Outsourcing
CIO Magazine, 5/15/04: Life After Outsourcing
The CIO. The VP. The Manager. The Outsourced Employee. We get up close with four characters in a life- and career-altering drama that's being played out at Nextel and in IT departments all over America.
BY MERIDITH LEVINSON
SHORTLY AFTER Dick LeFave arrived at Nextel Communications in February 1999 as the company's new senior vice president and CIO, he concluded that Nextel could vastly improve its IT operations and its sagging bottom line (it had posted a $1.8 billion loss in 1998) if it outsourced a good portion of its IT. "The need here was to build a company that if [Nextel CEO] Tim Donahue wanted to press a button tomorrow and say, 'Hey, LeFave, we're going to grow this thing two or three times,' I didn't want to be standing in front of him saying, 'We can't scale.'"
LeFave had negotiated and led outsourcing arrangements for two of his previous employers, Southern New England Telephone and The Boston Co., a subsidiary of American Express. So he knew what he was getting into when, between 2000 and 2002, he signed long-term, big-money contracts with Amdocs to run Nextel's billing system (nine years, approximately $1 billion), with EDS to take over desktop and help desk support, network management and data center operations (five years, $234 million) and with IBM to manage Nextel's call center (eight years, $1 billion). He kept project management, application development and testing in-house.
What LeFave knew was that once he signed those contracts, his role would change, his department would change, and the lives of the 700 people working under him would change.
CIO Dick LeFave believes that Nextel's outsourcing deals have taken the burden of day-to-day operations off his shoulders and allowed him to focus on "running IT like a business."
LeFave had no illusions. He knew shrinking the 285 Nextel workers in the IT operations department down to 20 wouldn't be pleasant. And he knew that he wasn't suddenly going to be free to spend more time fishing for flounder off the coast of Connecticut where his family vacationed. He knew his beeper would still go off every time a server went down, although it would no longer be his job to bring it back up again.
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Offshoring
Forrestor Press Release, 5/20/04: Forrester Finds Near-Term Growth Of Offshore Outsourcing Accelerating
Latest Research Indicates A 40 Percent Increase In Jobs Moving Offshore In The Next 18 Months
Orlando, Fla., May 17, 2004 . . . The movement of US services jobs offshore will accelerate faster than originally projected, according to new research from Forrester Research, Inc. (Nasdaq: FORR). At a press conference held at GigaWorld IT Forum, Forrester revealed that the number of US services jobs moving offshore by the end of 2005 will grow to 830,000 compared with its original projection of 588,000 — an increase of 40 percent.
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IT Management
Computerworld, 5/20/04: Measuring IT's impact on productivity
MIT researchers and corporate CIOs try to link tech investments to the bottom line
News Story by Thomas Hoffman
CAMBRIDGE, Mass. -- MIT researcher Erik Brynjolfsson has long held that IT has had a significant effect on corporate productivity.
But "the real unsung heroes" behind the 4.5% rise in U.S. productivity over the past three years are the business process changes that have accompanied new technology implementations across companies, said Brynjolfsson, who spoke at the inaugural MIT Sloan CIO Symposium held here yesterday.
Brynjolfsson, director of the MIT Center for eBusiness, pointed to a study of 1,167 large companies that he's been conducting for the past 10 years. In an analysis of corporate revenues and market value, computer capital and other capital investments, Brynjolfsson has found that companies that invest heavily in IT and make corresponding changes to their business processes tend to have higher productivity and higher market values than other companies.
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Security
Computer Weekly, 5/20/04: Rock guitar maker reduces virus threat with mixed infrastructure
Peavey Electronics UK, part of the global rock guitar and amplifier company, has deployed a mixed IT infrastructure to avoid the security risks of a Microsoft-only environment.
The Sasser worm, which afflicted Windows users earlier this month, exploited a security hole in the Windows authentication service, which came to light when Microsoft issued its monthly patch update in April. After the patch was released, users had just over two weeks to test and install the patch before virus writers engineered and released Sasser.
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Microsoft Update, 5/20/04: Patchy the pirate walks the plank
What have we started?! Following a posting in this Weblog five weeks ago, two of my colleagues, Mitch Wagner and George Hulme, have had a public disagreement over what Microsoft's policy should be when it comes to making software patches available for pirated versions of Windows XP. Microsoft itself is torn over the subject, first saying it would provide patches to pirates, only to change its mind a few days later. Wagner is in favor of pirate patches; Hulme, against. Both sides of the argument can be found here.
Computerworld, 5/20/04: 'Indefensible' Wi-Fi flaw discovered in 802.11b network protocol
The flaw could be used to jam wireless networks
News Story by Bob Brewin
Two security organizations have issued alerts warning of a flaw in wireless LAN equipment based on the 802.11b Wi-Fi standard that leaves the devices vulnerable to a denial-of-service (DoS) jamming attack.
The Australian Computer Emergency Response Team (AusCERT) issued a security alert last Thursday, as did the U.S. Computer Emergency Readiness Team (US-CERT), which warned of the potential threat to wireless networks.
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Microsoft
Computerworld, 5/17/04: Muglia Discusses Competitive Threat From Linux
Q&A by Carol Sliwa
Bob Muglia, senior vice president of Microsoft's Windows Server division, last week spoke with Computerworld about a range of issues, including the competitive threat posed by Linux. Excerpts follow:
How is Microsoft differentiating itself from the Linux competition? I don't really think that Linux itself is our competitor. I think Linux is a set of technologies, and open-source technologies in general are a set of technologies that competitors like Red Hat or Novell and IBM pull together to provide alternative competitive solutions for customers. Linux has evolved to be a commercial product. All the customers I sell to buy Linux-based products from companies like Red Hat or Novell. They put them together, stacks with other software, typically commercial software, like WebSphere. And if you look at a solution that exists in that space -- say, an IBM solution -- it's certainly not free. The cost of acquiring that is actually quite comparable to the cost of acquiring a Microsoft solution.
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Microsoft Watch, 5/20/04: Gates Pushes 'Power to the People' Message
By Mary Jo Foley
Microsoft's chairman talks up the business benefits of blogging, RSS, online meetings and other user-empowerment technologies to 100 top CEOs.
How do you explain Real Simple Syndication (RSS) to 100 CEOs, some of whom are barely comfortable checking their own e-mail?
Microsoft Chairman Bill Gates found a way, as part of his keynote that kicked off the company's eighth annual CEO summit taking place in Redmond over the next two days. The summit was closed to the press, but the Gates keynote was Web cast for members of the media.
The productivity benefits accrued by companies that aren't afraid to back "bottoms-up empowerment" was a key theme for Gates during his hour-long address, attended by CEOs from Barnes & Noble, Berkshire-Hathaway, Dell, Delta, Fanny Mae, Hewlett-Packard, Home Depot and other Fortune 1000 firms from around the world.
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Otherwise
The New York Times, 5/18/04: Hollywood Is the Target
By A. O. SCOTT
Like most sequels "Shrek 2," which opens nationwide tomorrow, tries to compensate for potential lost novelty by taking everything people liked about the original and adding more. The prickly main characters, who since the first "Shrek" opened in 2001 have become cuddly plush toys, have returned: the grumpy title character (the voice of Mike Myers); his ogre princess bride, Fiona (Cameron Diaz); and of course the splendidly annoying Donkey (Eddie Murphy). The lessons that DreamWorks derived (and distorted) from William Steig's sublimely dyspeptic picture book are reiterated: be yourself; love yourself for who you are. For myself I accept "Shrek 2" for what it is — a slick and playful entertainment that remains carefully inoffensive beneath its veneer of bad manners — but I don't really love it.
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