Outsourcing
Optimize, 2/03: Outsource IT, Not Value
If you don't analyze your value chain first, you may outsource IT functions that are core to your business or base decisions on the wrong metrics
by Michael E. Raynor and Daniel Littmann
No doubt, IT outsourcing is growing in popularity among companies of all sizes. Almost 30% of businesses with sales greater than $10 million are now outsourcing at least some component of their IT or communications infrastructure. And while it's commonplace to do exhaustive financial analysis to determine the profit impact of these decisions, in our view, not nearly enough strategic analysis is done on outsourcing—largely because managers have lacked the means.
The decision to outsource even a small portion of an enterprise's IT functions is emotional and often dominated by a company's culture and values. Conventional wisdom usually rules. However, at a time when outsourcing contracts run into hundreds of millions of dollars, competitive companies can hardly rely on convention to dictate strategy. For example, one of the most powerful and useful concepts in management over the past 15 years has been the notion of core competence. Yet for all the insight it offers, core-competence thinking can be limiting when outsourcing.
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Press Release, 2/21/03: Telecom Italia and HP Announce Strategic Outsourcing Agreement
Five-year Agreement Valued at 225 Million Euros
ROME, Feb. 21 /PRNewswire/ -- Telecom Italia, one of the most important Italian groups, a leader in wireline and wireless telecommunication services and a key player in the ICT market, and HP (NYSE: HPQ) have reached a Management Services & Outsourcing agreement, for a duration of five years, sworth 225 million Euros.
Under the terms of the agreement, HP will provide the IT management services for the desktop systems of Telecom Italia's 90,000 users. As a result, Telecom Italia will achieve significant cost savings in the group's distributed IT environment management and allow the group to focus its skills and resources on its core business.
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Gartner, 2/14/03: Gartner's BPO Market Model Spots Processes to Outsource
Gartner's business process outsourcing model helps enterprises segment and analyze the totality of their internal business processes. The analysis identifies the processes that can be supported by external service providers.
Since 1999, two forces have been at work in the business process outsourcing (BPO) market. First, we have seen the emergence of aggregated service offerings — for example, a BPO offering is inclusive of all major human resources (HR) processes or several specific finance and accounting processes.
Second, enterprises are increasingly accepting BPO as a viable means to focus on core competencies, take costs out of current operations and speed the time to implement new technologies.
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Gartner, 2/13/03: SMB Services and Software Market U.S. Forecasts, 2003
In 2002, many vendors declared their intention to win over the small and midsize business (SMB) market. As shown in this document, this is with good reason. Generating the majority of vendor revenue in many technology service and product categories, the opportunity is hard to ignore, especially because the large enterprise market appears saturated with the solutions on the market to date. Those that benefit from revenue generated from the SMB market are among a fragmented host vendors; those that can do so profitably are the minority.
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Desktop Outsourcing
Giga, 2/14/03: PCs Provided by Third Parties: Review Licensing, Security and Management Responsibilities Carefully
David Friedlander
What issues should be considered when allowing a software or business services vendor to place a PC on premises to facilitate connectivity to its service?
Third parties such as shipping companies and financial information firms often place PCs or terminals at client sites to facilitate service delivery. In many cases, the systems are proprietary terminals (such as those provided by Bloomberg) and are locked down. However, in other cases, third parties may simply provide a PC with additional software installed. Clients should expect these vendors to take primary responsibility for licensing, maintenance, antivirus and security if the PC is included as part of a service. In instances where the client leasing or purchasing the PC, the vendor is less likely to take responsibility for managing it. In either case, potential licensing, manageability and security issues exist. End users should review licensing, maintenance and security issues for these systems to determine what level of responsibility the vendor is taking for managing the PCs and protecting any sensitive information. Dedicated PCs or terminals should be locked down, have password access and be placed outside the firewall.
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IT Services
Gartner, 2/7/03: Worldwide IT Services Market Shares, 2001
Abstract: IBM maintained its top position with IT services revenue of nearly $35 billion, up 5.4 percent on the previous year. Among the top 10 vendors, only Fujitsu and Cap Gemini Ernst & Young saw slowing growth in 2001.
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Call Center Management
Giga, 2/17/03: Old Metrics and New Technology May Spell Trouble for Contact Centers
Elizabeth Herrell
What metrics are important for capturing agent behavior?
Despite the investments many companies have made in contact center solutions, mediocre customer satisfaction ratings indicate many customers fail to receive the level of service anticipated. Too often, companies make the wrong investment choices or fail to monitor how contact centers perform. Many organizations strive to lower costs by measuring how efficiently an agent performs a task — and neglect to monitor for quality. This often leads to abrupt calls, poorly written e-mails, inadequate Web support and, ultimately, customer dissatisfaction. Agents are tasked with many new responsibilities in multiple-channel operation centers and require training to support complex daily activities. Regular monitoring of their interactions for both voice and data contacts provides supervisors with information on an agent’s performance and identifies potential problems. Factual information helps supervisors objectively coach their staff and promotes quality interactions with customers. Simultaneously monitoring voice and data agent performance needs to be on the short list for companies that want to improve customer satisfaction levels.
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Mobile
Infoworld, 2/20/03: WLAN smart card consortium launched
Group to build specs for roaming use
By John Blau February 21, 2003
A new industry consortium will develop standards for smart card technology to help corporate users gain secure, easy access to public high-speed wireless Internet networks sprouting up around the globe.
The WLAN Smart Card Consortium aims to establish a set of specifications to allow business people to use smart cards to access public WLAN (Wireless LAN) hotspots around the world and pay for the service. The consortium is being launched by 19 companies and institutions including Alcatel of France, Dai Nippon Printing of Japan, Infineon Technologies of Germany and Texas Instruments of the U.S. , the group said Thursday in a joint statement.
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Network Management
Computerworld, 2/21/03: Visualizing network security
By Chris Scott
Auditing regulations mandate that security administrators log and analyze all information that travels within their networks. A firewall can produce more than 1GB of log data, and an intrusion-detection system (IDS) can produce 500,000 messages per day, all of which need to be sorted through by professionals.
It's nearly impossible to read all of these logs, which may come from IDSs, virtual private networks, firewalls and Web servers. The company may have time to go through only a sample of them and could risk missing internal inappropriate activity or an intruder in stealth mode. Missing an inappropriate activity could have a serious impact on the company's reputation and bottom line.
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Microsoft
ZDNet, 2/21/03: Microsoft pushing NT 4 out the Window
By Mike Ricciuti
A deal cinched Wednesday could help Microsoft tackle a long-standing problem: How to sell new software to customers reluctant to give up a 7-year-old version of Windows.
Microsoft's acquisition this week of software and related patents from Connectix, a maker of virtual machine software, also gives the company a new weapon for its battle with rivals including Sun Microsystems and Oracle, analysts said Thursday.
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Emerging Technology
Giga, 2/3/03: Emerging Technology Scene Survey Results: Change Is in the Wind
Rob Enderle
This year at Giga’s Emerging Technology Scene (ETS) conference, attendees — typically the strongest technology influencers in their companies — registered a clear increasing confidence in Hewlett-Packard (HP) and Dell, while IBM moved in the opposite direction and Microsoft improved sharply but still brought up the rear.
In addition, attendees continued to show their dissatisfaction with current PC technology, pushing out the likelihood of a near-term recovery. In fact, they are going out of their way to show they want a modular approach to personal computing and are demanding a level of standardization and stability that has yet to be seen in the market.
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