create strong links, which in turn increases the efficiency of localised outsourcing.

"Some multinationals’ quest for a smooth, singular global model is inadvertently creating kinks in their own supply chain. Yet, it doesn’t have to be this way. If only local managers were involved and engaged from the beginning, global category managers would find that they could avoid weeks of ineffectual negotiations with their colleagues and agency suppliers," said Fincham.

Global business can employ localised services around sites in multiple geographic locations. While this can allow for increased efficiency, lowering procurement costs, and taking advantage of local resources, such as; educated workforce, low cost labour and rapid transport times, the employment of localised services can give rise to cultural differences. These can sometimes be an obstacle if not effectively planned for. The director at Charterhouse, David Fincham, said: "Fundamental dissimilarities in culture that exist from one nation to another. These differences can have a significant bearing on how procurement does business and builds relationships with suppliers."

Adrian Guttridge described how HP had faced difficulties in using localised businesses, due to the complexity of the UK government procurement process, which can be highly complex to up and coming organisations. The very nature of the government procurement service, shows recognition of the value of localised services and outsourcing opportunities to UK investment.

Big businesses such as HP have moved to take advantage of localised outsourcing within the UK, with Adrian Guttridge detailing how: “HP are set on adding a further 150 SMEs to its supply chain and increasing spend with them by 50 percent by the end of next year. It is also appointing an SME Champion who will bring even closer alignment between the goals of HP and the needs of that local community, a task which spans providing better advice and support, improving our procurement process”.

Localised outsourcing can present difficulties and has clear limitations, however the employment of a hybrid model allows businesses to take full advantage of the efficiencies on offer. The benefits of localised outsourcing to businesses are being recognised by governments, with the UK government moving to enhance the procurement process. With planning, users can avoid potential risk and gain the likes of cost savings, overall efficiency, detailed oversight, with the rapid delivery of services.

General Motors is looking to insource IT services by hiring 10,000 IT workers worldwide over the next five years.

The car manufacturer is looking to end its use of outsourcers, which it had previously used to run its global IT infrastructure.

GM CIO, Randy Mott, commented: “We plan to rebalance the employment model over the next three years so that the majority of our IT work is done by GM employees focused on extending new capabilities that further enable our business”.

Swiss based management consulting firm Lodestone, has been purchased for $349 million by Infosys. The move will increase Infosys’ workforce, adding 750 consultants to its rosters.

The move comes as the Indian based software company seeks to expand into other markets including consulting.

The acquisition will also help to increase the company’s customer base, adding 200 consulting customers to the company.

Ryanair’s bid to buy a 24.9 percent stake of Stansted airport could be stopped by the European Competition Commission.

The Competition Commission had indicated in an earlier investigation over BAA’s market dominance, that airlines should only be allowed to hold a tiny percentage of any airport that was later sold.

A challenge from the European Competition Commission would be the second time that the airline has been investigated, with a probe initiated after Ryanair’s bid for Aer Lingus.

BT will save Surrey County Council £750,000 on a yearly basis as it consolidates the council’s public services onto one network.

Up to 40 LAN and WAN networks currently employed by council departments will be replaced with one PSN network.

The seven year contract, according to Denise Le Gal, the cabinet member for change and efficiency at Surrey County Council will, “save the county council alone up to £5.25m over the seven-year contract.”

The Northern Grid for learning has suffered from severe broadband service disruption.

Issues became apparent over the last few days as children returned to schools, BT had took on a £8.3 million contract in July to provide broadband services to the non-for-profit group.

The cause of the disruption has yet to be identified with BT having individually checked both the core network and individual networks, with no faults found.

A statement released by Northern Grid said that: “Despite these tests and intense scrutiny, we know that the experience of internet browsing for most schools has been poor, although a number of sites reported improvements from early afternoon”.

Chinese computer giant has bought Brazilian based CCE in stock and cash worth $148 million.

The acquisition will allow Lenovo to expand into Brazil which represents a developing digital marketplace.

Lenovo CEO Yuanqing Yang, said that the move will more than double the companies PC market share in Brazil: “CCE's management, who will become an essential part of our Brazilian operations, know the Brazilian consumer and will immediately help us establish a strong retail presence."

A survey of a 100 heads of IT and UK businesses including global leaders has found that only 5 percent of respondents regarded Google as a credible enterprise market supplier.

David Roberts, executive director of The Corporate IT Forum which carried out the survey, said: “If Google is to make serious headway in the corporate market, it will need to change its approach".

Roberts continued by saying that: "The Forum’s research highlights speed, collaboration and development of new products as the key benefits of using Google's products and services. However, there are several issues, or perceived issues, holding back corporate users – mainly Google’s ‘missing features’ when compared with mainstream offerings such as Microsoft.”

China are set to invest a trillion yuan on a series of infrastructure projects in a bid to reinvigorate the economy.

The news has seen Asian stock markets soar as industries react to the investment.

Projects announced so far include transport systems, water treatment plants and waterways. The main Chinese share index reacted to the news with a rise of 3.7 percent.