Posts Tagged ‘IT’

De Beers selects HCL for IT infrastructure transformation engagement

October 31st, 2014

HCL Technologies, a leading global IT services provider, today announced that the company has signed an IT Infrastructure transformation contract with The De Beers Group of Companies, the world’s leading diamond business.Outsourcing56

Leveraging its Enterprise of Future (EoF) offering, HCL will deliver end-to-end IT infrastructure solutions including data centre operations, multi-lingual service desk, LAN management, security services, service management including tools, desk side support and project services to transform De Beers’ IT Infrastructure across the globe. HCL already manages the IT Infrastructure of Anglo American, the majority shareholder of De Beers and the current deal allows a tighter integration across the two companies with common technology platforms and IT service management.

Craig Charlton, Group CIO, De Beers Group said: “Where we have previously had several service providers in each local region, this agreement affords us more comprehensive management of our underlying IT environment and enables us to run a more industrialised infrastructure service that underpins our broader IT strategy.”
“This deal marks HCL’s continued expansion in emerging markets like South Africa and many locations across Africa, Latin America and Asia. It further strengthens HCL’s presence in the mining vertical,” said Ashish Gupta, Executive Vice President & Head – EMEA, HCL Technologies ISD. “This deal is also a reaffirmation of the work HCL has done over the last 18 months with Anglo American to move them from a Gen 1 outsourcing contract and significantly improve services while driving a relationship culture focussed on delivering work beyond the contract.”

The engagement involves supporting De Beers’ global presence in Botswana, Namibia, South Africa, the United Kingdom and elsewhere around the world with HCL taking responsibility for eight data centres across five regions. The scope of the work includes some extremely remote locations such as offshore diamond mining vessels along the Namibian coastline and Snap Lake mine in Canada, accessible only via ice roads in winter.

De Beers will benefit from reduction in operating costs, improved processes and SLA-driven services, integration with the Anglo American environment, and benefits of advanced IT frameworks and processes such as HCL’s EoF, Cloud-based Service Management tool – Service Now, a common platform for all service providers within the De Beers environment; migration to cloud-based e-mail service and Office 365.

HCL established its South African operation in 2009 and is a level-three BBBEE contributor. Through a highly targeted focus on specific business, the company has gone about establishing a foothold in the southern African marketplace and made significant inroads into leading South African and multi-national organisations.


Health care IT: When outsourcing makes sense

October 31st, 2014

Hiring managed IT services is a decision many executives at health care organizations regard as favorable, but there are times when doing so to satisfy a temporary or long-term need isn’t financially advantageous. Outsourcing55

A large part of what procurement management services do is scrutinize how investments in third-party vendors will play out in the long run. Thorough investigations into these entities’ previous customer relationships must be undertaken. By approaching outsourcing from this angle, those in the medical industry will develop clear perceptions regarding the following factors:

Which technology companies are known for falling back on their promises

Whether certain firms offer a diverse range of provisions on top of a flat or flexible rate

How successful previous clients were after hiring particular IT services businesses

Overall, a comprehensive financial breakdown of each vendor’s program will be provided to those who hire purchasing officers. That way, health care organizations can enter service-level agreements with a clear perception of what to expect.

Is outsourcing really that popular?

Apparently, professionals in the health care industry are deducing their institutions are better off relying on third parties than in-house departments. Nearshore Americas cited a study conducted by Everest Group, which discovered the global health care IT outsourcing market is increasing at a compound annual growth rate of 12 percent and will likely be worth $68 billion in 2020. A number of elements are influencing this activity, such as:

The consumerization of IT, which involves employees accessing company networks through personal devices and leveraging easy-to-use applications with out the workplaces’ consent.

The need for accuracy and transparency when presenting patients with finances pertaining to certain treatments and insurance plans.
New regulations are obligating medical organizations to become more IT-heavy, causing them to switch to electronic systems.

“Two significant forces are fundamentally altering health plan business models. First, the health care industry is grappling with the uncertainty of reform mandates such as the [Patient Protection and Affordable Care Act] and the transition to ICD-10,” said Everest Group VP Jimit Arora, as quoted by the source.

What to outsource, what to provide training for

There are some technologies and IT-related processes that in-house departments should handle, but there are others that must be carried out by third parties. Steven Heck, a contributor to InformationWeek, acknowledged two “obvious” areas in which health care enterprises should look for assistance:

Software development: It will likely take a long time for in-house staff members to learn everything there is to know about C++, Java or some other programming language. If software must be adjusted, customized or developed, rely on a proprietary manufacturer or a group that specializes in creating new systems. Assigning this task to system or database administrators will only make development more arduous than it needs to be.

Data centers and business continuity: Heck noted that a lot of resources are required to implement, maintain or expand data centers. Hiring a colocation provider to host data centers allows such facilities to receive the attention they require on a consistent basis, allowing in-house capital to be directed toward more constructive endeavors.
With outsourcing considered, it’s important health care professionals consider the benefits associated with training in-house IT employees in certain aspects of IT. Database and network administration are two fields that must be handled independently, as this enables departments to better architect systems based on changing business needs.

In addition, it’s advisable those in the medical industry resist the urge to outsource cybersecurity responsibilities. Heck maintained that consultation and third-party reviews are beneficial, but ensuring data and network protection is a task that should be undertaken holistically, by specialists who are familiar with the infrastructures.

If there are particular skill sets in-house IT professionals need to possess, enrolling them in instruction programs is the best course of action.


Ontario attacked for IT outsourcing

October 31st, 2014

Outsourcing can be a sticky issue, particularly when it involves government. Which explains why the Ontario NDP launched an attack this week on the Liberal government’s spending on IT consultants.5Outsourcing54

According to CBC, party finance critic Catherine Fife complained the province is spending $700 million a year on outside help.

The province has $130-million worth of fee-for-service deals with nearly 1,500 IT consultants, the CBC quoted her as saying, and another $570-million in contracts with large tech companies, on top of its own staff of 3,600 IT professionals.

“Many of these private IT contractors perform the same tasks as the IT staff currently employed directly by the government, except they cost two to three times more,” Fife, who represents Kitchener-Waterloo, told the legislature.

“Significantly reducing private outsourcing of IT could save this government $200-million. It’s almost like you are willfully wasting money.”

The CBC said Finance Minister Charles Sousa replied the province is trying to reduce its use of the private sector, but needs it “for short-term and non-reoccurring projects like a one-time contract to get new programs up and running for cyber security upgrades,” and for outside expertise.

“We’re living in the Internet age and Ontarians expect their government to be accessible digitally,” he was quoted as saying. “We have a strong record of reducing the use of consultants across the government” Sousa also said that since the Liberals were first elected in 2003, more than 1,500 IT consultant positions were converted to OPS staff jobs, resulting in ongoing savings of about $60 million a year.


How do you manage the risks of IT outsourcing?

October 30th, 2014

Charles Sturt University research student Andrew Mournehis has found a gap in the literature of IT risk management. Actually it’s more of a gaping hole. “The policies and practices real world organisations are implementing to manage the risk of outsourcing remains largely undocumented,” he says.

Outsourcing, Mournehis says, “can potentially come with a large number of inherent risks that threaten the prosperity of an organisation. These risks have been well documented in the literature yet little is understood about how organisations protect themselves when entering into outsourcing ventures.”

This is despite the huge popularity of outsourcing, especially for IT requirements. Outsourcing is the contracting out of a business function to another entity, the main motivation being to obtain benefits from the expertise and economies of scale of a specialist outsource service provider, to reduce costs and to increase efficiencies.

Mournehis aims to address the lack of understanding by surveying senior IT professionals to determine what impacts they believe outsourcing has on their organisation’s ability to safely manage its risk.

He is doing his research as part of CSU’s Doctor of Information Technology course. It’s offered only by distance education and is designed to give students maximum flexibility in their study schedule.

This is one of a number of research projects Mournehis has undertaken as part of the course. “I have enjoyed being able to execute my research on different topics each session which has allowed me to focus on multiple facets of business in IT,” he says.

Last year he completed a study on project management in the technology industry. “I concluded that common processes could be established that are compatible with all of the most regularly utilised project management methodologies, eliminating the need for an enterprise to commit to one particular methodology,” he says.

In CSU’s Doctor of Information Technology course students complete the coursework component in part-time mode and then can choose from full-time and part-time study options for the thesis component.

During the coursework component students develop a series of IT industry white papers then, for their final thesis, choose “a real world issue or innovation that delivers tangible benefits to the information technology industry.” To ensure industry relevance supervisory teams include an industry based adjunct supervisor who is an expert in the area the student is researching.

Students who do not want to go the whole hog, produce a thesis and earn a Doctorate of IT can still gain either a Graduate Certificate in Computing Research or a Master of Computing Research, thanks to the structure of the course. It provides exit points at which students can either take a break or leave the course altogether.

CSU says successful completion of the Doctor of IT course should prepare students for middle to senior level ICT roles such as chief information officer, chief information security officer, chief technology officer, development manager, enterprise architect, IT manager, IT strategist, IT policy managers and ICT consultant.


Councillor defends Enmax outsourcing

October 30th, 2014

City-owned utility Enmax needs to be able to compete on the same playing field as other corporations, even if that means outsourcing dozens of local jobs, said a city councillor Wednesday.Outsourcing51

Coun. Peter Demong — one of two councillors who sits on Enmax’s board of directors — told the Herald he understands why some Calgarians would be opposed to the idea of a taxpayer-owned company sending local jobs overseas. Enmax informed its employees last Friday that it will be outsourcing 38 back-end technology support jobs to Tata Consultancy Services (TCS), a massive multinational company headquartered in Mumbai, India.

But Demong said that as a wholly-owned subsidiary of the City of the Calgary, Enmax needs to have the ability to operate in the free market and generate profits.

“We can’t hamstring them by saying ‘You have to do this, you have to do that,’ ” Demong said. “We have to allow them the same freedom and ability to compete as any other competitor in that industry.”

TCS, with annual revenues of $13.4 billion and over 300,000 IT consultants working in 46 countries, is one of the world’s largest IT outsourcing firms. Enmax has said it is making the switch to improve efficiency and also to provide better data security for its customer service and billing operations.

Demong added TCS has much-needed expertise as Enmax looks to improve its technology applications.

“It’s very difficult to find that expertise in Canada or even North America,” he said. “There are very few corporations or companies that specialize in this kind of thing.”

The news of the outsourcing was met with dismay by some Enmax employees as well as the union that represents 17 of the affected workers.

“Good work gets you what? Your job sent offshore? There’s not a lot of loyalty there,” said CUPE Local 38 president Peter Marsden on Tuesday.

But an Enmax spokesperson said the majority of affected employees are being redeployed to other positions within the company, though a handful have chosen to take severance or retirement options. Enmax also emphasized that while the outsourced work will be done by TCS workers in both Canada and India, no “front-facing” positions are involved in the move. Customers who contact Enmax will still speak to a local customer service representative based in Calgary.

Coun. Brian Pincott, the second city councillor with a seat at Enmax’s board, said he was unaware of the outsourcing until contacted by the Herald this week. He said he doesn’t have a position yet, but will “undoubtedly” be seeking more information about the decision.

The outsourcing is expected to be complete by the end of November.



October 30th, 2014

Worstall on Wednesday HL Mencken once told us that in a democracy the electorate should get what they voted for – and good and hard too. So, on that basis, I present to you a piece on outsourcing, as requested by one Gordon 10.Outsourcing50

The commenter in question wrote:

What would be really nice is [an article] on the race to the bottom on labour outsourcing and how long we have until a global equilibrium of sorts is reached … where the incremental savings from outsourcing are not enough to pay for the cost and disruption of that outsourcing. Most companies in my industry are already on their 3rd or 4th offshoring country because the previous ones have become too expensive.

Well, there are two answers to this one and they are: around 2080 (2090 maybe) and never. And there are two flavours of that “never” answer too.

The thing is that we have got two very different kinds of outsourcing and it is never really entirely certain which type any specific example of the practice is.

The first is the one we usually think of, the bastard capitalists nipping off in the search of cheap labour and leaving their devoted domestic workforces starving in the gutters. That one has very definitely got to the third and fourth levels. Cheap plastic tat came from Japan in the ’50s, Hong Kong in the ’60s, Taiwan and South Korea in the ’70s and ’80s, China in the ’90s and now its migrating to places like Vietnam and Indonesia. What happens is that people sate their lust for cheap labour in a place until that labour’s not all that cheap any more and thus another move for that lifeblood of predatory capitalism is necessary.

On the other hand, making cheap plastic tat is a leg-up for the local economy. OK, that first generation of jobs is pretty shitty, but as we’ve seen in all of those nations, things do develop. People work out how to do things – how to run a factory, serve a customer, make more complex things – and as the value chain is climbed, that labour gets paid more and we move, over the decades, from poor country to thriving modern economy.

Of this first type of outsourcing, the end is presumably going to be when there’s no more really poor places where the plutocrats can go oppress people. Exactly when that’s going to be, well, I would like the King of Sweden to give me a gold medal one day and he would if I knew when this was going to happen. But we can have a good guess by using our old friends the IPCC. If you follow the link, you’ll see the economic models that provide the emissions numbers for everyone to run through their climate simulation software. They’re not perfect for our use here but they’re still a damn good look at how the global economy might develop in the remainder of this century.

‘Convergence’ – or how does your poor country grow
One model (A1 family) provided by the organisation tells us that if the 21st century is much like the 20th (although preferably without the wars, but similar economic growth in general, similar fertility patterns etc*) then we’re going to get most of the world up to decent living standards around 2080, 2090 or so.

This concept is called “convergence” and is based upon the idea that – absent really bad public policy – a poor country should be able to grow faster than a rich one. This is simply because the poor one is, by definition, nowhere near the technological frontier and can thus copy those that are, while the rich ones are the people doing the difficult work (and making investments) in trying to expand that frontier. We expect, in essence, to reverse The Great Divergence that was the Industrial Revolution, before which average living standards might have diverged by two or five times by locality, but by nothing like the 10 to 50 times that is global inequality today.

With those sorts of living standard (and by definition, wage) difference, the idea of plonking the factory 11,000 miles away to save a bit on the 10 per cent of the budget that is wages just isn’t going to be an attractive proposition – and so the plutocratic bloodsucking capitalist bastards aren’t going to do it.

It is worth noting that if globalisation doesn’t continue, currently, to seek out those lower labour costs, then the convergence might well not happen – meaning that there still will be places to go exploit poor people. So it’s a case of: exploit it now – so that it no longer exists to be exploited – or don’t exploit it now, leaving it to exist to be used in the future.

But that’s not the only thing going on here. A simple way of slicing up economic growth is to divide it into three different types: Malthusian, Promethean and Smithian. With Malthusian growth, that new barley baling machine means that there’s more food, resulting in more children surviving to have more children, and two generations later no one is any richer as a result of that advance in technology – there are just more people at the same old living standards. With Promethean growth, we use fossil fuels (and nuclear, renewables etc) instead of human and animal muscle power. The last one is the one we want here: Smithian. This refers to the division and specialisation of labour and trade in the resultant production.

Labour can be too finely divided, as both Adam Smith and Karl Marx pointed out: complete division into each worker doing just the one simplest task repetitively turns him into a dullard. Fortunately, we tend to fob that sort of work off onto machines these days and use humans to do what they’re good at: thinking. But while that division and specialisation can go wrong – as with the boredom of an assembly line – there’s also no obvious limit to the number of people we ought to be dividing and specialising with: and thus trading with. It’s obvious that we should split some work with people from outside our household, outside the village… but there’s no obvious point short of the entirety of humanity at which we should stop doing so.

We’ve talked here before about that glue factory in Japan that burned down – whereupon everyone realised that there was only one glue factory in the world making the stuff to stick DRAM together.

There was also a period of a few years where I was absolutely the only person at all supplying scandium into the global light bulb industry. Only two companies made the iodides for the halide bulbs, I was supplying both of them and thus the entire planet full of people buying interesting downlights for over the kitchen stove was dividing and specialising labour with that one individual: me**.

And this would continue along, even after convergence. We would still be dividing and specialising labour in this manner, still trading the resultant production, even after full convergence had been achieved. Lower labour costs in general aren’t the only reason we do this: we can still gain greater efficiency through the specialisation, even if wage levels in general are equal. After all, City lawyers and City accountants get about the same amount of money each but we still end up with better contracts if the lawyers write them and better accounts if the lawyers don’t, but let the accountants do so.

So, when is offshoring going to stop? In terms of the straight pursuit of cheap exploitable labour, it will be around and about when there’s no more cheap labour to exploit. At best, this is 65 to 70 years away as that’s how long it will take for the current pursuit of such labour to have given us convergence in labour costs. And if it never does manage that, we’ll also obviously never see the ends of the attempts at such exploitation.

However, even if we do manage that convergence, we’re still going to be continuing to offshore tasks just as a regular part of the standard division and specialisation of labour – even if that labour itself generally costs the same amount in different places. So I’m afraid it’s bad news: this other form of offshoring just isn’t ever going to end. ®

* That tomorrow is going to be much like today is often the most accurate economic forecast anyone can make.

**Running a global monopoly is actually less profitable than you might think it would be.


PwC, Consulting Giants Push Google Apps for Work

October 29th, 2014

PwC is the latest consulting giant to promote Google Apps for Work — the SaaS platform that competes with Microsoft Office 365. PwC will also support Google Cloud Platform, which competes with Microsoft Azure and Amazon Web Services. The PwC moves reinforce new cloud realities for corporate IT departments and the world of IT outsourcing.Outsourcing53

PwC, Accenture and many other consulting giants grew up recommending, deploying and supporting complex, on-premises IT environments for customers. But as large and midsize companies move some workloads to public clouds, consulting firms have been forced to evolve their service portfolios.

Today’s PwC-Google partnership reinforces that new reality. In a joint statement, the two companies said they will:

Help companies succeed by leveraging PwC’s business insights along with Google Apps.
Combine PwC’s analytics expertise with Google Cloud Platform to help customers optimize operations.

Help companies to drive innovation

Bigger Trend

In some ways, PwC is late to the Google Apps cloud game — particularly in the government and education markets, where scores of companies now run Google Apps for Work. Meanwhile, Microsoft claims roughly 70 percent of Fortune 500 companies are running some form of Office 365.

All that said, the next battleground is likely IaaS — where PwC and others will help customers move virtualized workloads to onto Google Cloud Platform. But PwC certainly isn’t alone.

For instance, Accenture and Microsoft created Avanade — an IT consulting firm focused on the software stack. More recently, Avanade has focused on Microsoft’s cloud stack.


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