Industry news

If 2011 was the year of the cloud, with increasing adoption across the market, then this year will see the technology move into its awkward adolescent years - and like any growing solution, it will be difficult to keep under control. Critical for 2012 is that cloud services can operate within a hybrid architectural environment, and deliver truly enterprise-class services. To realise this, the outsourcing industry will have to adopt an approach which adheres to a more industrialised method.

Recent reports from both Gartner and IDC have identified industrialised models as an emerging trend and highlight that it will become increasingly important to standardise IT processes in 2012. In order to cope with growth, change and the ability to react quickly to business demands, standardisation of IT process will extend beyond platform standards (already implemented by many organisations to replace the bespoke application-per-environment design and implementation practice of the past) and into standardisation of IT management practices; from the service catalogue of what can be delivered to what SLA; through to the underpinning tools and process which cover service design, service transition and service operation.

Industrialising such services makes them infinitely more scalable, repeatable and transparent. Such industrialisation relies on the adoption of standard practices, but also on the management tools and systems which will support – and indeed govern – IT practices. Integrated service management tools will underpin consistency in delivery, and also facilitate the automation of service management activities.

With ever more pressure to deliver effective, lower cost IT services, 2012 will see the increasing adoption of automation, and increasing emergence of autonomics. Rather than chasing the promise of low cost resources around the globe, delivering IT services using adaptive self-learning technologies will not only reduce costs, but also offer improved scalability, flexibility, and compliance.

Automation is beginning to see mainstream adoption; organisations are starting to recognise it as an essential tool for industrialisation and a key level in reducing costs and improving consistency. But self-managing, self-governing, and self-healing technologies are also emerging strongly. From appliances and products that can proactively detect and heal problems, through to holistic support infrastructures that automate not just execution of activities, but decision making based on multiple inputs and circumstances.

The critical difference between automation (systematic execution of a series of tasks) and autonomics (self-governing systems) is that ability to automate complex decision trees, and add contextual awareness to such decision making. To extend this capability across multiple disparate systems that underpin a complex business service requires the integration of monitoring, management and automation technologies into a single platform with the ability to continually learn and improve based on experience.

Naturally the automation of activities reduces reliance on IT staff who would otherwise be required to undertake these tasks. Firstly, automation is a much more robust approach to staff efficiency than the typical and traditional labour arbitrage through offshoring. Secondly, automating low level, systematic and often mundane tasks actually liberates expensive, intelligent IT staff to focus on change programs and services which add business value. All CIO’s, bar none, would love to refocus their teams away from “run the business” and on to “change the business”. Automation provides a great way to realise this desire.

Outsourcing is traditionally associated with getting help to do things you might not normally associate with your core business. Andrew Kershaw describes a different approach to outsourcing that can establish IT excellence and create significant commercial advantages as a result.

Over the last 15 years, I have observed a number of different IT teams and experienced a wide variety of situations where outsourcing has been involved. But what distinguishes a really good IT team from an also-ran?

Let’s first look at the role of business technology. Experience has shown me that IT has two very different roles; as a ‘utility’ providing technology on tap; and as an ‘enabler’ that improves the bottom line.

The ‘utility’ perspective of IT is well-disposed to successful outsourcing. However, as a successful operator in the field, we know that outsourcing can be far broader in its scope and potential. To really make a difference to your organisation, its clear priority must be enabling and delivering technology-based innovation. This is where competitive advantage can be gained and goals materialised. It is vitally important that IT contributes more than just running infrastructure effectively and inexpensively.

Outsourcing doesn’t mean having to move all of your IT functions out to a supplier. Ideally, the first thing you should do is identify the strengths and weaknesses of your business in its ability to deliver quality business technology. Once this is established and you have a better idea of what you want (and what you don’t need), you’re in a position to choose the right supplier to add value.

A good outsource partner provides complementary skills, knowledge, ideas and creativity to help their client achieve competitive advantage; meaning effective providers are viewed as strategic partners rather than suppliers.

Good relationships and communications are crucial Successful IT outsource partnerships are built on strong relationships. If the customer is to extract maximum performance from his outsourced partner, he must approach the relationship with similar vigour. Communicating at the right level leads to productive and profitable relationships; a business leader, such as the CIO or IT Director, should act as the key point of contact for the outsource provider helping to keep IT in line with the business strategy.

Efficient execution of the ‘utility’ side of IT is an absolute priority. If it isn’t, then system availability, reliability and support issues will start to impact on the relationship with senior people. This will distract the IT leader, whose time will be spent in fire-fighting and damage control. Both credibility and relationships are almost guaranteed to go downhill as a result.

Must add value Outsourcing can be associated with cost benefits, although this is not as simple as it at first seems. To achieve cost reductions, an outsourced provider needs to find ways to deliver services for less, which may not be feasible where client IT functions are already fairly lean. In this case value can be added in the form of expert capabilities and service quality. An internal IT department must deliver a considerable number of capabilities; this is only possible with smaller IT functions by drawing on specialist expertise. Outsourced providers can offer flexibility as well as continuity with such capabilities. If you need a particular expertise every now and again, it can be hugely advantageous to draw on the same team you’ve invested in by building relationships and domain knowledge. A good outsourced provider will deliver this sort of flexibility as an implicit part of their contract.

Service quality can vary between providers; but the inevitable competition between the best helps to ensure constant focus on service quality. As an outsourced service provider, delivering consistently high standards of service is critical to survival: otherwise we risk losing clients who always have the option to change providers. We deliberately structure our contracts so it’s straightforward for our clients to do this without penalty; it keeps us on our toes!

Far from being a tedious necessity, IT Outsourcing can be a revelatory and transformative addition to your operation. In an unpredictable world and uncertain times, change is all. And achieving the correct changes to survive and prosper, your business should look to those who understand, and often create, these disruptions.

“Effective immediately, we will be bringing our technology, tools, and team to the revenue engineering team at Twitter,” Dasient wrote on its company blog.

Known for its anti-malware platform, which can scan web addresses to assess the presence of harmful content, Dasient represents Twitter’s second web security acquisition in three months. In November, Twitter bought Whisper Systems, an encryption startup that originally built encryption software for Android.

The purchase of Dasient is the latest sign of San Francisc0-based Twitter’s growing dedication to online security, an issue that the company had skimped on in the past. Along with its web address analysis products, Dasient has also created a service that can hunt down malicious online advertising to protect the ads and content of customer websites.

Stepping up his campaign against outsourcing, US President Barack Obama announced a series of measures that would offer incentives to those firms which will create jobs in the country, a move that may also affect companies in India.

"If you're a business that wants to outsource jobs, you shouldn't get a tax deduction for doing it," Obama said in his State of the Union Address during which he presented an economic blueprint aiming to take his country away from outsourcing, bad debt and phony financial profits.

Many of his proposals centred on changes to the tax code, including limiting deductions for companies that move jobs overseas, rewarding companies that return jobs to the United States and increasing taxes on wealthy Americans.

UK economic activity shrank by 0.2% in the last three months of last year according to official figures.

It marks a sharp drop in economic activity from the third quarter of 2011, when gross domestic product (gdp) expanded by 0.6%.

The figures, from the Office for National Statistics (ONS), are a preliminary estimate, which could be revised either up or down by 0.2%.

Apple reported record-breaking net profits for the three months to 31 December 2011 of $13.06bn (£8.36bn).

This figure is up 118% from the same period in 2010.

The company also sold 37 million iPhones, more than twice as many as it sold in the last quarter of 2010.

Software and outsourcing firm Quindell Portfolio has announced plans to buy personal injury specialist Silverbeck Rymer and combine it with its claims and Mobile Doctors business to provide a joint outsourcing offering to the UK insurance claims market.

The proposed acquisition, which values Silverbeck Rymer at £19.31m, involves £10.25m in cash and the issue of up to 120.8 million Quindell shares at 7.5p each, which will be subject to lock in arrangements ranging from 12 to 36 months.

Nelson will hold the post alongside his existing position as the Ministry of Justice (MoJ) CIO and will take over from Joe Harley, who will be retiring from the civil service at the end of March.

Nelson has been heavily involved in the government's cloud computing plans over the last year.

Commenting on the appointment, Ian Watmore, permanent secretary at the Cabinet Office, said: "It is fantastic to be able to assign the role of government CIO to someone who has held major CIO roles in private sector and has been involved in the ICT strategy since the very beginning. Andy has worked closely with Joe over the past months and will continue to do so – ensuring that we continue to deliver ICT services fit for a modern civil service."

Nelson will hold the post alongside his existing position as the Ministry of Justice (MoJ) CIO and will take over from Joe Harley, who will be retiring from the civil service at the end of March.

Nelson has been heavily involved in the government's cloud computing plans over the last year.

Commenting on the appointment, Ian Watmore, permanent secretary at the Cabinet Office, said: "It is fantastic to be able to assign the role of government CIO to someone who has held major CIO roles in private sector and has been involved in the ICT strategy since the very beginning. Andy has worked closely with Joe over the past months and will continue to do so – ensuring that we continue to deliver ICT services fit for a modern civil service."

The Department for Work and Pensions (DWP) has awarded a significant desktop management contract to HP under the Desktop 21 framework agreement.

The five-year £316m Desktop 21 deal covers a range of desktop services including security, print, service desk and device provision and support, and will see the DWP move to HP's WorkPlace360 desktop management platform from 2013.