Outsourcing
Gartner, 6/30/03: New Certification Standard Will Raise Quality of Outsourcing
Carnegie Mellon University has released a new version of its eSourcing Capability Model for IT services providers. This will help satisfy global demand for better certification of companies offering outsourcing services.
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Giga, 6/30/03: Business Transformation Outsourcing: The New Face of BPR?
William Martorelli
Should business transformation outsourcing be considered part of the business process outsourcing market?
Leading integrators, including Accenture, CSC, EDS, Deloitte Consulting and IBM, are pursuing business transformation outsourcing (BTO) engagements with increasing vigor. BTO relationships represent a new type of business process reengineering (BPR), transaction affecting a variety of business process types, including finance and accounting, human resources, procurement and others, essentially with a business process outsourcing (BPO) outsourcing tail.
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Giga, 6/30/03: Can Business Process Outsourcing Help Make IT Costs More Variable?
William Martorelli
Can business process outsourcing help IT organizations improve the ratio of fixed-to-variable IT costs?
Under the direction of business and financial executives, IT organizations are anxious to transition fixed IT costs into variable IT costs. One increasingly popular mechanism to effect this transition is outsourcing, including business process outsourcing (BPO). But is BPO really a variable-priced service?
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Giga, 6/30/03: Take Advantage of Current IT Spending Climate to Institutionalize Sourcing Disciplines
William Martorelli
How can IT organizations take advantage of today’s constrained IT spending to institutionalize sourcing disciplines?
The IT industry is currently consumed with debate whether IT has been relegated to a mere commodity or whether enterprises are placing themselves at risk by cutting IT spending at the possible expense of competitive advantage. Which is the correct answer? As always, it is not a matter of the sheer magnitude of spending but the effectiveness of that spending in alignment with business goals.
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Giga, 6/30/03: Outsourcing Business Processes and IT Services: A Best-of-Breed Approach Is Required
Stephanie Moore and William Martorelli
We are in the midst of a sourcing process wherein we are exploring offshore outsourcing alternatives for SAP application development and maintenance. A parallel group within our company is looking at offshore financial services business process outsourcing (BPO). Some prospective suppliers tell us that by combining these requirements and sourcing to one vendor, we can expect to get greater scale economies and a more integrated, flexible and effective solution. We’re concerned that this approach might lead to quality compromises (e.g., the most qualified IT services providers may not be the best BPO providers) and lock us into a situation where the supplier would have too much control over our financial processes and systems. What do you believe might be the pros and cons of this approach?
Companies looking to offshore outsourcing IT-related services and business process outsourcing (BPO) services should not feel compelled to outsource them to the same supplier. In fact, they should only do this under following rare circumstances:
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Giga, 6/30/03: Increased Visibility: The Downside of Variable-Priced IT Services
William Martorelli
Do variable-price IT services entail higher management scrutiny of IT charges? Many IT organizations are seeking to both cut IT costs as well as transform the IT cost base into a variable cost base. In response, variable priced options for many categories of products and services are expanding. While most pricing schemes still entail some combination of fixed and variable costs, the variable element is increasing over time. However, the ability of the enterprise customer to accommodate variable pricing remains limited. Rather, many organizations continue to require high levels of predictability in costs for the purpose of more accurate budgeting.
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Giga, 6/30/03: 2003 Market Rates for IT Consultants
Craig Symons
We are looking for a list of the current market rates (hourly and monthly) for IT consulting positions that fall into the project management and business and strategic analysts categories. Does Giga have such a list?
Since Giga last published research on this subject (see IdeaByte, Market Rates for IT Consultants, Kazim Isfahani), the entire consulting market has remained under intense economic pressure. As a result, most consulting companies have continued to lay off consultants and have adjusted their strategy and rates to keep as many of their top people employed and to cover their fixed costs. This means that generally (not in every single case) you should be able to negotiate rates that are anywhere from 10 percent to 40 percent less than those published in the original IdeaByte.
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Giga, 6/30/03: Sluggish Demand and Overcapacity Lead to Lower Consulting Rates
Pascal Matzke and Robert McNeill
Can you provide an overview to the consulting rates currently charged by major IT service vendors?
IT consulting prices across all layers of the horizontal service stack continue to fall as a result of continuously low demand as well as overcapacity on the supplier side. While the advent of the global economy during the last two years had already diminished regional differences in the relative rates charged by service vendors in North America and Western Europe, during the last few months buyers have become far more sophisticated and demanding in their overall IT sourcing approach. By leveraging consistent means to measure and monitor the effectiveness of services investments, many end users aim to leverage corporate buying power as well as reduce the overall services costs.
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Wirless LAN
Giga, 6/30/03: Evaluation Criteria: Wireless LAN Management
Stan Schatt
The wireless local area network (WLAN) network management landscape is changing very rapidly in part because of the wealth of startups that have raised the bar on features. In particular, real-time monitoring, self-healing and graphics-oriented site survey tools all now are must have items. Established WLAN vendors will have to dramatically enhance their own software or see their market share begin to erode.
Recommendations
If hybrid networks are planned, look for site survey tools that can automate the process of placement of
hybrid access points.
If a client has a major concern about WLAN intruders, then real-time, 24x7 monitoring should be a high
priority.
Clients with switched networks on the wired side that do not use third-party management software but use the switching vendors’ own software should consider adding those vendors’ wireless LAN products so that one integrated network can be managed by a single program. That will simplify administration as well as training.
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Security
Gartner, 6/30/03: Firewalls: Technology Overview
If your company’s networks are connected to the Internet, you need a firewall — one that uses deep-packet application content inspection.
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Management
Harvard Business Review, 7/1/03: What Really Works
When it comes to improving business performance, managers have no shortage of tools and techniques from which to choose. But what really works? What's critical, and what's optional? Two business professors and a former McKinsey consultant set out to answer those questions. In a groundbreaking, five-year study that involved more than 50 academics and consultants, the authors analyzed 200 management techniques employed by 160 companies over 10 years. Their findings at a high level? Business basics really matter. In this article, the authors outline the management practices that are imperative for sustained superior financial performance--their "4+2 formula" for business success. They provide examples of companies that achieved varying degrees of success depending on whether they applied the formula, and they suggest ways that other companies can achieve excellence. Without exception, the companies that outperformed their industry peers excelled in what the authors call the four primary management practices: strategy, execution, culture, and structure. And they supplemented their great skill in those areas with a mastery of any two of four secondary management practices: talent, leadership, innovation, and mergers and partnerships. A company that consistently follows this 4+2 formula has a better than 90% chance of sustaining superior performance, according to the authors.
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Big Ideas
Ray Ozzie’s Blog, 7/3/02: Extreme Mobility
I believe we're currently in a transition period for personal computing: from a tethered, desk-bound, personal productivity view, to one of highly mobile interpersonal productivity and collaboration, communications, coordination. We're focused right now on devices and networks because we're coming at the problem bottom-up: preoccupied by gizmos and technologies' capabilities rather than focusing on how our lives and businesses and economies and societies will be fundamentally altered.
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