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
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
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.
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
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.
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
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.
“Key Issues for Outsourcing, Infrastructure and Applications,
2007,” Gartner, Inc., Allie Young, 21 March 2007, G00146993
#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
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
Data Center Tier 1
Operations • Incident
Facilities Help Desk
Center • Change
Figure 1: The ITO “Stack”
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.
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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
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.
• 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.
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.
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.
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.
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.
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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
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
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 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
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
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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.
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.
• 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.
#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
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
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
• 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.
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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.
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
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.
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.
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About the Author
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 firstname.lastname@example.org
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
• 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
For additional information or
to speak to a CIBER ITO expert,
and ask if you qualify for a FREE one hour consultation