IT Infrastructure Outsourcing & Transformation

since i am working with a leading IT outsourcing provider specializing in remote IT infrastructure management, i have had a chance to be part of many rfp’s and responses, yellow pads and mutual value discovery sessions with potential customers.

in the past few months, the word “transformation” has started creeping in the rfp’s and in these discussions. in my opinion, the word transformation means different things for different customers. there is no common agreement on what exactly is transformation either between these consultants who drive the outsourcing process or amongst the service providers responding to the requirements.

in the context of overall IT organization, defining transformation or transformation projects is tough as the it is also looked in the context of business- IT alignment. this is particularly a complex when the IT outsourcing is restricted only to infrastructure outsourcing.

if you look at the infrastructure layer in IT, its pretty much driven by strategy around:

  • enterprise applications (ERP, CRM, Payroll etc) – has the most significant impact on IT infrastructure layer
  • infrastructure utility applications (file & print, DHCP/DNS/WINS/Email etc)

in many of these rfp’s the customer enterprise application portfolio strategy is not stated. in almost all of these cases, even when asked explicitly, i found that most of the customers did not have a clear application strategy and dependancy on IT infrastructure chalked out before embarking on IT infrastructure outsourcing initiative. hence it becomes difficult for the service provider to be able to define transformation at the Infrastructure layer.

there are two definitions of transformation on the net have caught my fancy:-

  • Transformation design, a human-centered, interdisciplinary process that seeks to create desirable and sustainable changes in behavior and form – of individuals, systems and organizations – often for socially progressive ends. (wiki)
  • a: to change in composition or structure b: to change the outward form or appearance of c: to change in character or condition (http://www.merriam-webster.com/dictionary/transforming)
  • to me, transformation means, changing the form, appearance and structure. in my opinion, moving away from being a cost center to being a profit & loss center, enabling an enterprise to cut down costs on fixed assets (like property) and enabling same customer reach and service using e-channels (as in the case of amazon etc) can be looked upon as transformation initiatives.

    another point is to address where should the transformation be targetted? a viewpoint is that transformation initiatives should be targetted at an organizations end customers to have maximum value creation and ensuring everyone involved has single objective while engaging in a transformation initiative.

    typical response of service providers when asked about transformation in IT infrastructure outsourcing deals is as follows:-

    • data center consolidation (from y data centers to x, given x>y)
    • server consolidation using virtualization
    • streamlining IT infrastructure utility applications (reducing number of file & print servers etc)
    •  desktop virtualization (though the practicality needs to be explored further along with a TCO analysis)

    these in my opinion are not transformation but innovation.

    in some cases, i have also seen responses around topics like:-

    • Vista rollout (or new version of operating system)
    • email migration from 2003 to exchange 2007
    • rolling out of enterprise management tools

    again, these in my opinion are not transformation but can be called as service migration or version upgrades.

    i don’t think it is possible to identify transformation initiatives when looked only from the IT infrastructure layer. to derive a true transformational value, i believe, the consultants and customer teams driving the IT outsourcing initiatives should share their overall IT strategy in the early part of the initiative with the respondants.

    i would like to hear your experiences in defining transformation while working on an IT Infrastructure outsourcing engagements.

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