(i)Structure Creates Model to Chart IT Outsourcing Performance in Infrastructure

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In the realm of IT infrastructure outsourcing, the pursuit of peak outsourcing performance is a journey guided by experience and insights.

When you spend 14 years running other people’s servers, you notice trends. “Some things make a significant difference in both cost and performance,” points out Dave Leonard, chief technology officer (CTO) for (i)Structure, Inc., an IT infrastructure outsourcer headquartered in Broomfield, Colorado.

Leonard headed an (i)Structure team that has, in essence, codified the areas that really impact computer operations quality, from mainframes to iSeries servers to UNIX and Windows servers. The results are important, because computer operations is a crucial ingredient in the recipe for corporate success in today’s highly digitized world.

How does your IT organization stack up? Find out by taking (i)Structure’s easy-to-use test at www.i-structure.com/omm.

Six Areas That Make a Difference

The team formalized these trends in an ongoing assessment tool called the “Operations Maturity Model” (OMM). The outsourcer plans to use the tool to help current clients determine if they are maximizing their outsourcing efforts as well as to explain to prospective clients how outsourcing can specifically impact their computing environments.

They observed six areas where improvements can really impact operations quality and cost. They are:

1. Standardization of processes. Standardization allows the outsourcer, whose core business is infrastructure management, to invest in tested processes that allow the IT environment to remain stable even through technology changes.
2. Automation of processes. (i)Structure has been able to automate most processes and lower operating cost by allowing computers to monitor (and sometimes automatically fix) other computers. Today, engineers don’t have to stay glued to computer screens to monitor outsourcing performance to prevent and/or fix problems.
3. Standardization of hardware and software. (i)Structure’s goal is to have every customer on one version of a particular operating system; it migrates new customers to the chosen platform as soon as possible. Using a limited number of systems gives the outsourcer “a lot of leverage,” points out Leonard. This is particularly true when it comes to security, since the outsourcer only has to apply one patch.

   “Managing the velocity of change, especially in operating system software, is very important in reducing cost and controlling risk,” states Leonard, explaining (i)Structure’s approach toward operating system upgrades.

4. IT asset consolidation and sharing. “We are a huge proponent of sharing infrastructure across applications and customers,” says Leonard. At (i)Structure, customers share data centers, Internet connections, Ethernet and fiber channel switches, disk, tape, even firewalls.

   Sharing infrastructure benefits customers in many ways. Leonard says one customer found one megabit of Internet bandwidth was plenty, normally. But at Christmas it needed much more. By sharing bandwidth with all of (i)Structure’s customers, the outsourcer had enough bandwidth available to allow this customer to “burst” over its subscribed limit.

   The same situation applies for the Ethernet and fiber channel SAN switches, which (i)Structure uses. These high capability pieces of equipment are too expensive for most customers to purchase themselves. “A fairly small customer can come into our data center and take advantage of this very sophisticated infrastructure that they couldn’t afford themselves,” Leonard says.

   However, there are things the customers do not share. UNIX and Windows servers are not designed for sharing. In his opinion, this is a waste of an opportunity, because Leonard estimates the average utilization for these platforms doesn’t top 15 percent. The CTO says (i)Structure is working with the appropriate software vendors to allow better sharing of their applications. “Sharing would drive that utilization up much higher,” he predicts.

5. Skilled problem resolution. Leonard says his company’s core business is to run computers efficiently. At (i)Structure, infrastructure is a profit center, not a cost center. That difference allows the outsourcer to attract and train high caliber employees. “We have more skilled problem solvers,” he says matter-of-factly.
6. Quality of service. “‘Right-sizing’ the quality of the service to the business requirements of the application is important in driving quality up and cost down,” says Leonard. So is implementing service level agreements (SLAs) that accurately measure and report that quality.

Nine Benefits from these Changes

Customers who work on achieving improvements in these six areas can expect results. Results appear in nine areas which Leonard calls the “‘ilities”:

1. Profitability and cost reduction. To date, Leonard says (i)Structure has been able “to reduce computing cost over time with our customer base.” Critical to cost reduction is moving the customer to the outsourcer’s preferred operations model.
2. Reliability. This goes up, resulting in fewer and shorter outages/problems.
3. Scalability. Customers can grow or shrink their infrastructure as needed, without disruptions.
4. Burstability. The speed at which a customer can grow or cut its infrastructure needs improves.
5. Upgradeability. Customers benefit from constantly upgrading technology. No customer is stuck in an aging technology because it has two years to go on its outsourcing contract.
6. Predictability. Customers have a better idea how their systems will perform, and systems perform more consistently over a wider range of loads and conditions.
7. Visibility. Customers can see more of what’s happening.
8. Outsourcing Performance. Customers get more for their money, because they have access to a better infrastructure than they would by themselves.
9. Security. Computing becomes more secure because the operating systems are on one consistent platform. That allows the outsourcer to apply security more consistently.

How to Use the OMM Tool

Leonard says his team designed the OMM to help customers judge their progress. “It’s our way of communicating to our customers the benefits they could achieve if they applied the suggested improvements in those six areas,” says the (i)Structure CTO. “Customers can measure how they stack up and understand why we want them to migrate to a specific hardware/software version or platform.”

It’s also an educational tool for prospective customers. “They have to understand the need to outsource is more than economic,” he explains. In addition, they can quantify the benefits of outsourcing based on their current computing environment. “They can see they are getting a greater bang for their buck,” he notes.

Lessons from the Outsourcing Journal:

• (i)Structure has developed a tool called the Operations Maturity Model that helps customers evaluate their systems, demonstrating where they can make improvements to reduce cost and enhance outsourcing performance.
• There are six areas that can improve infrastructure outsourcing results. They include:
  1. Standardization of processes.
  2. Automation of those processes.
  3. Standardization of hardware and software.
  4. IT asset consolidation and sharing.
  5. Skilled problem resolution.
  6. Quality of service.

About the Author: Ben Trowbridge is an accomplished Outsourcing Consultant with extensive experience in outsourcing and managed services. As a former EY Partner and CEO of Alsbridge, he built successful practices in Transformational Outsourcing, Managed services provider, strategic sourcing, BPO, Cybersecurity Managed Services, and IT Outsourcing. Throughout his career, Ben has advised a broad range of clients on outsourcing and global business services strategy and transactions. As the current CEO of the Outsourcing Center, he provides invaluable insights and guidance to buyers and managed services executives. Contact him at [email protected].