How Outsourcing Service Providers Enable Business Growth through IT Infrastructure Transformation | Article
Wipro Voice: A conversation with Deepak Jain, Senior Vice President and Global Head, Technology Infrastructure Services, and Member, Wipro Council for Industry Research
According to Deepak Jain, President and Global Head, Technology Infrastructure Services, now is the time enterprises that want to remain competitive should consider IT infrastructure transformation.
Why now? “The CIO/CTO organizations have realized that after a phase of over-abundance, there is a need to get to a state of equilibrium,” says Jain. Also, he says “future trends and technologies, including the disruptive trends like cloud computing, will require organizations to seriously look at consolidation, standardization, and rationalization.”
His advice: “organizations must become ready to avoid high transition/migration costs as these trends mature.”
At the same time, the cost take-out initiative that companies started in 2008-09 continues. The first tranche of savings came from outsourcing service provider discounts. However, Jain believes that is not enough “to get a sustainable cost advantage. For that, transformation is essential.” He says further cost reductions “will be extremely difficult without it.”
That’s why he predicts “end users will not be bothered about the technology they use. Instead, they will be more focused on the functionality the technology delivers. The economic environment will move customers from being buyers of technology and building on capacity to looking at capacity-on-demand and utility models,” he says.
Moving to the cloud
One of the “disruptive future trends” is cloud computing. “Large and small enterprises alike must have a robust plan for embarking on a journey to create a private cloud,” says Jain. Enterprises must:
- Conduct a thorough analysis of process and applications for security, latency, load variability, availability, and interdependencies
- Map the interdependencies to the infrastructure layer
- Build a heat map where they map the process and app to as-is, internal private cloud, hosted private cloud, and public cloud
The next key step to building a private cloud is to look at return on investment (ROI) or the total cost of ownership. Then, Jain says, it comes down to implementation, which must have a robust design that includes:
- Metering and charge-back
A key aspect is to take care of integration challenges and leverage the existing investments in the design stage. “Following those five steps will ensure that customers have a smooth journey into the cloud,” says Jain.
Transforming IT requires change in four areas
Jain says enterprises need to look at IT Infrastructure transformation through four broad areas:
“Customers are increasingly looking to achieve business and IT alignment, more meaningful reporting, better coordination between various departments, and a reduction of the overheads associated with managing multiple vendors,” Jain observes.
He says Wipro’s experience with customers across industries “proves that consolidation is a big lever for cost savings.” As IT assets increase, so does IT infrastructure complexity, creating significant management problems. In addition, datacenter energy consumption skyrockets, especially when energy prices rise.
Therefore, the consolidation approach should focus on consolidation of:
- IT operations, such as a central monitoring and command center, IT service desk, and knowledge database
- IT Infrastructure, like reducing the number of datacenters and computer rooms
- IT procurement. Jain believes procurement for global organizations gives them the scale to negotiate and manage hardware and software spend better
- Services through a shared model for service desks and a factory model for application packaging
“Simplification is an important lever for controlling costs,” notes Jain. “Over time, many customers have added complexity to their IT environments like disparate applications, operating systems, technologies, processes, or tools used.
Jain recommends outsourcing buyers make one-time investments to standardize the IT estate and look at ROI over five to seven years.
Application and infrastructure rationalization is another key driver for cost reduction, according to Jain. For example, the best way for Wipro to achieve excellence for one global customer was application rationalization. Wipro identified parameters to rank each application and then used them to determine the appropriate action. The parameters included business value, IT architecture fit, efficiency of application, agility of application, risk of managing application, complexity, and resistance to change in the application. This enabled the customer to reduce the number of applications. The result: significantly reduced maintenance costs and increased uptime, according to Jain.
Jain says outsourcing buyers need to virtualize both the datacenter and end user experience. The datacenter virtualization consolidates the servers and storage across the enterprise. This leads to lower support costs and easier administration without sacrificing computer power and storage capacity.
On the desktop side, virtualization (VDI) leads to better control, lower costs, and increased ease of desktop management and refresh. “VDI provides centralized management of all an enterprise’s desktops, thereby controlling the applications installed and used. In addition, this technology deployment is easier and faster, resulting in cost reduction and hassle-free desktop management,” says Jain.
The Wipro executive believes companies that complete an IT transformation “will be quick in making the best use of on-demand computing and managing the flexibility of infrastructure costs based on business cycles.”
The benefits of using a service provider for IT infrastructure transformation
Jain says companies benefit by using an outsourcing service provider for their IT transformation because suppliers can:
- Better manage cost and risk: Outsourcing allows buyers to do the job with the least possible risk and at the most optimized cost through their service provider’s global delivery model. “We have ‘hindsight experience’ of delivering these services for close to three decades,” says Jain.
- Support business innovation: A service provider understand its customers’ current and future needs. “We drive innovation in our solution,” says Jain.
Scale more effectively: Service providers do not resell products on a stand-alone basis. They analyze their customers’ current needs and the impact of their ever-changing business environment. “That helps us provide the most optimized solution for today’s challenges while keeping scalability in mind for future growth,” says Jain.
Reduce architectural complexity: Outsourcing service providers simplify IT through application rationalization and infrastructure consolidation. “IT becomes easily manageable and more meaningful to their business,” points out Jain.
- Increase the value of revenue-generating services: Service providers help their clients increase their touch points with their customers, reduce their time to market, and help them deliver more efficient services to their customers. “We help our customers become more agile and competitive in the marketplace,” says Jain.
- Enhanced end-user experience: Today service providers measure their performance through the eyes of the business user that experiences their services. It is no longer enough to keep the servers and network up 99.99 percent of the time. “Today what really matters is that the end user who is trying to complete a transaction through an application is able to do it in the specified time. We are able to control the performance and deliver enhanced end-user experience by monitoring the performance across each layer of the chain,” notes Jain.
The 21st century virtual corporation
Jain says Wipro is promoting a concept called “21st Century Virtual Corporation.” Essentially it means organizations globally should have:
- A detailed look at core and non-core processes
- Lean process optimization to drive sustainable productivity improvement
- Optimization of technology to enable innovation
- Extended execution leveraging “partners” versus contractors in a whole new way
“Our goal is to make IT more meaningful and impactful for our customers. We are able to influence the way they do business in the present and the future by advising them on where their next wave of investment should be and which business processes they need to streamline to be more competitive,” Jain explains. In addition, Wipro provides industry knowledge on how technology innovation is impacting their industries.
Jain says Wipro offers IT Infrastructure services that are more aligned to business needs because of its “deep understanding of business process, application, and infrastructure layers. This makes our approach more holistic,” says Jain. Like many Indian IT companies, Wipro is focused on remote infrastructure management and cost arbitrage. “But we also focus on improving the business key performance indicators (KPIs) – for example, how IT can create faster inventory turns, reduce cycle time for order to cash, or lower cost to serve for our clients’ end customers,” says Jain.
In order to produce this holistic approach, Wipro is:
- Creating better alignment within Wipro so the BPO and application arms can work closely. This helps the service provider provide true integrated IT service delivery
- Increasing its datacenter footprint across the world to be a true end-to-end player and also provide cloud-based services
- Investing in tools and automation to enable it to provide meaningful reports to its customers. The reports not only capture the performance of IT parameters but also provide insights into how a particular down-time impacts the business process
- Aligning its processes to be efficient and business friendly
- Training employees on how their actions/inactions impact customer business
Wipro, which has been offering IT Infrastructure services to its customers for over 25 years, currently has nine datacenters and 17 global command centers, which include14 security operations centers. Its 16,000 associates provide end-to-end IT outsourcing solutions from design to implementation, managed services, DC outsourcing including technology transformation, and audits to continually improve the performance of IT systems.
Wipro set up the Council for Industry Research, comprised of domain and technology experts from the organization, to address the needs of customers. It specifically looks at innovative strategies that will help them gain competitive advantage in the market. The Council in collaboration with leading academic institutions and industry bodies studies market trends to equip organizations with insights that facilitate their IT and business strategies. For more information on the Research Council, visit www.wipro.com/industryresearch or email [email protected].