Defining the next paradigm of IT outsourcing

Maintaining existing IT infrastructure continues to come at the expense of innovation and strategic value

In his book The Structure of Scientific Revolutions, Thomas Kuhn explained that a paradigm is a worldview that is vulnerable to being displaced when new ideas render it obsolete.

It's increasingly clear that conventional approaches to IT infrastructure management are not aligned with the expectations and demands of our fast-paced, networked, global economy. However, a new paradigm has not yet been thoroughly articulated or embraced. Indeed, there is plenty of evidence of resistance from the IT and vendor camps.

And yet, the outlines of a new worldview are in sight. Companies that embrace this view will increasingly concentrate their internal IT resources on delivering competitive advantage and outsource the rest. Solutions will be solidly based on predictability, scalability and process-driven systems, not personal expertise or globally arbitraged labor.

Times of great change require bold yet thoughtful leaders. IT executives will need to develop specific plans that enable them to move dedicated resources from foundational IT to strategic IT in a timely manner. They will also need to concentrate on getting quick wins through the outsourcing of discrete, well-defined activities that represent manageable risk and measurable rewards.

Clearly, the cost of maintaining existing IT infrastructure continues to come at the expense of innovation and strategic value. Will companies embrace the new worldview or remain committed to supporting, maintaining and defending the old one.

Outsourcing partners cannot deliver true operational excellence if their business models are based merely on skilled labor. There are several key capabilities that companies should look for in an infrastructure outsourcer.

* Proactive methodologies and capabilities. Rather than waking up a service technician or a database administrator in the middle of the night to deal with a problem, outsourced support for the infrastructure should be around-the-clock. Central to the future success of outsourcers in network management, help desk, database administration and other areas is their ability to address concerns and problems on a 24/7 basis. Monitoring technologies should give them clear visibility into the operational issues associated with their area of specialization. They'll need to rely on systems and methodologies to ensure they deliver on their service-level agreements. It is often impossible to provide these levels of service if the activities are managed entirely in-house or completely overseas, which are models that cannot offer 24/7 monitoring and problem resolution.

* Predictive assessment and action. While in-house and outsourced resources can solve problems, they generally don't have the process-driven systems necessary to predict and analyze key patterns and take action using that knowledge. One of the key benefits of systematic, automated solutions is the clear visibility they provide into technical problems and the ability to analyze the likely frequency of them occurring. Outsourcers should constantly assess and analyze infrastructure performance to ensure it is meeting established service levels. They should provide access to trending data and actively predict, for instance, when a company may run out of data-storage capacity. Drawing on insights and best practices from an array of clients, outsourcers should provide predictive guidance that helps clients better invest in IT infrastructure for maximum effectiveness.

* Dynamic, scalable business models. Business models based on labor can scale up arithmetically, but business models based on systems can scale exponentially. While process-driven outsourcers actively use the skills and expertise of their people as leverage, labor-driven outsourcers add more people to meet greater demands. Over time, these two models lead to a significant divergence in terms of value, quality and capability.

Low-labor cost models offer apparent advantages in the short term but they may be unable to scale cost-effectively to meet the growing needs of their clients. Nor can their systems capture the knowledge and insights drawn from past experience. When talent is hired away, they take their client knowledge and experience with them. Infrastructure outsourcers should actively capture knowledge and embed it in the system, not merely in the minds of consultants.

Demands are exploding for everything from network support, database administration and help-desk assistance to computing capacity, data storage, security and other areas. Companies that hope to keep up with the enormous infrastructure demands associated with strategic IT must have service providers who can scale to meet their needs.

It's important to recognize that companies can realize quick wins with respect to outsourcing discrete, technical tasks associated with specific aspects of the underlying IT infrastructure. While some outsourcers handle an array of outsourcing roles and manage all sorts of IT assets, new-wave outsourcers tend to specialize.

Companies that are disappointed with their outsourcing deals tend to be in labor-driven relationships of the past. Fortunately, there are new opportunities for companies to begin embracing outsourcing in a way that limits risk and gives rapid returns. These opportunities represent a path to operational excellence as the challenges of infrastructure management become increasingly clear.

Bostick is president and CEO of dbaDIRECT. which provides data infrastructure management services.He can be reached at john.bostick@dbadirect.com.

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