All things are not equal. Never has that truth been more evident than in the challenges facing multinational corporations’ efforts to implement seamless network communications around the globe. The goal of providing and maintaining full capabilities to even the most remote production facility frequently slams into the reality of infrastructure inconsistencies across the company’s global footprint. At that point, many companies turn to outsourcers.
Three issues both drive international outsourcing and also challenges its success, according to Greg Jacobson, Executive Vice President, MCI Systemhouse. They are network telecommunications, the need for in-country field service, and the effectiveness with which individual outsourcers can achieve system integration.
“As multinational companies expand globally, one of the very first challenges they meet, in terms of Information Technology (IT) and infrastructure, is the network,” he said. “It is still very daunting to extend a lot of the capabilities we’ve come to take for granted in the corporate world, particularly in our home market where we can do things like use e-mail as a legitimate platform and use frame relay to implement IT networking. A lot of companies today are using fairly advanced networking capabilities as the underpinning of some of their newer computing platforms and, in particular, some of the newer applications that they’re installing.”
He noted that SAP, for example, is more of a challenge to install in other parts of the world than in North America or Europe. The difficulty in extending advanced telecommunications presents obstacles on several levels. It undermines consistency in such basic issues as how telephones are answered and files are sent from one location to another, interferes with the tasks of knowledge management and limits the seamless flow of the corporate culture.
As an example, Jacobson created a scenario where a company introduced a program in which sales people could fill out expense reports on their laptops, file the reports on the network and get paid in five days instead of two weeks.
“But guess what, because it’s a LAN-based application, it only works if you provide LAN or a remote LAN attachment,” he said. “Now you have this policy, and you have an office in Brazil. The only way they can access this server is through a dial-up connection. Because they don’t have the infrastructure, they’re exceptions to the expense report policy.”
Extending the infrastructure into remote offices is only the first step. Then comes the challenge of keeping the server up and running reliably. That creates the need for in-country field service. “Let’s say you have a standard office suite of 12 to 15 applications that you give every one of your knowledge workers,” said Jacobson. “You’ve just landed a major project to build a hydroelectric facility in a remote part of China. You’re going to deploy an original office of five people. Within a month, it’s going to be 50 people, and when the project is in full swing, you may have 500 people on site for five years.
“You would really like to provide your standard IT infrastructure to those people sitting in China, but who’s going to keep them up and running? Many, many people are looking to outsource that, because doing it country by country is very expensive and very inefficient.”
Those challenges — the extension of the network infrastructure to remote locations and the field service to maintain it — must be addressed if a company is to have access to all its intellectual resources and enjoy the other benefits of being global. Jacobson said multinationals need IT plans that can be implemented wherever they do business.
“If competitive advantage for you is going to come from your global capability,then the IT infrastructure is a very import factor in making that happen,” he said. “People are outsourcing network and field service because they’ve figured out that’s really the only way they can address them.”
Once a company has decided to outsource part or all of its IT functions, the next hurdle is choosing the outsourcer that can best meet its global needs. That means analyzing each outsourcer’s approach, country by country, to ensure that the company ends up with the connectivity they need to function as a truly global company. Service in remote areas of the world is becoming a point of differentiation among major outsourcers.
“The challenge that facing each of us, whether we’re Systemhouse, EDS or IBM, is to be able to sit down with a prospect, take the globe and walk through where we have either direct offices, joint ventures or alliances, as well as third party agreements for support,” said Jacobson. “How good a job we do mapping our customer’s global footprint against our own is emerging now as the competitive differentiator for large international outsourcing deals.”
Lessons from the Outsourcing Primer:
- Understand that extending network infrastructure into remote global locations can be difficult.
- Consider how field service will be provided for those locations.
- Choose an outsourcer whose global footprint matches your own.