Offshore workers are often at a disadvantage when providing services for U.S.-based companies. Sure – you can find a tech person in India who can code java without any detailed knowledge of your business. However, for other outsourced services, such as customer support or software development, the more knowledge your offshore workers have about your business, the better service they can deliver and the more productive they can be.

“How can they participate and anticipate, if they don’t know about our business?” said Cornelia Pool, CIO of San Jose, Calif.-based Covad Communications, a national provider of national provider of integrated voice and data communications. Pool, who outsources the company’s software development efforts to India, makes extra efforts to ensure her offshore workers are treated like company employees.

At the beginning of the outsourcing relationship, she involves team members from both the offshore group and U.S.-based team to review the project goals and determine the best ways to communicate on a regular basis – ways that are convenient for both groups. Regular communication regarding not only project deliverables, but also the company’s message and goals, are key to the success of working together.

Pool also looks for any opportunity for someone to go and visit her team in India or bring one of the offshore workers to the U.S. This allows the offshore workers to learn more about the company and feel more connected to the goals of the business.

Offshore workers who feel like they’re part of a team and understand the goals of the business are also more likely to stick around. That’s an important factor for companies offshoring to places like India, where employee attrition has been an issue over the past few years.

An investment in business knowledge management helps make offshore workers feel “part of the team.” However, this also brings up cultural issues at some companies. For instance, at Covad Communications, the U.S. team had gotten in the habit of saying, “Someone offshore worked on it; that’s why it went wrong.” Pool made specific efforts to make her U.S. team understand that their vendors are partners in the success of the company.

At your organization, how important is business knowledge management to your offshore efforts? Are you comfortable sharing the ins and outs of your business with offshore workers? Or are you more hesitant to offer your company’s intellectual property with offshore workers who might or might not be working for your team in six months or a year?

At the 2009 HP Software Universe conference this week, I came across an attendee who stressed just that. Introducing himself as a “turnaround CIO” (who turns around failing businesses), this particular gentleman had a lot to say about the IT culture.

“It can be really difficult to get a data center manager, for example, to tell you exactly what he’s doing and when he’s doing it,” he said. “They turn to you like you have three heads — ‘I’m doing my job, what else would I be doing?’”

The more you can account for, the better off you’ll be. Because, as I was told, “If you don’t know what Joe is doing down in the data center, how do you measure Joe’s value?” Applications for resource allocation, time management, application management, project management can help, as can all of those functions rolled up in a PPM software package. And midmarket IT executives are taking full advantage of them. One CIO I spoke to used PPM software to survive a $1.5 million-dollar budget cut by prioritizing and keeping track of projects. Another CIO avoided layoffs with his PPM tool by leveraging the added transparency to more efficiently allocate staff.

But there’s always the question of whether an organization needs specific tools if it has the processes in place. In other words, if I have a process by which I prioritize and manage IT projects, do I need PPM software? I’d say you don’t technically need it, but having it could really optimize your efficiency.

If a project and portfolio management tool can provide a look into scheduled projects, prioritization queues, resource allocation and even some budgeting insights automatically, it’s much more efficient to use than having employees use various applications that someone then has to compile (or not) for a unified view. Especially if, as is so common today, you have a lot of projects and a lean staff.

Isn’t what cloud providers offer pretty cookie cutter? Translate that as, “They might not support the particular platforms and configurations I have.”

What about licensing? Just the other day, someone at a business intelligence show said it wasn’t clear how database licensing would be handled. Would he license the database, or would the cloud computing provider?

Which led to a question many people have: If I host an application, such as a business intelligence application with a cloud provider, it would have to connect to my data sources. Wouldn’t that be a security risk?

How will that impact compliance with regulations?

And the most popular concern: Why would I want to expose my data sources like that?

The IT side of the house always questions how their SLAs will be impacted if they go with a cloud computing provider. If some kind of outage happens, and the outage that happened at Amazon the other day answers that big what-if question about reliability and latency, who then is responsible for my SLA? Or will it take more traditional providers like Verizon, potentially more focused on reliability, to ease these concerns.

On the flip side, people are pretty excited about cloud computing as a means to test applications, particularly smaller companies with minimal IT staff or server room for testing a new application or service.

That conversation goes more like this: “Oh, cloud computing would have been great when the nursing department came to me and asked if they could test out a new application and we had to turn them down because we had no room on our servers.”

Potential cost savings on the infrastructure and being able to pay as they go are also appealing to small and midsized companies, yet, they often wonder just how much the cost savings really are over time.

What are your hopes for cloud computing? If you plan to tap the cloud how are you making a business case for it?

And if you have answers to these recurring questions, or concerns of your own I would be happy to hear them, too.

Let me know what you think; email: Christina Torode, Senior News Writer

The company of 15, which recently launched WatchDox, a document and permissions product, decided to utilize Amazon’s Elastic Compute cloud infrastructure (EC2) rather than to invest time and money in a new data center.

“For a startup just launching, we get huge data center capabilities,” said Confidela CEO and co-founder Moti Rafalin. “It’s one of the benefits of this era.”

Previously, a small startup company like Confidela would need to invest tens of thousands of dollars into a data center. Now, Confidela and other small businesses can take advantage of the scalability and “buy as you grow” option available with public clouds like Amazon’s – a natural way to grow and progress over time.

With multiple data centers in very geographic locations, tested reliability and enhanced security, Amazon’s cloud computing model is allowing Confidela to turn its startup dreams into reality and bring new innovation into the market.

Another potential benefit of using Amazon’s EC2 for startups or growing companies is its new initiative that allows users to reserve capacity in advance.  What this means is that customers only have to pay once to reserve capacity they expect to use in one- or three-year terms.  But they are still charged for only the capacity they consume. For a growing company or companies that have predictable computing needs, this is another good option that Amazon’s cloud computing infrastructure offers.

So for SMBs looking to explore new options and offerings, a public cloud may be a speedy and less expensive place to start.

For a story I did this week on a Houston-based nonprofit moving from tape backup to an online data backup and recovery service, I asked analysts to give me some sense of the enthusiasm out there on the degree to which companies are using outside providers to manage their data protection services.

The resistance to using outside providers for data protection services has fallen from near 70% a few years ago to 32% now, according to Gartner analyst Adam Couture.

Burton Group analyst Gene Ruth told me there are a number of “enterprise-ready” online backup and data protection service providers out there who are growing and are particularly suited for midmarket or small companies that may not have the staff or capital to handle automated data backup and storage and disaster recovery facilities. They include the IBM/Arsenal Digital solution used by the Houston nonprofit profiled in my story, as well as EVault, AmeriVault and EMC’s Mozy service.

As with any newish technology, however, there are lots of questions that don’t yet have standard answers. Let’s go through some of them.

The first concerns security. Will your company’s top secrets, for example, be commingled with competitors’? Despite encryption, will your provider be able to see your data and what are the safeguards that prevent them from doing something with that data? What is their disaster security plan? Sure, you don’t have one, but what happens if they are hit by an earthquake or hurricane? And can their disaster recovery plan be certified and audited? Many companies require an auditable disaster recovery plan for their regulatory compliance.

A second set of questions falls under the “oops” clause. What happens, says Burton Group’s Ruth, if you forget to or can’t pay your storage bill on time?

“Is the service provider going to delete the data? Hold it for you? There’s a lot of SLA work that has to be done once the data moves out of your own data center,” Ruth cautions.

Finally, what if you want a divorce from the outside provider managing your data protection services?

“What if you decide you don’t like your vendor anymore? How do you migrate between one vendor and another? That is very difficult, and it is just really starting to be addressed by the industry,” Ruth said.

Some suggestions

1. This may seem obvious, but get everything in writing. When you ask these questions, don’t take the verbal assurance, put it in the written contract.
2. Imagine worst-case scenarios. It takes a peculiar bent of mind to always think what the worst thing is that could happen, but trust me, sooner or later the worst does happen.
3. The best way not to make mistakes is to talk to a pioneer. If you consult with someone who has done it before you, they will save you a lot of grief.

“You look at all the businesses that didn’t survive the recession – some of them were in a bad market segment, OK, but some of them just couldn’t scale down fast enough,” said Clay Richardson, an analyst at Forrester Research Inc. “Look at GM, for example. That’s really the GM issue — they couldn’t scale down fast enough.”

Although a BPM strategy and scalability might seem like minor factors among the financial obstacles GM is facing, the expansive company has been unable to respond quickly enough to decreases in demand — GM has lost about $88 billion since 2005 — and as a result, was forced to file for bankruptcy protection.

As more and more businesses suffer the same fate (Chrysler, Circuit City, Linens ’n Things) how helpful can a BPM strategy be for companies in a rocky economic climate?

“I think BPM is becoming important for sustainability,” Richardson said. “Looking at downscaling from a sustainability standpoint, we have to have control over our processes so we will be ready when things turn around.”

But not everyone understands sustainability and how a BPM strategy can have a positive affect on it. According to a recent report from the BPM Forum, “more than 53% of companies don’t have or don’t know if they have a corporate sustainability agenda in place. And lack of awareness of business benefits was identified as the top challenge to environmental sustainability.”

So what can midmarket companies do to achieve the business and sustainability benefits of a BPM strategy?

Transparency, process standardization and a company-wide understanding and appreciation for the processes keeping the organization moving steadily along are important. The more business processes you are aware of and attuned to, the easier it will be to recognize even a minor change in “business as usual.” This improved way of doing things can result in quicker reaction times, efficient restructuring and (hopefully) bankruptcy avoidance.

The backstory: Hamilton Beach was facing a mandatory upgrade of Lotus Notes that would have required not only the expense of the software upgrade, but also additional hardware and considerable staff effort. Hodge realized he could save about $500,000 in capital and operating costs over five years, and another $400,000 in labor if he went with the enterprise edition of Gmail.

In a year when his capital budget request was cut 60%, saving a million bucks seemed like a great idea, despite some trepidation on the part of his staff. He made the big switch the right way– gradually. He lined up a test group in the company’s Mexico City and China offices to try it first to work out the kinks, and he smartly waited until everything was working before the C-suite got it. People’s email would be maintained as @hamiltonbeach.com, which was important to the company.

So how did it go?

The good news is the move to Gmail came in ahead of schedule, on April 30, two months ahead of the June 30 deadline.

“Unheard of!,” Hodge crowed in an email, giving kudos to his hardworking staff.

The bad news is there were a couple of hiccups. For example, at least half the attachments in some parts of the company email did not get transferred in the move to Gmail. After running the email through the transition process two times, IT got most of them. The other wrinkle was people’s contacts lists — Hodge’s staff had to do the lists by hand mostly to get them over.

“Our best success was achieved when exporting contacts to a CSV format and importing them into Google — but they had to be done one by one,” Hodge reported.

His biggest headache, in retrospect?

“I would have to go with the repeatability/consistency of the automated migration tools. We knew up front that we were one of the ‘early adopters’ for migrating from Lotus Notes to Google. We were patient, but still frustrated,” Hodge said, but added this comes with the territory of being an early adopter.

Six Sigma process implementation has been mentioned a lot, especially together with Lean IT. Other trends in discussions have included how IT is changing, the introduction of millennials into the workforce, cloud computing, offshoring and Twitter.

I can’t say I’m too surprised by these points peppering almost every conversation — except for the latter. It seems every conversation I’ve had, regardless of who it’s with, has turned to Twitter at some point. CIOs, IT directors, performance managers, operational directors, analysts — everyone is talking about Twitter. But not many are actually using it. They’re just interested in it.

The event Twitter feed was, however, actively used by many event attendees. Examples of tweets include:

@jlnorwood: #FITF09 Forrester IT Forum day 2 mandate is clear: Embrace Millennial thinking, Web 2.0 tools; simplify; innovate or die.

@jkloren: Andrew Bartels: Future = smart computing + [software solutions to] optimize business results –> thru borderless collab, KM, CRM,etc #fitf09

@MatthewEGreen: Amazing - web 2 and social networking is in every presentation and questioning session yet they still call it fluff #fitf09

(For more on what is being discussed, check out Twitter. You can also follow the SearchCIO-Midmarket.com feed.)

A big emphasis has also been put on how IT executives should be adapting to stay relevant as the role of IT changes. Embracing innovation, especially in the downturn, was cited in this regard — not just to improve what’s already available in IT, but also changing it to fit the changing needs of customers. Tom Peck, CIO of Levi Strauss, expressed the importance of looking outside the box with innovation when he quoted Henry Ford: “If I had asked people what they wanted, they would have said faster horses.”

And of course, offshoring has been a big topic — where to go, geopolitical risks, exploring the benefits of China vs. India and how to make your outsourced partner fit into your company culture.

Up next: Cloud computing, which everyone is hungry for more information on.

I asked one midmarket CTO just that — what he uses to justify the existence of any of his legacy systems. His response? “If you are a CTO in the SMB world, you don’t need very organized thinking to detect differences in criticality among applications. As soon as something fails, you get to measure its importance very viscerally.”

TTYL to the APMs, huh?

In sorting through the legacy systems of his 25-year-old business, he has not found practices like application portfolio management (APM) necessary. Quite frankly, he has other things to do. In a large enterprise organization with hundreds or thousands of applications that need sorting and analyzing, portfolio management may prove very useful — necessary, even. But in the midmarket?

This CTO deals with mission-critical applications ranging in age from 5 to 10 years old every day. The systems were chosen and installed by non-IT professionals in the early days of the business. Most (if not all) had no understanding of the virtues of integration — making the application integration process a bit more difficult today.

So for now, it’s about coping with the systems — slowly introducing new applications that will eventually phase out the decrepit ones without a complete overnight overhaul. This includes adopting enterprise-serving resources like an intranet, automated workflows and knowledge bases and bending the legacy applications to fit them.

And when looking for the new applications, he has some for some very straightforward criteria: (1) they do the job and (2) they use architectures that are accessible to the midmarket IT shop.

So, yes, legacy systems probably linger in your IT department — and if you’re like this CTO, that’s OK. He’s not fumbling around with process acronyms to prioritize apps because he doesn’t need to. And at the end of the day, “integration and modernization take a back seat every day to the exigencies of serving our clients.”

Is there an acronym for that?

Challenger was in his hometown of Chicago last week, addressing an audience of risk managers, business continuity and compliance officers at the Gartner Risk Management and Compliance conference there. From a show of hands, it seems this audience enjoys a fair degree of job security, with not a single person admitting to be out of work. (About 70% had a colleague who had lost a job.) After Challenger got through calmly laying out what it takes to secure your chances of keeping a job in a recession economy, I can guarantee that same group must have been feeling a tad more nervous.

1. The boast of indispensability
For starters, you don’t ever want to be considered a routine employee; nor do you want a job that is considered routine because it is only a matter of time before that function is outsourced or folded into somebody else’s job. Most people have a good sense of how important their job is to the success of their companies. The challenge is conveying that message to the executives at the top of the corporate ladder.

“Regardless of where you fall, the first person you have to convince of that indispensability is the person directly ahead of you on the organizational chart. And the way to do that is by offering viable solutions to real-time problems, or, better yet, to problems not yet on the radar,” Challenger said.

2. Fly the company flag even when there’ s bad news.
Risk managers are often bearers of bad news, and so are CIOs. Challenger said he speaks to lots of managers and executives in technology who have lost their jobs who feel scapegoated for being the bearer of bad news: Servers will crash if this is done; our database will be exposed to outside threats if we do this.

“You are often in the position of saying no, and no is not the kind of word that upper management likes to hear,” he said. “You want to be the person waving the company flag.”

Sometimes when layoffs are mandatory, it is not the low performer who gets the ax but the person who creates problems for management. Find the right way to bring up those problems, while “flying the company flag,” Challenger advises, by figuring out how to achieve the same result without the same risk.

3. Solve problems and no one will notice you’re home on the weekends.
“A lot of people mistakenly believe that all it takes to save their jobs in downturns is working long hours and being politically astute, but really what it comes down to is being valued by your boss, and your boss’s boss, in case your boss loses his or her job.” That won’t be accomplished by politically maneuvering but by providing solutions to real-time problems. “And if you can do that between the hours of 9 to 5, then no one will notice you are home on the weekend.”

4. Think of it as back to the guild days (free agency).
Yes, you have to make yourself indispensable at work, but no job is safe. (71% of CEOs recently said they expect hiring to decline; 67% said they expect sales to decline in the next six months; plus, the across-the-board salary cuts being implemented now are “unprecedented,” Challenger said.)

You must think of yourself as a free agent. While companies don’t want to hear this, in a climate like this we are returning to a guild environment where your peers are more important to your career health, to finding you a path into the next job, than your bosses. Network, network, network and help others who have lost their jobs, so when your turn comes they might help you.

Challenger’s closing disclaimer: “You can adopt all the measures and actions I have spoken about and still lose your job.”

Get more tips in “10 ways to keep your IT job in this recession.”