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10 Things to Know About ITO

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  • 1. 10 Things To Know About ITO: Determining If IT Operations Outsourcing is Right For You By Mark Perlstein Vice President and General Manager CIBER IT Operations Abstract: In today’s market, fast, efficient and strategic deployment of information technology operations (ITO) activities are critical to success in any industry. ITO activities are rarely, if ever, considered mission-critical, but their effective deployment can provide numerous competitive benefits. Unfortunately, if you’re like most companies, you recognize ITO’s importance, but IT isn’t your specialty. So what do you do? This white paper offers 10 important things to know about IT operations outsourcing to help you understand the relevance of ITO outsourcing, determine if ITO outsourcing is right for your organization, evaluate outsourcing partners, and be aware of important factors that influence the success or failure of ITO outsourcing engagements.
  • 2. 10 Things to Know About ITO In today’s market, fast, efficient and strategic deployment of information technology operations (ITO) activities are critical to success in any industry. ITO activities include data centers, infrastructure management, help desk operations, network administration, ERP hosting and database services, and disaster recovery. These are often the non-glamorous, “behind the scenes” activities that every organization must confront and deliver to provide effective services to end-users. And while ITO activities are rarely, if ever, considered mission-critical, their effective deployment can provide faster time-to-market and time-to-value, contribute to competitive advantage, and ensure compliance with ever-changing government regulations. If you’re like most companies, you recognize ITO’s importance, but IT isn’t your specialty.
  • 3. CIBER, Inc. So what do you do?
  • 4. 10 Things to Know About ITO You either manage ITO activities internally—a significant decision to manage, invest in, and deal with the complexities of a non-core activity—or you outsource your IT operations. Choosing whether or not to outsource IT operations • Greater regulatory compliance can be a difficult decision. If you decide to pursue • Accelerated IT development outsourcing, you must then make another difficult decision – choosing a partner. • Reallocated internal resources • Improved company focus Plenty of companies provide IT outsourcing services, • Availability of technical skill sets not possessed but what sets one provider apart from another? What in-house should you look for? What should you be aware of? In the past, the biggest users of ITO outsourcing (also This white paper offers important things to know about called managed services) were firms in the financial IT operations (ITO) outsourcing, to help you: services, manufacturing, and services industries. • Understand the relevance of ITO outsourcing • Determine if ITO outsourcing is right for your Today, firms in numerous other industries are also organization embracing the use of ITO managed services. Government entities (including international, • Evaluate outsourcing partners federal, state, and local entities), utilities, and retail • Be aware of important factors that influence ITO organizations are realizing the business benefits ITO outsourcing engagements managed services can provide. #1: Know the Benefits of Outsourcing In fact, industry research firm Gartner, Inc. states that the movement to outsourced services continues Organizations in all types of industries have realized to grow, with the greatest annual growth—7.4%— the many benefits and significant value of IT operations occurring in operations outsourcing, and approaching outsourcing, such as the following: revenues of $232 billion. Most of those services will be purchased as part of an on-going engagement rather • Stabilized or reduced IT infrastructure costs than as a one-time outsourcing project.1 • Improved customer service ... ITO outsourcing may not be right for everyone, but it provides potential benefits that are worth evaluating: reduced IT infrastructure costs, improved customer service, and access to technical skill sets not available in-house. 1 “Key Issues for Outsourcing, Infrastructure and Applications, 2007,” Gartner, Inc., Allie Young, 21 March 2007, G00146993
  • 5. CIBER, Inc. #2: Know What ITO Outsourcing Data Centers Includes and Excludes There are two significant issues to be aware of regarding data centers: power and cooling, and compliance and IT operations outsourcing can offer many benefits, but it’s audits. important to understand what activities ITO outsourcing encompasses to know if it is truly relevant to your Power and Cooling Requirements: It used to be organization. that the major cost of the data center was space. The pricing models of data center providers and the What, exactly, is ITO? investment strategies of businesses were based mostly ITO includes numerous activities: data center operations, on the amount of space utilized by the systems in the network operations centers, tier 1 help desk services, data center. In most cases, the unit of space sold was infrastructure management, database administration measured in “racks.” services, application operations, email and messaging management, and information technology infrastructure Today, the concepts of buying data center space and library (ITIL) processes. Some, or maybe all, of these using the number of racks as the main measure of cost activities are relevant to your organization. Understanding still apply to some degree, but in recent years, server the more critical nuances of these activities will help you virtualization and miniaturization have dramatically decide if ITO outsourcing is right for your organization. lessened demands for space. While this is good, virtualization and miniaturization have created another Figure 1 depicts what CIBER calls the “ITO stack.” issue: demand for power and cooling. These are the activities, or building blocks, that are the foundation for all that is encompassed by the term “IT It is not unusual today to see a large percentage of operations.” Each of the foundational elements in Figure the space under-utilized, and yet the data center is 1 is described below. considered full. The reason is simple: the systems use Application Patches Updates Users Enhance Security Administration Analyze • Apply • Monitor • Maintain • Troubleshoot Database Email Messaging Disaster Recovery Storage Management Administration Systems Hardware O/S Network Storage Security Administration Monitor • Maintain • Troubleshoot • Plan • Optimize Operations Backup Schedule Interfaces Notify Document Management Monitor • Maintain • Troubleshoot • Plan • Optimize ITIL Tools Network Data Center Tier 1 Operations • Incident Facilities Help Desk Center • Change • Configuration Figure 1: The ITO “Stack”
  • 6. 6 10 Things to Know About ITO more power on a per-rack basis than what was assumed Find out if your provider offers an integrated toolset that when the data center was constructed. Space sits idle correlates information across these areas. and unusable because the data center is already utilizing its maximum conditioned power. This phenomenon is Tier 1 Help Desk and Desk-Side Services not only an issue for outsourced data center providers, The help desk, sometimes called “the service desk,” has but for businesses worldwide that run their own data become the centralized repository of all tickets within an centers. environment. The need for help desks to do more than simply handle Level 1 calls has become commonplace. The power problem generates another problem: No longer should the job of the help desk be to simply dissipation of heat. We’re not only cramming more take a call, log a ticket, and forward it on to a solver processing power into smaller spaces, but we’re also group. Today’s help desks should have some ability to generating more heat than ever before. Because the heat attempt to resolve the issue. If it cannot be solved by the is being generated by smaller systems that are densely first team, then organized processes and procedures populated into racks, the heat is harder to dissipate. should be followed to escalate that ticket as quickly as possible, and in line with the ticket’s severity level, to the It’s not all bad news, however. Manufacturers are group that can solve the end-user’s problem. working on chips that use less power and generate less heat. But for now, at least, don’t be surprised if the data The help desk is also the first place that a knowledge center providers you speak with are more concerned base is populated, generating a repository of information with the power usage of your systems than how much that, over time, can become a crucial asset for faster space they require. and better resolution of problems faced by end-users. Compliance and Audit Requirements: Another For many problems (though certainly not all problems) important issue facing ITO vendors is the requirement the next place for a ticket to land is in the desk-side for regulatory compliance and periodic audits of their support group. In this case a technician or engineer will data centers. Today’s data centers must undergo an often visit the end-user’s desk to solve a problem that SAS (Statement on Auditing Standards) 70 audit. The the help desk was unable to solve over the phone. Find SAS 70 comes in two flavors: Type I and Type II. The out how your ITO provider manages help desk services main difference is the level of certification of various and captures knowledge. claims that exist within the audit report on a data center or operations environment. Thus, you should expect IT Infrastructure Library (ITIL) Tools your data center provider to have undergone an SAS ITIL has become the standard process model guiding the 70 Type II audit. You should also be able to receive a organization of IT groups worldwide. ITIL is a dynamic copy of that SAS 70 audit, though some providers may expect you to sign a nondisclosure agreement (NDA) before they will release it to you. There are a myriad of other compliance and certification requirements for different industries, government agencies, and technology areas. Which ones are most important to you will depend on your industry, the kinds of systems you intend to outsource, and your tolerance for risk based on many factors. Network Operations Centers (NOC) Network operations centers include monitoring of networks (e.g., routers, switches, firewalls), applications (e.g., databases, job scheduling, ERP systems), and systems (e.g., operating systems, server hardware, backup servers). NOCs are often overlooked, but— when they operate efficiently—can provide proactive notifications and significant data for decision-support.
  • 7. CIBER, Inc. 7 model, and no one can say to what degree and exactly can efficiently deliver this partial resource from a pool of how it should be implemented in your environment. resources performing similar work across its client base. There are people, process, and technology (tools) issues This type of flexibility is usually impossible to achieve in involved in ITIL implementations and every organization an in-sourced IT organization. will and must approach it differently. However, it is generally agreed that by applying the principles within Compliance and Regulatory Issues: In today’s highly ITIL, your organization can realize efficiencies, reduce regulated world, there are more mandatory compliance costs, and pursue continuous improvement. Most and audit frameworks than ever, and regulatory pressure outsourcing providers are embracing ITIL for all of these is increasing: Sarbanes-Oxley, COBIT, COSO, SAS 70, reasons. If the outsourcing provider you’re speaking with ITIL, ISO17799, 21 CFR Part 11, ISO27001, HIPAA, is embarking upon an ITIL strategy, then many of those Basel II and others! It can be a daunting task for a CIO benefits may also flow to you. with limited resources and budget to educate staff, and then audit, remediate, and maintain compliance with any #3: Know What ITO Outsourcers Can one of these standards, let alone multiple standards. Provide That You Can’t Do Yourself In contrast, your outsourcing provider brings the skill sets and experience necessary to understand the Many organizations already manage their ITO activities. demands of meeting various compliance requirements. Can outsourcing really offer something you can’t do Generally, the outsourcer’s processes are designed to yourself? Yes! comply with these requirements, and the processes are audited regularly by many clients. This ensures that your Given your daily management of tight IT requirements, organization will reap the benefits of these processes schedules, and budgets, you may be unable to take without the resource commitments and expense of advantage of several things an ITO provider can offer, designing and implementing them on your own. such as: • Variable demand management Process: ITO providers have well-developed processes • Compliance and regulatory issues that conform to standards (such ITIL) for the most common tasks encountered in an IT environment. • Process discipline These processes are consistently delivered across the • Tools and systems ITO provider’s customer base, with custom work-level instructions on a client-by-client basis. Adopting these Variable Demand Management: One of the most defined processes is a simple way for your organization attractive benefits an ITO provider can offer is the to ensure that tasks are done in a consistent, standard ability to ramp resources up or down quickly to address fashion while still allowing the flexibility of customized special projects, seasonal demands, or new system task steps. implementations. Tools and Systems: Numerous tools and systems Outsourcers can also provide partial resources with are required to efficiently run an IT operation. Some a particular skill set. For example, you may only of these tools include enterprise systems and network need 25% of a full-time employee (FTE) to perform a monitoring, help desk/ticketing software, PBX, automatic particular network administration task. An ITO provider call distribution (ACD), FAQ/knowledge tools, service ... IT operations encompasses numerous activities. Knowing which activities are most applicable to your needs, and understanding the more critical issues for those activities, is an important part of evaluating ITO outsourcing.
  • 8. 10 Things to Know About ITO ... ITO outsourcers can offer services you may not be able to manage yourself: greater assurance of regulatory compliance, disciplined processes, additional skill sets, and advanced, integrated toolsets. level management, job scheduling and reporting. These Less labor is cheaper than cheap labor, so reducing tools can cost an organization hundreds of thousands to the number of FTEs required to deliver effectively is a millions of dollars to acquire, implement, and maintain. powerful tactic in reducing your overall IT costs. By Each system also has significant on-going software, improving processes and leveraging efficiencies, many hardware, infrastructure, training, and personnel costs. tasks can be performed by more junior, less expensive An effective ITO provider has already made multi-million staff members. In addition, outsourcers can provide both dollar investments in these systems and can leverage senior- and junior-level staff in various combinations its investment and relationships by delivering a “slice” of of less expensive on-shore, near-shore, or off-shore these systems for your organization’s use. regions to reduce overall staffing costs. #4: Know That You Really Can Save Best Practices Another way to achieve cost savings is for an outsourcer Money With ITO Outsourcing to perform the workload more efficiently than the current IT organization. Outsourcers can gain efficiencies by Traditionally, CIOs have strategic goals in mind when applying best-practices, eliminating redundancies, considering ITO outsourcing, such as enabling the implementing and enforcing IT processes, and business to focus on core competencies and freeing staff automating and consolidating workloads across a larger from tedious daily tasks. Cost reduction has historically labor pool. Using these strategies, an outsourcer can taken a back seat to more strategic goals. reduce costs by using less labor than your organization uses to perform the same tasks, thus reducing your However, today’s CIOs face more pressure to deliver actual labor costs (salary + benefits), as well as reducing more for less in their IT organizations. As a result, CIOs the associated hardware, software, on-going training, are turning to outsourcing as a means to contain or and space costs. reduce IT costs. Flexibility So, can you save money by outsourcing your IT Finally, a flexible outsourcing agreement with your provider operations? The answer is a resounding “Maybe!” contributes greatly to cost savings. The agreement must Why “maybe”? Because the success of your outsourcing engagement depends on several factors such as labor, best practices, and flexibility. Labor To a large degree, your ability to lower costs depends on your organization’s staffing levels. For example, if every person is performing the work of two or three people, it will be difficult for an outsourcer to provide a cost- efficient alternative in an “apples-to-apples” comparison. However, an outsourcer may be able to take on the existing baseline at an equal or slightly greater cost while establishing a strategy for containing or reducing costs while accommodating future increases in demand.
  • 9. CIBER, Inc. 9 contain provisions to address your changing business #5: Know How an ITO Provider Differs needs and to enable your provider to adapt quickly to From an Application Service Provider accommodate these changes. Successful companies know that limiting the outsourcing scope too tightly (ASP) inhibits the provider’s ability to deliver financial benefits. Some service providers call themselves application service providers, or ASPs. There is a difference between Avoid agreements that require frequent transactions ASPs and ITOs. based on small changes in scope. Instead, create “bands” within which your outsourcer will keep costs steady. Application Service Providers (ASPs) Application Service Providers are defined by webopedia. For example, if you have 350 servers that need to be com—an online dictionary and search engine for Internet managed, then agree with your outsourcer that this and information technology definitions—as “third-party number may increase or entities that manage and decrease by 10% before distribute software-based any price changes are necessary. Flexibility, then, You can save money with outsourcing, services and solutions to customers across a is critical to success. but it often depends on how you set wide area network from a central data center” or the Regardless of industry, companies that have up the outsourcing agreement— Internet. experienced the greatest benefits from outsourcing flexibility is crucial to a success- An ASP is a business that grants its clients access to are those who understand this: the ability to achieve ful outsourcing experience. a single application, such as Microsoft Exchange, benefits from outsourcing is via a Web browser. In directly proportional to the more complex scenarios, scale of operations outsourced. That is, if you outsource an entire vertical-market solution, such as an integrated just a few small projects, the benefits are likely to be medical office patient history and billing suite, may be small. If you outsource an entire activity, the results can offered via a ‘fat client,’ such as Citrix. (In client/server be much more significant.
  • 10. 10 10 Things to Know About ITO ... ASPs and ITO outsourcers offer different ways for clients to reduce costs and increase efficiency. Understanding the difference between the two will help you evaluate which option works best for your organization’s needs. technology, a ‘fat client’ is a client that does the bulk client does. But the ITO provider can offer application of the data processing transactions, as opposed to a development services to help the client customize and ‘thin client,’ which puts the bulk of the data processing integrate the application to its specific needs, and the ITO transactions onto the server.) In this more complex can host and support the applications as desired by the scenario, ASPs may offer clients many applications, client (and, of course, per the client / provider contract). including enterprise resource planning (ERP), customer relationship management (CRM), sales force automation #6: Know The Difference Between (SFA), collaboration, e-mail, and workgroup productivity Shared and Dedicated Environments tools. ITO outsourcers can provide services in dedicated or The ASP owns and operates the software application shared environments, or in a blended environment. being provided to the client. The ASP also owns, operates and maintains the servers, databases and other A “dedicated” environment is fit for a specific purpose— infrastructure that support the software. The ASP bills the the systems, infrastructure, tools, servers, etc. are set up client for the right to use the hosted application; billing is for your use, and only your use. Historically, dedicated typically monthly and is on a on a “per-user” basis. environments were more expensive than shared environments, and they cost more to manage and While the main benefits of utilizing an ASP may be operate. However, in recent years the cost of hardware reduced costs and quicker time-to-market, they come has decreased, so the cost differential between dedicated with tradeoffs. In general, the client must accept the and shared environments is coming down. default applications because the ASP may be unwilling to make customizations. Additionally, integration with systems outside of the ASP environment may prove to be a challenge. Finally, many CIOs evaluating ASPs cite data security issues, such as exposure of company data to other ASP clients, as a primary reason for choosing not to go the ASP route. IT Operations Outsourcers (ITOs) ITO providers traditionally have a different approach for providing services to their clients, and this approach enables a more customized and tailored solution specifically for your business. In contrast to the ASP, whose primary product is access to the ASP’s application(s), the ITO provider offers the infrastructure and systems needed to host and support a client’s applications, whatever those applications may be. The ITO provider does not own the applications—the
  • 11. CIBER, Inc. 11 The advantage of a dedicated environment is that it is Now that you’re aware of the numerous options ITO built specifically and only for your organization’s needs outsourcers can provide, determine what systems and and you can control the maintenance windows for the functions within your organization are good candidates environment. Don’t discount this benefit: having some for outsourcing. Not everything should be outsourced. control over when your environment undergoes its It may be helpful to make a list of your systems and planned downtime is crucial, especially where ERP and assign them a category, such as “highly suitable” for other mission-critical systems are concerned. outsourcing, “moderately suitable,” or “not suitable.” Your outsourcer can help you evaluate the systems, functions, A “shared” environment is designed to accommodate or applications most suitable to outsourcing. many uses—the systems, infrastructure, tools, etc. are shared among several clients. Security is not generally Next, determine what your organization wants to achieve a problem in a shared environment, although sometimes by outsourcing. Examples include accelerated IT people perceive it to be. The real degree to which there development, reduction of risk, reduction or stabilization are or are not security risks in shared environments of costs, or reallocation of critical internal resources, to has to do with how the systems have been built and name a few. architected. However, do not assume that because a system is shared it is inherently less secure than one Third, determine how you will measure results. It’s that is dedicated. In fact, the opposite may be true. helpful to identify a target, whether a specific number or acceptable range. You can always revise this target The degree to which you’re able to take advantage of both number later in the process. For instance, do you want shared and dedicated systems depends significantly on to eliminate or reduce single points of failure to a more the offerings of your outsourcing provider. Assuming your acceptable number? If so, what is that number? Do you ITO outsourcer provides flexible offerings, you may find, want to reduce costs by a certain percentage? If so, what for example, that for your storage and server computing percentage? While you don’t need to know exactly what environments (i.e., production, QA, test), a dedicated your targets are, having a general idea or range will help environment is best for your needs. However, you may you identify and measure progress toward your goals. embrace the idea of your development systems being in a shared environment, along with job scheduling, help Finally, identify the risks and barriers to outsourcing desk, asset management, and other systems. By mixing that you will need to overcome, or at least prepare for. the two strategies you may find the best solution for your For instance, is your organizational culture opposed specific environment. to having work done by outside providers? Will fear or perceived loss of control be an internal barrier? Is your #7: Know That You Must Look organization prepared to meet its responsibilities in the Critically at Your Own Organization outsourcing engagement? When evaluating ITO outsourcing to see if it’s right for After you have identified, understood, and evaluated you, an important—but often overlooked—step is to take your organization’s own ITO outsourcing motivations a look at your own organization. Evaluating the various and abilities, you’ll be ready to identify, understand, and providers and understanding the key concepts of ITO evaluate those of outsourcing providers. outsourcing is important, but so is understanding your organization’s specific needs and preferences. ... Be sure to evaluate the trade-offs of dedicated, shared, and blended environments to determine the right one for your needs.
  • 12. 1 10 Things to Know About ITO #8: Know The Importance of and an outsourcing provider can compromise Managing Expectations During to meet deadlines, manage risk, and minimize downtime, then transitions will run effectively. Transition • Resist the temptation to try to improve while Once you have decided to outsource and are narrowing moving. It is common to try and upgrade down your choice of providers, you’ll need to plan to environments during a transition, since this is a transition your activities to that provider. But before time when systems and operations are in flux. you do—and before you sign the contract with the While there are a few exceptions, the right strategy provider—it will help to be aware of potential issues is to improve and then move, or move and then during the transition so you can make adjustments to improve, but not to do both at once. the contract prior to signing it. After all, the transition is generally considered the most risky part of the project. When the transition is complete, begin the process of making improvements and fine-tuning the relationship While outsourcing is generally a steady-state delivery between you and your outsourcer. The first 12- model, the transition has all the characteristics of a 18 months after transition is a time when frequent critical project. Risks, dependencies, back-out plans, communications, strong governance, and flexibility are and critical paths are all crucial elements to any critical to the success of the outsourcing relationship. transition. #9: Know That the SLA and Penalties It’s important to note that successful, comprehensive planning will avert about 80% of problems. But there for Non-Compliance Are Of The will always be surprises during the transition—count Utmost Importance on it. The secret of a successful transition is not that there are no surprises, but that the surprises—and Once you have decided to pursue ITO outsourcing and expectations—are managed effectively. have selected your outsourcing provider, it’s time to negotiate. Effective transition management requires that you: Two important parts of any outsourcing engagement • Build in extra time for surprises that will inevitably are the service level agreements (SLAs) and penalty come—having the right amount of time to execute clauses. your transition is the best defense against a poor transition. ITO outsourcing requires participation and commitment from your organization. Successful engagements are built, not born, so it’s crucial to understand your needs before trying to outsource them to your provider. • Ensure that the partnership between the client and An SLA is an agreement between you and the the outsourcing provider is strong and provides outsourcing provider. It defines the levels and types of frequent communication plans and disciplined service you can expect and are willing to pay for. As you project management. can imagine, the more demanding the SLA, the higher the cost. • Communicate openly and frequently with your user communities about what is happening, when, and A well-conceived SLA can bring common focus to the why. Ask the user communities for their support most important elements of an IT environment; likewise, during this time—get them on your team! an SLA that is unreasonable can break an otherwise • Respond quickly to surprises and prepare to make positive partnership. As a result, remember that the SLA compromises. The goal of every transition is risk and the penalties for not meeting the terms of the SLA management and minimal downtime. When a client are of utmost importance.
  • 13. CIBER, Inc. 1 Penalties are defined consequences to the outsourcer If the system being outsourced is truly critical, a 99.9% as a result of not meeting the terms of the SLA. (or higher) level of uptime may be necessary, and you Penalties do two things: must be willing to pay for this. You and the outsourcer • Align your areas of greatest concern with the must agree on penalties to be levied if the downtime provider’s behavior and focus exceeds the amount allowed by the SLA, keeping in mind that the penalties are not reimbursement for loss • Ensure that the focus is weighted in proportion to of revenue. the severity of the issue at hand However, if the system being outsourced is not mission- Trouble begins brewing when: critical, then a lower-level SLA may be sufficient. This • Penalties are mistaken for business interruption helps you focus funding and attention to systems which insurance are most critical, saving money by accepting a slightly greater risk of downtime for less critical systems. • Too many penalties are stipulated • Penalties are disproportional to contract value A few points about SLAs and penalties: • Availability SLAs (uptime of systems) must be For example, consider a situation where an SLA is in consistent with the level of architecture and place requiring 99.99% uptime. If there are 24 hours process applied to those systems. Don’t expect in a day, and 365 days in a year, then there are 8,760 3½ nines (99.95%) of availability from a system total hours that year. 99% uptime means 87.6 hours that is only architected to deliver two nines (99%). of unplanned downtime. 99.9% indicates 8.8 hours of downtime, and 99.99% represents less than an hour • Don’t assume that the penalty associated with a (52 minutes) of unplanned downtime. missed SLA is the way to obtain peace of mind in ... Understanding the potential risks during transition can help you craft a flexible, comprehensive agreement with your provider that facilitates a successful engagement for both of you.
  • 14. 1 10 Things to Know About ITO ... When negotiating with your outsourcer, realistically consider the criticality of your various systems, and create an SLA that reflects the importance of each. This helps your budget while maintaining focus on your most crucial systems. a contract – the penalty will generally not give you • Pricing benefits because the outsourcer can business interruption insurance. delegate work across pools of talent • Effective response to an outage is the most • Support services available 24x7x365 important factor to focus on with your outsourcer. • Peace of mind about details • Continuous improvement efforts to EXCEED SLA metrics can be as critical as or more critical than Labor costs are generally lower in India than in many penalties for missed SLA metrics. other nations. However, it’s important to balance those hourly labor savings against other, less tangible, but #10: Know How India Fits Into equally critical factors—such as language support, time zone differential, quality deliverables, and first-call Outsourcing resolution rates. Understanding the trade-offs can help you determine what solution is best for you. When people hear the word “outsourcing,” they often think of sending operations There is no question that leveraging to India. However, the term India and other low-cost delivery “outsourcing” does not refer only to India, but to any facility India is just one of many geographies will continue to drive costs out of IT operations. The where there is an aggregation of capabilities and processes viable outsourcing options. lessons learned from application outsourcing will be crucial to to increase efficiency and effective infrastructure and reduce costs—whether in Bangalore, Boise, or British operations outsourcing. The model used to manage Columbia. cultural differences, planning and architectural tasks versus engineering tasks, and the use of tools and What’s more important than the location of the technology will all be critical success factors in the outsourcing operation is what you gain: effort to use India as one path toward obtaining cost- • The benefit of a larger group of experts effective IT operations services. Conclusion Determining whether outsourcing makes sense for your organization is a big job. And selecting the appropriate outsourcing partner is just as important. When it’s approached wisely, IT operations outsourcing can provide an efficient, cost-effective alternative for companies that need to stabilize or reduce ITO costs, improve customer service, or ensure regulatory compliance. In the end, today’s business pressures and focus on efficiency means companies of all types and sizes, across all industries, must decide which issues are most critical. As organizations continue to focus on their core business objectives, the motivation to outsource functions that are distant from their core mission will become more prominent. Since it is rare to find IT infrastructure and operations as core functions, it is no surprise that the expected future growth rates within this area of outsourcing continue to be strong.
  • 15. CIBER, Inc. 1 About the Author MARK PERLSTEIN Vice President and General Manager CIBER IT Operations (ITO) Mark Perlstein brings 18 years of experience in business and technology, and is tasked with leading CIBER’s IT Operations Practice, CIBER’s infrastructure and IT operations services group. His expertise is in helping clients achieve efficiencies, cost savings, and service level improvements in all areas of infrastructure, including help desk, maintenance, data center hosting, and general systems support. Prior to joining CIBER, Mark managed a $175 million services group in Boston, and has a strong background in general operations and go-to-market strategies for technology services organizations. Earlier in his career Mark was a founder and principal of his own accounting and financial systems consulting firm, which he sold to a Long Island integration firm in 1995. He can be reached at mperlstein@ciber.com ... Why CIBER? CIBER is a leader in assisting business and government clients with their IT initiatives, including IT operations outsourcing, ERP, IT security-business intelligence, data governance, data warehousing, and service-oriented architecture. CIBER’s technical expertise, business acumen, industry knowledge, and exemplary customer service have been acknowledged by clients and industry experts since CIBER’s inception in 1974. But don’t just listen to us – listen to the experts! • CIBER ranked 8th among global IT outsourcing vendors, June 2007, Brown-Wilson Group Survey • CIBER ranked 12th among all outsourcing vendors, June 2007, Brown-Wilson Group Survey • CIBER ranked 1st among outsourcers to energy and utilities industry, May 2007, Brown-Wilson Group Survey • Gartner, Inc. Magic Quadrants: • Magic Quadrant for Help Desk Outsourcing, North America, 2006 (published 26 March 2007) • Magic Quadrant for Desktop Outsourcing Services, North America, 2006 (published 26 March 2007) • Magic Quadrant for Business Intelligence Services, North America, 2007 (published 13 March 2007) • Magic Quadrant for North American ERP Service Providers, 2006 (published 5 June 2006) • CIBER ranked among top IT providers to state and local government sector, March 2007, Washington Technology Magazine • CIBER ranked 1st among outsourcers to higher education sector, March 2007, Brown-Wilson Group Survey • CIBER wins 2 CA Partner of the Year Awards, January 2006, CA (formerly Computer Associates) For more details about these awards, please visit www.ciber.com/ciber/press/awards.cfm
  • 16. CIBER, Inc. (NYSE: CBR) is a pure-play international system integration consultancy with superior value-priced services for both private and government sector clients. CIBER’s global delivery services are offered on a project or strategic staffing basis, in both custom and enterprise resource planning (ERP) package environments, and across all technology platforms, operating systems and infrastructures. Founded in 1974 and headquartered in Greenwood Village, Colo., the company now serves client businesses from over 60 U.S. offices, 22 European offices and five offices in Asia. Operating in 18 countries, with over 8,000 employees and annual revenue of nearly $1 billion, CIBER and its IT specialists continuously build and upgrade clients’ systems to “competitive advantage status.” CIBER is included in the Russell 2000 Index and the SP Small Cap 600 Index. www.ciber.com CIBER, Inc. • 5251 DTC Parkway • Suite 1400 • Greenwood Village, CO 80111 • 800.242.3799 © 2007 CIBER, Inc. All rights reserved. CIBER and the CIBER logo are registered trademarks of CIBER, Inc. CIBER stock is publicly traded under the symbol “CBR” on the NYSE.
  • 17. For additional information or to speak to a CIBER ITO expert, please contact: Mark Perlstein 800-242-3799 mperlstein@ciber.com Jon Scarpelli 800-242-3799 jscarpelli@ciber.com Michelle Semmer 303-220-0100 msemmer@ciber.com and ask if you qualify for a FREE one hour consultation or visit: www.ciber.com/services/ito