September 2013 Archives

IT marriage counselling to ensure outsourcing contracts don't lead to divorce

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I have written extensively about the large amount of contract renegotiations going on at the moment. Keeping suppliers and customers happy at the same time is difficult. Particularly when the economic climate and technology are changing. Everybody has to give a little if they want to take something back. While the customer is always right, the supplier is a businesses that has to thrive to survive and to continue providing a high level of service.

The last thing anyone wants is to end up in court.

In this guest blog post Robert Saxby of ImprovIT, a company made up of former Gartner analysts, talks about relationships and spotting a bad project early.

OUTSOURCING:  Rescuing Relationships and Pre-empting Poor Projects

By Robert Saxby, Director of Consulting, ImprovIT.

"All outsourcing contracts start from a position of expectation:  the customer expects to procure a wide range of IT efficiency improvements at, of course, a reduced cost.  The supplier on the other hand expects to win additional business that is going to contribute to its profit margin. Since the chance of these two sets of expectations meeting in the middle is usually remote, suppliers have found creative ways around the impasse.

The loss leader approach


Often contracts are pitched on the basis of apparently low charges with the supplier expecting to make up the difference over the course of the contract through a process of cost creep that commences following  the initial transitional period and when the contract has settled down into a state of 'business as usual'.  There are numerous ways this can be done including charging a high day rate for low paid staff and incrementally increasing the scope of the project and charging penalty rates for any changes or additions that fall outside of the original contract.  While these tactics may work for a time, eventually the customer notices and the relationship begins to break down. The customer is now running all costs through a fine tooth comb and questioning everything that is produced from new project suggestions to monthly BAU reports.

This is not a favourable state of affairs either way. So at this this point the question is: How to repair the damage?  To restore the relationship to a healthy footing, we offer here a few tried and tested remedies - the fruit of many years' experience working with both corporate and public sector customers and their service providers.   

Repairing the breach

To begin with, realise that if the relationship of trust has broken down it may take some while to repair.  If the issue was poor service or delivery did not live up to the contracted SLA, then establish a structured timetable whereby staged improvements will be made. This will need to be benchmarked by an independent advisor since the customer will need external confirmation.  If the issue was one of cost creep, then detailed explanations will need to be made.  This may be educational as often quite justifiable costs - such as the high cost of maintaining old systems - are not adequately understood by customers. And if they are not justifiable, then negotiation and pricing adjustments need to be made that are henceforth transparent.   If the relationship has broken down irretrievably then nothing will help.  The good news, however, is that in our experience most organisations will go to great lengths to give their suppliers another chance. This is either on the basis of: 'Better the devil you know', or because of the time it takes to get another service provider up to speed on a customer's business and operational methodologies. 

Re-establishing trust

 So, once the apple cart has been set back upon its feet, the task is to put measures in place that ensure the relationship never breaks down again.  To begin with, if it doesn't already exist implement a proven, industry standard set of project management and IT governance procedures that are based on Prince 2 or similar. This will reassure customers that their supplier is complying with an established set of recognised criteria and not simply making up the rules as they go along to suit their own best interests.  Secondly, for any project large or small, ensure there is a formal post project review to see what lessons can be learned - both ways.  This will give the customer a chance to air any niggles or disappointed expectations at the point so things can be rectified while they are fresh.

Thirdly - and this is most important - ensure there is an open and frequent dialogue between both parties.  This sounds obvious but communications often unravel because people don't have time, there is no one specifically designated or they simply put it off.  We always recommend that suppliers institute a proactive once a week call or meeting and quarterly reviews to assess productivity and discuss new efficiency measures and innovation initiatives. This gives them a chance not only to address any issues, but to demonstrate an understanding of their customer's business needs and to win new contracts.

Starting from strength

Notwithstanding all of these measures, projects will still go out of control and/or some services will perform poorly.   Ideally, then, it would be best if one could select suppliers and projects which from the outset have the best chance of succeeding and of being fairly priced and contracted -  all of which would go a long way to ensuring  customer/supplier relationships don't break down in the first place.  

One way the customer can guard against a failed project, poor performance or price creep is to bring in a sourcing specialist from the start who will compare similar projects done by a range of suppliers and advise on the most suitable options.  Or if the supplier has already been engaged, the specialist can compare the project plan and supporting material against best practice alternatives to see where it may go off course and what cost and time overruns may occur.  They can look at the scale and scope of a project against the resources assigned to it, the quality outcome expected, the time to completion and the process methodology to be used, including testing schedules, to see how realistic it is and the likelihood of success.  Having done all this, the sourcing specialist can then suggest efficiency, productivity and other improvements to the project, including how to avoid downstream problems before they happen. 

While all of this may sound obvious - or as the Americans would say: 'mother and apple pie' - it is surprising how often both customers and their service providers fall into the same traps. We know this is the case by the number of times we are called in to arbitrate and restart the dialogue which has broken down usually because of opposing expectations, as mentioned earlier.  Our job is to help both parties start their journey together on a clearly defined path, agreed on where they are going and how to get there, and with the best chance of continuing success."


Will Labour really be able to make businesses create an apprentice for every job done in UK by a non-EU citizen?

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If Labour is elected at the next election and follows through with an idea to change procurement rules to force businesses to create an apprentice for every job done by a migrant worker it could really shake the IT outsourcing sector.

Currently offshore IT suppliers rely heavily on bringing staff to the UK to work on customer projects. Despite these suppliers moving to non-linear business models they currently rely heavily on the lower cost of labour in their home countries to compete.

Immigration is a subject which always hits the headlines when political parties try and score points against one another. As it is party conference season they have been at it again.
Labour shadow immigration minister Chris Bryant said that Labour would introduce a rule that would force IT suppliers to create an apprenticeship for every UK job done by a non EU worker. He later confirmed this includes Intra Company Transfers (ICTs). This is the route used by offshore suppliers to bring workers to the UK. If a supplier has a UK operation they can use the uncapped ICT system.

A massive proportion of ICTs in the UK are IT workers and a massive proportion are from India working for Indian IT service providers.

This is what Bryant wrote in a blog on the Huffington Post: "[The rules] will require every firm hiring a migrant worker from outside the EU to offer an apprenticeship in return. We will use procurement rules to ensure that large firms given government contracts offer apprenticeships. This will apply to what's called 'Tier 2' workers, and we will consult on whether it should also apply to some intra-company transfers." He has since confirmed to Migration Watch, via Twitter, that it will include ICTs.

I really want to know what [people think of this. Is it feasible?

Will it mean increased prices from India?

Please fill in this poll and leave comments.


Could see the return of the £1 pom if offshoring to India continues as Australia seeks UK skills?

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I recently wrote an article about the high demand for UK IT professionals on Australia.
The Emigration Group said there is high-demand for IT professionals at all levels across Australian cities including Sydney, Melbourne and Brisbane.

It said the roles in highest demand are software engineers, systems analysts, programmers, computer network engineers, ICT sales reps, web developers, database administrators and network analysts.

Some of these jobs are the prime candidates to be offshored from the UK to countries like India and as a result of UK corporate offshoring there are many with these skills that are looking for work. In fact according to reports there are tens of thousands of unemployed IT professionals, many of which are recent graduates.

According to figures from the Higher Education Statistics Agency (HESA), IT graduates are the most likely to be unemployed six months after graduation.14% of computer science graduates are still unemployment after six months of graduation.

Here are HESA the 2010 figures for graduate unemployment:

Computer science 14%
Communications 13%
Education 5%
Veterinary Science 4%
Medicine & dentistry (approximately 0%)

I must admit Maths is not my strong point but even so I can see a solution to Australia's IT skills shortfall.

But I wonder why Australia doesn't offshore to countries like India?

Is Eastern Europe India's biggest threat for IT outsourcing?

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I received a report from Marrable Services all about weighing up whether to offshore to places like India or nearshore to regions such as Eastern Europe. The full report is below after a little backgrounder from me.

Being about I outsourcing this blog inevitable features lots of articles about offshoring to India. And why not? The sub-continent has become the default choice for businesses looking to get their IT delivered at a lower cost. When you mention offshoring India immediately springs to mind. Low cost labour and the use of English in India are the two main advantages and have made companies like Tata Consultancy Services, Infosys and Wipro important partners for big businesses in the UK. There are more advantages than this, such as the large skills pool, but there are also perceived problems.

India is becoming more expensive. It is a fast developing nation with a growing middle class. These people, many of which work for the IT firms, want better living standards and the higher wages needed to get them. This combined with the fact that the Indian economy is growing and requires more workers, means IT professionals move around a lot and as a result labour arbitrage is one of the fears of any CIO offshoring work to India.

There is also a feeling in many camps that the Indian firms only do what they are asked and will not move impr5ovise and innovate. Many people also believe that Indian suppliers are so determined to please that they will say they can do something even if they can't.

The Indian companies are very good at spotting market opportunities and growing business around that. Y2K is a great example. Indian companies stepped in and offer services to support big UK and US businesses that were preparing for Y2K. They have grown meteorically since. These companies are currently trying to reinvent themselves add move to non-linear business models as appose to  being reliant on low cost labour at fixed prices. And competition is tough.

I have written quite a bit about the outsourcing options in Eastern Europe. Countries in the former Soviet Union for instance have a good heritage of IT skills and experience and have the advantage of being cheaper than the UK, although not as cheap as India. They are also pretty close to the UK so travel between sites is easier and being in similar time zones makes real time collaboration easy. This for instance has led some to user Eastern European firms for agile software development.

Read the Marrable Services report here.

LOCATION MATTERS - Farshoring vs Nearshoring for IT Services

By Sean Murphy -- Marrable Services

"Background

This document aims to set out the major criteria to be taken into account when selecting an IT outsourcing destination, and highlights the pros and cons of various outsource providers with reference to location, size, cultural fit, company culture, and working practices.

Much of what is contained here is based on our experience and the experience of others who are heavily involved in IT outsourcing.   The opinions of other Senior Management have been included where individual company guidelines has allowed them to make comment. 

The paper also demonstrates how measurement of pre-determined project criteria can give the necessary analytics to measure continuous improvement and if necessary, how to compare one company against another.

The measures used are: utilisation, quality, velocity and customer satisfaction.

Choosing an Outsourcing Destination

"There's a lot more to it than just where are the cheap people?'" Rolf Jester - Gartner Vice President and Analyst

For many years India and Southern Asia have been the foremost outsourcing destinations for companies seeking to cut costs and access a plentiful talent pool.  Add to that the advantage of "round the clock" availability, English language skills and a willingness to please, and it is easy to see why India has become the focus of many large companies who have engaged supersized development houses or even set up their own off-shore facilities.

However, just like the Spanish Costas, these destinations are becoming a victim of their own success. Frantic competition for the best resources and consequently a huge labour turnover has led to communication and quality problems.  Increasingly, local industries such as retail, insurance and banking are offering more interesting jobs with better career prospects than much of what is on offer in IT and Business Process outsourcing.

Talented staff move around to grab the highest salaries and seek opportunities to work for the big multinationals in the hope that they will be eventually able to transfer overseas. This revolving door is illustrated in the graph below produced by Tata Consulting services and printed in The Economist Jan 2013.

 India and the Far East still lead the world for inexpensive, willing workers who can perform programming and other back office tasks to order, and this resource should be viewed as an excellent commodity which can be bought at the most reasonable price. However, companies must factor in a higher management cost, more exacting up front business analysis and not expect much more than an execution of an exact brief.  While less talented and experienced workers can complete a task to order, you will often need more of them, for more hours, and have a harder job maintaining quality and hitting delivery deadlines.

Suddenly a willingness to please translates into an unwillingness to admit to problems and delivery issues.  A "Yes Sir" culture does not allow for the necessary questioning and push back that must happen within a healthy "peer to peer" relationship and when managing complex and business critical projects.

More and more companies (News International, Bupa, Thomsons OnLine Benefits to name but a few) are finding that they can gain greater flexibility, mitigate risk and keep suppliers on their toes, by outsourcing to several different locations so that they access the right resource for the job in hand.  In addition there is a move towards using smaller boutique companies where a hand-picked team gains a deeper understanding of the business and takes a much more personal interest in delivering a quality product.

Quality Vs Quantity - the benefits of nearshoring to Eastern Europe

"Nearshoring" - the business of moving production, research and business processes to countries that are quite cheap and very close, rather than very cheap and far away"  Wikipedia 2013.

While Eastern Europe cannot begin to compete on cost or quantity, when ease of management, location and most importantly operational culture are factored in, this destination begins to look like a strong competitor.  The next section will look at 5 good reasons to nearshore to Eastern Europe, examining the talent pool, cultural similarities, time zones, low attrition rates and data protection.

1. The Talent Pool

The higher education institutions and comprehensive schools that formed the base of educational systems in former Soviet Union countries were mainly focused on engineering specialties.  This legacy, and the presence of strong science schools, has fueled the rapid increase in the number of companies providing IT outsourcing and software development in the CEE region. Educational systems in CEE countries are improving on their already strong focus on fundamental engineering education. In terms of the number of certified IT specialists, Romania is the leader in Europe, and sixth in the world, with density rates per 1,000 inhabitants greater than the US or Russia.  There are about 64,000 specialists in the IT sector. Approximately 5,000 of the 30,000 engineers graduating every year in Romania are trained in ICT.   Romania has won more Informatics and Math Olympiad medals than any other European nation and is 3rd globally after Russia and China.

The bottom line is this:

The availability of a highly educated workforce means that projects often need less bodies, less management input, and less on-boarding investment.

2. Cultural Similarities

Business culture is much closer to that of America and Western Europe and that isn't just a similar sense of humour and a fondness for a beer on a Friday evening! Eastern Europeans in general, are good at understanding the requirements beyond those set out in the project specification as well as being able to adapt quickly and flexibly to changing business needs.  Eastern Europeans will tell you how to do things better and will not be afraid to debate with a client on technical solutions. 

They take a more collaborative and less process-driven approach to projects, take ownership of deliverables with a high level of commitment to outcomes and the overall relationship with the client. Their preference will be to collaborate with the client on the project specification in order to ensure the right solution for the business need rather than performing to order.  This is important, not just because it improves the working relationship, but also because, over time an Eastern European team will need considerably less management hours from head office.

3. Time Zones

Eastern Europe covers a vast region, but most of the countries within it are just a couple of hours away from the UK in terms of time difference. Locality and time zone offers a distinct advantage when you take into account 6 hours of synergy in working hours during which home and away teams can collaborate, plus face to face meetings when necessary are a "low-cost" flight away.

4.  Low Attrition Rates

Contrary to the scaremongering in the press, most Eastern Europeans are family orientated and happy to stay at home as long as they have access to stable well paid employment.  When the work on offer is of an appropriate level, the approach is collaborative, and talent is recognized, workers feel a high sense of achievement which results in less movement between organisations.

5.  Data Protection

Eastern European countries within the EU are a good choice for work which requires adherence to the Data Protection Act. When personal data processing is involved it is important to choose a destination which has adopted the EU directive 3002/58/.

Romania - Our Destination of Choice

At the end of the day, the decision to locate to one country rather than another will be a subjective one, based on individual experience, the needs of a particular organisation and the skills and services they require.  To some extent a contract will be signed with an outsourcing company regardless of nationality:  the right cultural fit must be the most important consideration.

Our decision to partner with Qubiz, based in Oradea, was the result of years of experience working with different companies of all shapes and sizes in different destinations both near and far.

In 2012, Marrable Services established a bespoke development house in Cluj Napoca for Thomson's Online Benefits and it is this experience coupled with knowledge gained from consultation with other professionals both in the UK and US that leads us to recommend Romania amongst other CEE destinations.  Since then Marrable Services has developed a close working partnership with a Romanian software development house called Qubiz.

The Romanian Advantage

Impressive Language Skills

Although the official language is Romanian, a large part of the population is multilingual.  The Eastern European Translators Association classed Romanians as "the best foreign language speakers in Eastern Europe".  In Bucharest 75% of those aged under forty speak English as a second language.  If an accent is present, it is more often an American one therefore avoiding thick accents hindering comprehension.

A highly Educated Workforce

Romania has a total workforce of 9.35 million with an estimated 64,000 IT specialists, placing it sixth in the world for its number of certified IT specialists. Microsoft has recognized Romania's clear potential to become one of the leaders in information technology, and attribute this to the ability to excel by students, researchers and entrepreneurs in information technology.

Romania has a highly literate population, placed ninth globally. Nine percent of its population is university educated, and science and technology graduates are around 20 percent of total graduates annually. Romania produces around 8,000 computer science and electrical engineering graduates per year, many excelling in advanced research and development.

Access to Talent

Although Romania is growing in popularity as an outsourcing destination it has not reached the saturation point of other territories. This, coupled with the continued emphasis on engineering and technology in the education systems, should maintain a healthy talent pool for the foreseeable future.

Low Attrition Rates

Romanian people are family focused. There is a great climate and outside of the cities, in places such as Cluj Napoca and Oradea, a beautiful environment.  For professional workers there is a good standard of living and with a stable workflow being provided by overseas investment in IT outsourcing. Therefore there is no imperative for professional workers to seek economic migration.

Low Cost CEE Destination

Amongst Eastern European destinations, Romania ranks eighth on cost and the most inexpensive country within the EU states, other than Bulgaria.

Cultural Compatibility

It is in this area that we think Romania scores most highly.  From personal experience we have found Romania service providers often combine high levels of technical proficiency in leading-edge technologies with soft skills - communication, languages, flexibility, that are superior to that typically found in other outsourcing locations.

An intelligent and questioning approach is brought to each project, alongside a desire to innovate and add value.

Excellent Technical Infrastructure and Government Support

The growth of the IT industry is supported by both the IT ministry and the Agency for Foreign Investment (ARIS).  The government have adopted a set of measures to develop the IT industry including the consolidation of the national information infrastructure, accelerating the construction of an information society, education, training and nationwide IT projects.

The Global Competitive Index has given Romania a score of 4.2 for economic competitiveness and stability.   Similarly, its macroeconomic stability is also average at 4.5, comparable to the Philippines, Hungary, Poland, and India.

And Finally Why Qubiz?

So when we made the decision to expand Marrable Services to include our own software development services we knew that we needed to find a partner company that could fulfill the following criteria:

 

         Based in Romania, though preferably not in Bucharest

         Medium sized, with the potential for growth

         A one stop shop - the range of skills and experience to deal with any project or enterprise need

         A proven system of project metrics to monitor project performance

         Good range of IT Skills

         Senior Developers with 5 years+ experience

         Consultancy capability

         Technical Architects and Business Analysts on board

         Experienced in a good range of industries and sectors

         Ability to work from Business Need through to End Solution

         Solid infrastructure

         Agile development methods

         One team approach

         High employee retention

         High utilisation rates (90%+)

         Right approach to Knowledge Transfer and Innovation

 

On meeting Qubiz CEO and owner Marcel Anghel, we were immediately impressed by his acumen and business approach.  An affable person, he is a serial entrepreneur, and is now building his 3rd Software Development Company with the emphasis on quality, service and value.  He also has interests in property - office and leisure real estate - which means he can quickly expand his operations to accommodate larger projects.

With his latest company Qubiz he has more than 5 years experience in nearshoring for clients from the Netherlands, United Kingdom, Belgium, France and the USA operational in different industries, including: Healthcare, Social Care, Professional Services, Financial Services, Public Services, Education, Leisure and Hospitality, Manufacturing, Media, Logistics and Real Estate.  He has wide experience of building and supporting core products.

Qubiz is a company of 60+ people, based in Oradea, with another satellite office in Cluj Napoca, both centres have easy access to a high quality graduate pool.  Marcel is very focused on his staff and uses a range of incentives and a clear training and career path to ensure his employee retention, which is currently exceptional at more than 90%.

The company is fully experienced in Agile delivery with SCRUM as de-facto standard in the company.

Project Team Performance - Measurement and Analytics

The delivery of quality services is an important concern, and Qubiz therefore have Project Management and Technical Councils overseeing all operational processes striving for continuous improvement by a system of measurement, analytics, improvements and controls.

Each project is measured on the following factors:

Utilisation

This is a measure of the time each team member spends directly on the project, with an industry average acceptable rate of 80% and a high of 90 - 95%.

Balancing staff time to allow for training, knowledge transfer and mentoring must inevitably take time from project. Qubiz still maintains a 90%+ utilisation rate.

Quality

Although software development is complex and not a repetitive process like manufacturing, we believe quality can be measured by the number of bugs per iteration based on severity, priority, impact and amount of re-work. Less than two P1's and less than three P2's per quarter caused by software bugs are within an acceptable range - this is of course debatable depending on the service.

Velocity

Velocity is a capacity planning tool often used in agile software development. The velocity is calculated by counting the number of units of work completed in a certain interval, the length of which is determined at the start of the project.  Velocity can increase as a team gels together and begins to fully understand the project deliverables.  This ultimately means that the capacity of the team is increasing.  Team velocity is calculated at the beginning and end of each project iteration usually every 2-3 weeks.

Customer Satisfaction

Working in an agile environment with small product increments delivered every 2-3 weeks and with such a close working and collaborative relationship customer feedback is continuous.

To ensure long term client satisfaction both with the team and with the outcome of the project, every six months feedback is collected from the employees of the client that were involved in the project. The system measures three metrics: commitment, quality and communication both at team and individual level.

 The Proof of the Pudding

Perhaps one of the most important aspects of Qubiz's approach is their willingness to take on smaller projects in order to prove how they can offer better value. Beginning with a smaller project makes sense for all concerned as it gives the client an opportunity to test the supplier, and also the supplier an opportunity to really get to know and understand the business.

In February 2013 Thomsons OnLine Benefits decided to engage with Qubiz engineers to work on their core SaaS product. This decision was partly driven by a larger existing supplier being unwilling to take on a small project.  Happy with the way this was progressing they expanded the team working on the core SaaS product to include QA staff and to take on a small team to deliver a project on behalf of the M.O.D.  More information on this project and others, including project metrics, can be found in case."

Also read this article by Chris Piskorski at Poland based IT services firm PGS Software  about outsourcing to Eastern Europe: Close Enough, But Far Enough

Do UK unions welcome member transfers to growing companies such as Huawei?

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I was recently at a meeting with Huawei's head of managed services.

Leroy Blimegger, global head of managed services at Huawei, was telling me all about the company's growing UK managed services business. Its customers are the carriers. Here is an article I wrote.

There is quite a lot going on in the carrier space as companies try and get their networks in order to compete in today's market where consumers and businesses are very demanding.

People want wireless, mobile and fixed services and data traffic is now huge. Networks are more critical to the business customers of carriers than ever before so many are looking at outsourcing the support and management and if they already have will be looking at the options in the service provider space.

When a network managed service provider takes on a new customer there is always a major transfer of staff. Whether its in-house staff or staff from a previous supplier there is a significant HR overhead.

I write a lot about public and private sector workers transferring to suppliers. Although some have had good experiences, see this article about Capgemini's Bob Scott, there is often a very negative response to being transferred to a supplier..

But Blimegger said: "Unions are happier to transfer staff to Huawei because it is growing." This makes sense and as Huawei grows in the UK it will want a good experienced workforce. The company said it expects to increase its UK staff from 800 to about 1500 over the next year.

Dell shareholders decide whether to go private as Dell Services EMEA tells Investigating Outsourcing about its strategy

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As we all know Michael Dell wants to take the company private so he can re-focus the business away from selling PCs to services. With commoditisation, intense competition and falling margins the hardware business, particularly PCs, is a tough one.

Dell has been talking services for a few years now and this blog has written quite a bit about it (see links below.) But with Dell shareholders about to vote on Michael Dell's offer to take the company private now could be the eve of a services revolution at the company.

I met up with dell services' EMEA head, US head and the UK sales head yesterday to get a bit more details about the company' strategy in the UK. The first thing of interest is that the new EMEA head Eric Clark was with HP before joining. He was an EDS man, as was the US head Kevin Jones who was also at the meeting. I also met the UK sales director Tim Loake.
In the EMEA region Dell Services is in 31 countries. Globally services accounts for 55,000  of Dell's total staff of 130,000.

Since Dell acquired Perot systems in 2009 for $3.9bn I have been watching closely. It is difficult to take large hardware vendors seriously when getting into services after the debacle that was and still is HP's take-over of EDS.

But Dell sounds like it has a plan. Its approach will not be the traditional one where an outsourcer offers to do the same thing as the customer but for less money. Rather it is going to focus of transformational IT. I must admit many of my contacts are sceptical about Dell's chances but if Michael Dell and his investment partners get what they want there is surely a place for Dell at the top table. Dell's recruitment of former EDS executives will give its services arm the expertise it needs to provide services and it recently named former Wipro senior executive Suresh Vaswani as global head of Dell Services is a sign that it means business.

So Dell Services now utilizes many acquisitions blended into its traditional end user managed services. For example Perot Systems gives it IP in the healthcare and government sectors. This IP is important to Dell Services aim to win business in what it describes as the mid-sized public sector. This includes local government, NHS trusts and the police
It is interesting because Dell is a technology company rather than a services company by heritage it has IP that can support its transmormational services. For example through the acquisition of Make and Clerity it has tools to make it easier to modernize applications. Most big businesses are heavily dependent on mainframes so moving these to Linux is an area Dell Services is targeting, with the Make and Clerity tools used to do this.

But there is no point focusing on services if you are to get low margins through large deals to take on a customers' 'mess for less' as they say.

UK sales head Tim Loake told me that Dell Services will not necessarily rebid for tenders with existing customers if the customer does not want to continue transforming.
To show its diversity it has recently won deals with TUI Travel case study , the Scottish Fire service, the Singapore Stock Exchange and prto vides cloud services to community healthcare provider, Locala Community Partnerships.

See these posts I have written about Dell Services on this blog:

Can Dell learn from HP's mistakes in the IT services sector or will Ross Perot be the only winner?

Will a private Dell be able to make progress in IT services?

Dell Services is the new giant on the block but why chose it over HP, IBM etc?

Who will Dell buy in services push?

So what has Dell Services got?

Don't act like outsourcing services is something new, says Dell

Dell has bold claims about Perot tie up?


Why should a business outsource mobility projects?

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Mobile is becoming an increasingly important way of working as well as a critical channel to customers. Many businesses will lack the knowledge required to implement mobile technologies and processes that support them and outsourcing becomes an attractive option for many.

This is a guest blog from Rohit Sharma, global head of the mobility practice at IT services firm Virtusa, giving a list of reasons why businesses should outsource mobility work.

10 Benefits to Outsourcing Mobility Projects

By Rohit Sharma

"1. Mobility strategy - no application is an island
Organisations need a mobility strategy in place to prioritise their use of resources, identify areas of the enterprise that need to be mobilised, provide consistency and branding for mobile applications and  to re-use the platform, framework and assets that get built. An outside mobility partner can help accelerate the development of mobility strategy, thereby lowering total cost of ownership (TCO) for such programs down the line.

2. Building the mobility platform
Most organisations start mobility projects by creating a mobile-friendly version of their website. As a result, many lines of businesses, divisions and departments spend their time and resources building things that others in the organisation duplicate rather than re-using. An external vendor or partner has the expertise and experience to identify and build a mobility platform that will define the path of future reference in compliance with the overall mobility strategy.
 
3. Sharing knowledge, expertise and experience in key critical areas
A mobility partner has existing knowledge from past work with clients about the 'do's and don'ts' of implementing a program; this experience and knowledge can contribute significantly to the success of the program, ensuring that easily avoidable mistakes are not made.
 
4. Solutions, frameworks and methodologies
An outsourced partner may have solutions, frameworks and methodologies that can be used to accelerate the time it takes to develop a custom application or a mobility solution. Examples of solutions and frameworks in mobility include payment solutions, mobile wallet solutions, voice-based interaction frameworks, and QR/bar code and solutions.
 
5. Consistency in UX, visual design
In large organisations, many different lines of businesses come up with their own set of UX and visual designs for mobile apps; some of these applications will also end up in public app stores. Each of these may have a different look and feel, and different UI and visual design; causing inconsistency and confusion amongst app users. To solve these issues, an outsourced partner will help to build solutions using consistent UI and UX design guidelines, policies and governance. Back-end services are also re-engineered or a layer built on top of them for mobile enablement. Different departments often have no visibility on what others in the organisation are working on or have already built, resulting in duplication of effort and fragmentation of the service layer. A partner will help organise and consolidate services into a single unified web service gateway and manage the backend APIs by using API management tools.

6. Mobility governance
Mobility governance assures you have sound policies; including UX and visual design, architecture, BYOD policy, application distribution and management. Also, complying with all the desired diverse features and functions of such applications (like an enterprise app store) is very difficult for an in-house team who may not have the resources or expertise required. Outsourcing this function to a third party ensures that a thorough audit will be performed to make sure there is policy compliance.
 
7. Quality management, customer satisfaction, and production support of mobile apps
It makes sense to have an external team outside of design and development to test the application to ensure its quality; particularly if the application was built in-house. In fact, many successful mobile applications have been built by firms that outsourced development and quality management. In this case, competition drives efficiency.
 
8. Optimum utilisation of resources
Utilising all the mobility resources in-house is an issue as they may be over-stretched, and not have the time or resources to meet all the desired objectives. Outsourcing to an external partner eliminates the challenge of having a lack of qualified resources and reduced the burden on the in-house team.
 
9. Pooled knowledge and collaborative problem solving
External firms may have key partnerships with vendors and solution providers. This combined knowledge and collaboration will accelerate development of your mobility programs and projects while avoiding critical mistakes that are more easily made when 'going it alone'.
 
10. Cost
Lastly, the cost factor demonstrates why outsourcing may be a good option. Mobility resources are not cheap. If they are over-utilised, the organisation runs the risk of attrition or decline of productivity. If you hire more people to satisfy current demands and requirements, those resources may then be under-utilised further down the road. It can be more effective then, to have a small, skilled core set of people in-house while outsourcing extra projects or the major portion of the work to a trusted partner."

Offshoring decimating European corporate IT skills base

Karl Flinders | No Comments
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I wrote an article last week about some research written by the Hackett Group about how a combination of factors including offshoring IT jobs to low cost regions is decimating the European IT skills base.

The report said that the largest companies in Europe will have reduced the number of in-house IT jobs by 770,000, that's half, between 2002 and 2017.

The report said that while offshoring work is the major contributor to the decline it is also being impacted by the automation of business processes through software and the recession.

Here is the article I wrote.

The article does have some advice for IT professionals about "new opportunities presenting themselves."

"Staff that can develop the knowledge-centric skills that companies need to support their shift to global business services, and their overall globalisation goals, will find themselves in great demand," said the report.

"The need for transactional staff is decreasing dramatically, while the demand for knowledge-centric staff is increasing. [There is] a critical IT talent shortage, most clearly for knowledge-centric staff with the skills to help enable global business operations."

I am very interested in hearing from IT professionals that have lost their jobs to offshore workers or fear they will. I would like to know what they have done since in terms of learning new skills or what they plan to do. I am sure many are leaving the IT sector.

A report out today from O2 says Britain needs an extra 750,000 digitally skilled workers by 2017.

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