Consultant Tom Young has been mulling over the good, the bad and all the ugliness of outsourcing contracts for 13 years, eight of them with the IT advisory firm TPI, where he is managing director of the CIO services and infrastructure group. Before that, he was a financial director at AT&T Labs.
“The people side of [outsourcing] is a tough, tough business,” Young said. This was at the tail end of a long interview for a piece I was doing on the danger signs of outsourcing contracts. Young was a wealth of useful information on that subject, and now we were talking shop about cutting jobs.
Young has seen his share of hatchet jobs. “I’ve been through this many times,” he said. At one company, where he was dispatched to cut IT costs, the employees called him and his partner “the Bobs,” after the two consultants in the 1999 cult film “Office Space” who were brought in to fire employees. (He had the modesty not to compare himself with the George Clooney character in “Up in the Air.”)
But Young said he “sleeps at night” because he’s convinced that the corporate IT guy is better off working for the very outsourcing provider that displaced him. His argument is that the IT professional working in a corporate IT organization is judged by his ability, of course, but limited by the opportunities to move up the value chain. In Young’s view, those opportunities typically pale beside the potential for career advancement at the big provider firms.
And unlike a corporate environment where you might be locked into a salary, “the more valuable you are to the provider, the more you make,” Young said. And he knows, because he’s kept in touch with people who have made the transition. “Nobody likes to be told, you’re not working here anymore,” he said, “but most people, except the slackers, will be better off.”
This sounds plausible, but didn’t I read not that long ago about IBM shipping U.S. jobs off to India?
When the audience at VMworld 2008 was asked if anyone had virtualized hundreds of desktops, I saw only one person raise his hand.
This year, anecdotally, VMware said at its partner show that the majority of its customers are evaluating, testing or rolling out its virtual desktop infrastructure (VDI) product.
Last month, Citrix Systems said that 1,000 new customers bought its desktop virtualization technology in Q4 2009, with several customers buying more than 10,000 seats.
In addition, a very large food manufacturer plans to virtualize 10,000 desktops this year, according to a system integrator I spoke with who had interviewed a job applicant working on the project.
There aren’t many CIOs putting themselves out there as desktop virtualization pioneers on a large scale, however. There are risks involved, after all: The technology is not mature, the ROI is questionable, new strategies have to be developed to account for the capacity needs of a virtual infrastructure, and software companies are still trying to figure out how to support their applications in a virtual environment.
Yet companies are moving forward with desktop virtualization. Independent Bank Corp., out of Iona, Mich., for example, has 1,000 virtual desktops as part of its disaster recovery strategy.
Disaster recovery was not named as a top driver for desktop virtualization in an informal survey conducted by Forrester Research analyst Mark Bowker. What did top the list? Reduced capital expenses associated with traditional desktops, simplified application upgrades and deployments, and reduced operational expenses tied to supporting client devices.
Let us know what is moving desktop virtualization forward — or holding it back — at your company. Email email@example.com.
The New York Times caught my eye today with this piece on whether the Windows 7 phone will be better than the iPhone for the enterprise. The BlackBerry is still the undisputed leader and the iPhone isn’t doing too shabby, but as the article points out:
We really have not seen any bona fide use of mobile collaboration tools as of yet across any device. People are using smartphones to check messages and use applications. The applications they do use are services like Twitter.
Also in the Times, a primer on traveling smart – with your technology. Most of this you’ve probably heard before, but it never hurts to review.
Come back here and share your thoughts on these stories, as well as the most recent content from SearchCIO.com:
Desktop, server virtualization help CIO fix disaster recovery plans — A combination of desktop and server virtualization is helping one bank CIO sync up disaster recovery between the backup data center and production site.
Proving the value of a business continuity plan (before disaster hits) — It’s the bane of business continuity experts: proving the value of business continuity management — before the incident occurs. Are KRIs and KPIs the answer?
CIO and IT salaries: Do you know what you should be paid in 2010? — CIO and IT salaries and IT job security and optimism all took a hit in this economic recession. Review our latest IT salaries stories and find out if you’re being paid enough in 2010.
It’s been a week of mea culpas. Following Google’s admission that it didn’t handle the launch of Google Buzz very well, on Thursday WordPress, a leading provider of blogging platforms to individuals and businesses alike, experienced an outage of approximately 110 minutes. The WordPress problems affected 10.2 million blogs, depriving those bloggers of about 5.5 million page views.
According to the official WordPress blog (which I assume was also unavailable during the downtime), the problems were likely the result of an “unscheduled change to a core router by one of our data center providers [that] messed up our network in a way we haven’t experienced before, and it broke the site.” Worse, the outage broke all of the company’s mechanisms for failover in San Antonio and Chicago.
I’ll be interested to hear about WordPress’ stopgap solutions in the case of blog failure. In the meantime, I’m left to ponder — and point out to our readers — that having a disaster recovery and business continuity plan isn’t necessary only for such catastrophes as hurricanes — or a massive data breach that leaves you scrambling to explain to irate customers what went wrong (I gather that WordPress did an admirable job updating users via Twitter during the outage). But how do you prove this to the business so you can get the resources you need? Consider piggybacking disaster recovery efforts on other projects or mapping availability risk.
The WordPress problems also underscore the importance of properly vetting your providers, whose data center outage could negatively affect your business and its customers. For more information about assessing potential sourcing partners, check out our FAQ on getting started with IT outsourcing.
Ahh, the irony! Organizations that have been through some kind of a disaster certainly understand the value of business continuity plans. But for most everybody else?
“When you talk about having a plan that could cost $20,000, $50,000 or $100,000, and might sit on a shelf and gather dust, for most business leaders, it’s ‘Excuse me, I have a business to run,’” said Paul Kirvan, a business continuity consultant based in New Jersey.
I heard a lot of variations on that attitude in my reporting this week for a story on mapping key risk indicators and key performance indicators in order to prove the value of business continuity (BC) programs. BC plans are a tough sell and not only because of those business leaders who’d rather spend money on making money.
The field is young — only about 35 years old, Kirvan told me. And the tools of the trade are not all that sophisticated. Quantifying the impact of a business-disrupting event that hasn’t happened, in order to craft a sound plan for getting back to business, is a soft science.
So soft, in fact, that Ramon Krikken, an analyst with Burton Group, has found that anecdotes about the bad things that have happened to other companies — good, old-fashioned horror stories — continue to be among the more powerful tools continuity specialists possess for convincing upper management that business continuity plans hold value.
In the United States there’s another element at play that makes it hard to get funding for BC — what Kirvan calls the “cultural dimension.”
Business continuity is viewed differently in the U.K. and other European countries from the way it is here, said Kirvan, who has worked extensively in the United Kingdom and is also a board member of the Business Continuity Institute. Of course, Great Britain is the source of arguably the industry’s most accepted business continuity standard, BS 25999. But it’s not just a matter of standards or certification, he said.
“The culture over [in the UK] tends to be one of anticipating potential problems,” he said. Business continuity is taken seriously, he said, perhaps because of issues with the IRA over the years and more recently, the 2007 terrorist bombings.
“Our culture, by contrast, with the pioneer spirit, that can-do, ‘We can handle anything, just throw it at us’ attitude, doesn’t take that view,” Kirvan said. American businesses are focused on the present and tend to believe the future will always be brighter.
“The typical reaction I have seen over the years from American businesses is that, ‘Well, we have never had a major issue, why should we worry about it? We’ll deal with it when it occurs,’” he said.
What about at your company?
Many large companies try to maintain hot sites that are in lockstep with the production environment, but this disaster recovery plan isn’t always realistic.
Configurations drift, or IT staff simply don’t have the time — or the budget — to mirror every aspect of their production environment. That’s where virtualization comes in.
Applications that may not have made it on the mission-critical DR list can now be put on a shared piece of hardware: a virtual server in the data center or hot site. The costs of maintaining hardware for both mission-critical and not-so-critical applications can drop considerably in this scenario.
The other day, Nelson Ruest, a principal with consulting firm Resolutions Enterprises Ltd., in Victoria, British Columbia, was telling me that one of his enterprise clients is projecting 60% to 70% savings, per year, across its infrastructure for disaster recovery. The company moved from mirroring the production environment — taking up three floors to do so in its backup data center — to using less floor space and hardware with a virtualized DR plan. It replaced many physical servers with virtual servers in its production environment as well.
Independent Bank, out of Iona, Mich., saved $1 million in hardware by replacing underutilized hardware with virtual servers, as part of a desktop-to-data-center virtualization DR strategy.
The shift to virtual desktops and servers allowed the bank to eliminate configuration drift between its hot site and production environment as well, according to its CIO, Pete Graves.
Still, enterprises are hesitant to use virtual disaster recovery for mission-critical applications, and are definitely not throwing out tape backups any time soon, according to John Humphreys, senior director of product marketing for the virtualization and management division of Citrix Systems Inc.
Humphreys is seeing the spread of virtualization for DR take the same path that the technology did on the server front: around the edges of the enterprise, starting with non-mission-critical applications that haven’t made it into the “critical” DR budget.
Others believe that virtualization DR will continue to evolve as server virtualization does. As the staff at SearchServerVirtualization.com point out in an article on predictions for 2010, there is still the potential for one virtual server to take down hundreds of other virtual machines with it.
So, it would seem that enterprises are testing out and moving forward with virtualization disaster recovery, but with a note of caution.
Tell us what your disaster recovery plans are and if virtualization will be part of them. Email firstname.lastname@example.org.
Why, yes, I am working on President’s Day — are you? When I logged on this morning after a mostly-offline weekend, I discovered that people are still buzzing about privacy issues related to Google Buzz. Google has issued a mea culpa, and says it is replacing the “auto-follow” feature (which, in turn, revealed the people whom you email most frequently using Gmail) with an “auto-suggest” feature that lets you pick your followers yourself. And, with that news, my personal foray into Google Buzz will begin….
So, as you Gmailers set up your latest social-networking venture, take a few minutes to peek at the latest stories from SearchCIO.com:
New IT management framework focuses on business value — Enterprises such as Chevron and Merck are working together to shape an emerging IT-management best practices framework. Could this work in your organization?
IT outsourcing strategy FAQ: Outsourcing and offshoring — An IT outsourcing strategy is crucial to enterprises looking to cut costs and globalize operations during a recession. In this guide, learn how to get started with IT outsourcing, and feel free to let us know if there are other IT outsourcing questions you would like to see addressed in this format.
Implementing Lean methodologies promotes IT, business agility — Implementing Lean methodologies helps IT organizations eliminate wasteful processes and promote IT and business agility, our CIO columnist says. Read more about Niel Nickolaisen’s approach to implementing Lean here.
How to automate and improve business processes, Las Vegas style — Business process automation remains a high priority for CIOs. In this piece, Sin City’s CIO and inveterate business process improver shares his thought on what works.
A few weeks ago, over a delicious dinner of Thai food with my uncle visiting from the Palo Alto area, I went on and on about my job here at SearchCIO.com and about all the various social media platforms on which my work now relies, including Twitter, LinkedIn and, of course, this blog.
“You’d be very popular in Silicon Valley,” he said. “This qualifies as a very normal conversation where I live.”
As home to the Googleplex and the launch pad of the dot-com boom in the late 1990s, Silicon Valley has long been reputed as a sort of Mecca for technology-minded businessmen and -women and the innovative IT pros that support them — and the Silicon Valley economy has thrived on these industries. But this economic recession is causing some to wonder: How long will Silicon Valley tech companies remain the top dogs in IT?
In fact, Silicon Valley tech could be losing its edge, according to the 2010 Index of Silicon Valley report. The area lost 90,000 jobs from the second quarter of 2008 to the second quarter of 2009, and unemployment in Silicon Valley is higher than national levels, even worse than in 2005, when technology companies were still recovering from the dot-com bust of the early 2000s, reports The New York Times.
When these Silicon Valley tech companies do hire, they usually employ some brand of IT outsourcing, whether domestic or offshore. As we have reported on SearchCIO.com, companies are looking to run as lean as possible in 2010, with the aim of boosting profits while keeping expenditures relatively stable.
Although I haven’t heard of any heir apparent to Silicon Valley, I do wonder what will happen if the region doesn’t see a turnaround soon. There are fears that a prolonged downturn in Silicon Valley could cause a real brain drain. Already there is evidence that immigration to the region has declined, and questions about whether up-and-coming tech enthusiasts will be willing to pay inflated real estate prices — especially if their salaries aren’t keeping up and layoffs loom as venture capital financing sinks.
The story’s final quote, from Judy Estrin, former CTO of Cisco Systems Inc., was perhaps the most telling:
“Silicon Valley is both a barometer of the rest of the country and a spark for the rest of the country, and if we don’t protect that innovation culture here, it’s going to be hard to sustain an innovation culture in the country.”
I’ll be keeping an eye on the Silicon Valley economy’s continued struggles not only via Thai food fests with my uncle, but thanks to contact with our CIO readers as well. To be sure, these are troubling times for IT, even at the industry’s epicenter.
Ten minutes after filing a story on the virtues of an enterprise project management office, I got a call from a CIO I’d gotten to know over the years informing me that he had been fired. On a Friday afternoon. No explanations given, except that his position was being eliminated. The company in question is a well-known brand name. From what I heard, 2010 promises to be as challenging for this company as 2009, if not more so. IT is viewed as cost center; costs had to be cut. The powers that be went after the biggest salary.
One of the hallmarks of this CIO’s five-year tenure was his setting up a project management office (PMO), with the laudable aim of bringing order, transparency and business participation to IT projects. Given his starting point — IT run amok — it was a hard slog. By the time I profiled his work, however, a formal process — rather than the squeaky wheel — determined which IT projects got done and when.
I don’t know why the CIO got axed (not sure he does either), but his situation got me thinking about whether there is a dark side to PMOs.
If a CIO goes to the trouble of embedding IT in the business so that IT is no longer the mysterious dark art many business people see it as, is he engineering himself out of a job?
“Of course you are,” was the immediate response of the first employed CIO I asked, the head of IT for a big city government. But that is as it should be, he said. As cloud computing becomes the norm, a CIO’s main job will be to plot strategy and manage the various vendors. “There is no reason we should be building any of this stuff.”
His gloss on the matter? “The PMO does one thing very well, and it depends on your organization whether that is detrimental or positive: It exposes you. Everybody who has anything to do with the strategy of the company is in it. That means there are reports and documents, failures and recasts of projects, costs analyses. The thing about transparency is that it can either be a boon or a bust for you.”
Sure, there are many IT professionals out there who are happy to just have a job; but as we move into 2010 and enterprises begin to dust off delayed projects, is your IT staff motivated enough to stay?
I ask because I just read the Dice Report for February, which shows that corporate HR and technology leaders are clearly out of sync when it comes to IT staff motivation.
When asked about the biggest blockade to motivating their IT staff, the No. 1 answer from HR was, “None, our technology team is motivated.”
Tech leaders polled in the same survey said salary freezes and smaller raises were the biggest impediments to IT staff motivation.
I’m not hearing much about pay raises yet from IT folks. In fact, our IT salary and career survey for 2009 showed that salaries decreased from 2008 to 2009, but 458 of the 952 IT executives and managers we surveyed do expect a pay raise of about 4.7% this year.
Where does this leave CIOs? If companies aren’t acknowledging pay raises as a key motivator, what else can they do to raise the mood in their IT departments?
Training and defining a career path for your IT staff come to mind. Your IT staff needs to keep pace with an ever-changing landscape; and the cost of training could be justified as not only a motivational tool, but ultimately as a revenue generator for the business.
In the same vein, our CIO columnist Niel Nickolaisen points to the importance of providing IT staff with meaningful work when salary increases are not an option.
So, if salary increases and possibly training are out of the budget for now, what are you doing to motivate your staff? Let me know at email@example.com