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New blog location… March 15, 2013

Posted by Mark Hillary in Current Affairs, Government, Hardware, Internet, IT Services, Outsourcing, Software.
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Thank you for visiting the Thomas Eggar technology blog. We have moved the blog to our main website – please click here to be taken directly to the latest version of the blog!

Southamptons Itchen Bridge

 

Photo by Steve licensed under Creative Commons

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Forrester outlines top tech trends – from now till 2018 February 7, 2013

Posted by Mark Hillary in Current Affairs, Internet, IT Services, Outsourcing.
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As decision-makers get blindsided about how and when to use emerging technologies, Forrester analyst Bryan Hopkins recently provided some helpful insight into what’s next in his blog.

Grouped in four major blocks, he outlined the top 15 major trends in tech that will be shaking up business models over the next five years.

It is easy to fall into the crystal ball-gazing trap, especially when you are talking about what will happen in technology between now until 2018. But a clear thread can be identified across Hopkins’s predictions.

In the end user computing group, advanced collaboration and computing tools will continue to be of major importance to companies worldwide. This is crucial because of the increasingly dispersed nature of businesses and the war for skilled personnel – you need to get the right people to work effectively together and also retain as much as possible of their knowledge when they move on.

The sensors and remote computing technologies theme refers to the external, customer-facing side of technology. Here, the Promised Land is that of smart machines performing the collection and processing of data, then contextualising it to generate the nuggets of gold that can inform brands on what to offer to consumers, where and how.

But that information doesn’t just appear by magic. So tools that provide advanced analytics capability as outlined in the process data management topic outlined by Hopkins  – that is, digesting and making sense of structured and unstructured information quickly and cheaply – will be very useful to companies focusing on understanding their audience.

Finally, there needs to be a robust platform holding that glue of knowledge together. So, as described in the analyst’s infrastructure and application platforms topic, big data platforms to handle large volumes of data, elastic storage capability and everything-as-a-service will continue to be the talk of the town for the years to come. Are you ready?

Read Bryan Hopkins’s blog entry on emerging trends here.

Crystal Ball

 

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Time to stop outsourcing? August 30, 2012

Posted by Mark Hillary in Current Affairs, Outsourcing.
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Popular technology blog Horses for Sources has launched a survey asking whether they should stop using the word ‘outsourcing’ in their coverage of the industry.

Most involved in technology outsourcing have moved on from the old days of labour arbitrage or augmentation. Service providers don’t just pitch themselves as the cheapest any longer, they position themselves as the experts in whatever they do.

Clients commissioning work from the service providers know that they are buying in expert services, usually services they could not perform in-house.

But the political rhetoric has barely changed. As the US presidential election approaches, outsourcing is still considered a dirty word for politicians and a way to score a few cheap votes by patriotically insisting that they would ban it forever.

But these same politicians probably calculate their budgets using Microsoft Excel and broadcast information using Cisco services. They fail to see that any large technology company is already working with global resource and any company starting today will consider hiring suppliers from all over the world.

It’s not that outsourcing is about shipping work off to cheap economies; it is just that the Internet has created a global marketplace. If the marketplace is global then that can create both problems and opportunities back at home, but how come the politicians rarely focus on the opportunity of small niche companies being able to reach a bigger market?

So do you agree with HfS? Is it time the industry stopped using the term outsourcing and if so, what would be better?

Horse

 

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When is an outsourcing contract not a contract? July 23, 2012

Posted by Mark Hillary in Current Affairs, Government, IT Services, Outsourcing.
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The Olympic games is almost with us and as the sport has yet to being the media is trawling through every negative angle they can find. The latest is the failure of security firm G4S to supply enough guards on time – leading to the need for the games organising committee to use more police and army personnel than ever expected.

The Chief Executive of G4S has apologised profusely and admitted that the situation is a shambles – in his own words, but was his company really to blame?

When outsourcing goes wrong it is not always the supplier at fault. The London Organising Committee (LOCOG) for the games originally specified that 2,000 guards would be required. This is what G4S had always been planning for.

Only a couple of months ago this figure changed to around 10,000 guards – plus all the volunteers and other military personnel that were expected to also help. So the scope of the contract changed by at least 500% with a very short lead-time.

Nobody wants to explore this in too much detail right now – the games are upon us this week so the post-mortems will take place once it is all over, but it looks like a classic outsourcing dilemma. The client suddenly needs to ramp up and will offer an enormous bonus to the service provider, but if the provider felt any doubt about their ability to scale up so quickly then the honourable thing to do would have been to refuse the change in the scope of the contract.

All will be revealed once the games are over…

Wenlock

Phoot by Ken Jon Bro licensed under Creative Commons

 

In uncertain times, what companies want is certainty April 26, 2012

Posted by Mark Hillary in Current Affairs, Outsourcing.
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According to the Office for National Statistics (ONS), the UK is now officially in recession as the economy has contracted for the past two quarters. It is interesting to observe that many leading economists don’t believe the ONS data is correct, but these are the official numbers so we have to deal with what they present to the country.

Back when the present economic slowdown really began in 2007/08, many technology analysts predicted that a slowdown – or full recession – would be a good thing for the industry. If companies wanted to reduce outgoings they would look increasingly to offshore outsourcing as a way to achieve this.

But it never happened, and looking back it was quite obvious really. Any IT outsourcing programme has a lot of expense up front. Transition cost, training cost, consulting cost, auditing cost… there is a lot to budget for meaning that you have to commission a large piece of work, make sure it runs to plan and only once you get to the future business state can you hope to start making savings.

This meant that offshore outsourcing declined during the initial slowdown. It recovered and the market is growing again, but take a look around Europe right now. The UK is now in recession, Spain is about to go back into recession, the Euro currency lurches from one crisis to the next with the continuing reality that not all countries using the Euro now will be doing so at the end of this year.

The Dutch Prime Minister just resigned because his people refuse to adopt an austerity plan and the French are veering towards a new socialist president for similar reasons.

The level of political and economic uncertainty is so great that it would be foolish for any service supplier to still be selling the ‘reduce cost’ model of business. Now if they can start selling outsourcing based on a ‘we can tell you your costs for the next 5 years’ type model then in this present climate I expect there will be a lot more takers.

The last economic slowdown showed how unattractive the simplistic model of slash and burn offshoring really is. If we are heading into deeper economic uncertainty, that approach should not make a comeback.

Recession

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The future of the company is in a global market? February 7, 2012

Posted by Mark Hillary in Current Affairs, Government, IT Services, Outsourcing.
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When outsourcing, and particularly offshore outsourcing, became popular business strategies only a few academics stopped to ask how this might change the very nature of the company as we know it. Now online resource marketplaces are becoming common, things are going even further.

These marketplaces are very simple. If you need something done, you post the job online. Across the world, millions of individual contractors and small companies watch these job postings and bid for the work, creating a reverse auction, based on price and their track record of delivery.

Tools like oDesk.com, Elance, and guru.com are all offering this service – usually for about 10% of the contract value as an agency fee. I have heard more and more people recently in large established companies talking about getting some copywriting or marketing or blogging done by going to these marketplaces – it appears to be replacing the old concept of local freelancers.

Cost has always been the main driver for those seeking to outsource work across the globe, but the availability of talent and the ability to scale were never far behind. What has changed is that many more international locations now have the infrastructure, the people, and the stability of democratic governments. There are many places in the world where IT and IT-enabled services can be delivered and entire continents, such as Africa, are waking up to this fact.

And these markets are not only allowing access to the lowest possible cost, but they have also allowed contractors to earn far more than they could locally because they are pitching their prices higher than the local market. Think for a moment, if a company from New York needs a website prepared and a local firm will charge them $1000, but a developer in Bangladesh might expect $100 in his local market, the contractor in Bangladesh is likely to pitch $400 for the job.

Until recently, I heard this week from a contractor who writes blogs in Bangladesh. He was moaning that people from the Philippines – who can undercut everyone – are flooding the online marketplaces.

It seems price is still important, but more importantly, these networks look ready to stay and to become an integral part of the modern company – hiring and firing and creating virtual global teams at will.

oDesk t-shirts: all about the bling, G.
  Photo by Dave McClure licensed under Creative Commons

Is outsourcing coming of age? December 19, 2011

Posted by Mark Hillary in Current Affairs, IT Services, Outsourcing.
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As we head into 2012, it’s worth taking a moment to consider just how much the entire outsourcing market has changed. This is the year that the cloud really shifted from being an entirely separate concept to being intrinsically linked to the process of outsourcing.

A senior manager who made budget decisions always led the traditional market in services. It might be the CIO or the business line head – like the HR head for example – but it would always be a senior figure with a well-planned objective for the future state of the company.

This led to the traditional outsource, where an entire business process would be analysed, passed to the third party, and delivered by a service company – whether on site or remotely.

But ever since the growth of tools such as salesforce.com the model has been changing. Salesforce turned everything around by being a system that could be used over the web, with no need for any additional software, and paid for by user by the month… simple, clear, and without the need for big plans, vendor comparisons, or training programmes.

Salesforce is used by sales teams who buy it themselves on their own budget. They don’t ask a CIO to buy the system and then have maintenance teams install it.

So are cloud products like this really outsourcing? I believe so. If sales teams are trusting a third party with their information and using those tools as a part of what they do then it is just the same as if the CIO had outsourced CRM to a partner.

But it is a much more disparate world in which individual business line staff are making decisions about the tools they use to get the job done, making the job of those trying to control all of this much harder than before.

Outsourcing is not dead, it has just embraced the cloud and it now changing into something new.

wanted

Optimism for the future of sourcing November 23, 2011

Posted by Mark Hillary in IT Services, Outsourcing.
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There has been an air of optimism in the IT service provider community recently, quite at odds with what we all read in the press on a day-to-day basis. It seems that there is still a lot of work to be done in the international outsourcing community.

Partly, this is driven by the global nature of the market. Economies such as China and Brazil are becoming huge consumer cultures and growth there is creating a need downstream for more and more IT services – to support the retailers, logistics firms, and other industry sectors all experiencing strong growth.

But this optimism remains tempered by a sense of foreboding, that the IT services industry has to change if it is to grow and succeed in the long term. There is an emergence of some important new markets, being driven by what might be termed ‘mega-trends’ in society – trends that go beyond the geographic alone.

While some service firms can only hope for a recovery in retail or banking, it’s going to be these mega-trends that really shape the future of the industry.

First, the ageing population in developed ‘western’ societies. By the middle of this century it is estimated that fewer than half of all Germans will be economically active. The majority will be either elderly or children, neither contributing to government finances. So how can a developed country like Germany continue to expect economic growth at the same time as maintaining the existing social welfare standards – all with fewer people working and contributing to the economic welfare of the nation?

Second, sustainability is back on the agenda. European governments have been implementing a system of carbon reduction commitments that will force companies to audit and reduce their carbon use. This push from government will change corporate culture across the entire European region – and beyond.

Third, international terrorism is not going away just yet. We need better security systems that are smarter, and yet still affordable.

These three major trends are going to change the shape of IT services in future. But how many executives on the buy or sell side of the outsourcing equation have considered just how much their own marketplace might change this coming century?

Madrid 11 M

Managing IPR in a digital age August 22, 2011

Posted by Mark Hillary in IT Services, Outsourcing.
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So you have a dilemma.

You may well already use an outsourced or managed service environment and it all works well, but then the supplier calls and offers to start doing some extra parts of your supply chain. Moving up the value chain as the expression goes.

That’s great too, provided it’s a supplier you know and trust. Why not ask them to take on more work if you know you can trust them to deliver?

But the thing that often worries clients is how they can outsource higher-end work without losing control of their intellectual property.

It’s a dilemma, because the boundary of the organisation is constantly shifting, but where contracts are concerned, someone needs to take a decision so services can be defined. But when are the key parts of the relationship to check on if you are going to extend a process outsourcing relationship?

  • First, is to ensure you have all your IP protected anyway using tools such as trademarks or copyright. You need to have your own house in order first.
  • Second, is to review the contract with your supplier. Can you ensure that you retain IP rights even if the supplier creates value and possibly even invents new processes for you?
  • Third, be aware of your own limits. There is always a pragmatic limit about what can and can’t be protected, so make sure you have also considered the difference between what the law says and what you really can do in the event of a breach.
  • Fourth, review all practical security measures that can be taken  around the relationship, hand-offs, and the delivery site so that confidential IP cannot be removed from site.
  • Fifth, identify where the supplier may be working for your competition and so-called ‘Chinese walls’ need to be extremely strong.

In most cases, if you have a great supplier at one level, then they will be able to scale up to the next level. It is usually beneficial for the supplier (more business) as well as the client (more services provided by a trusted and already proven partner) so this should not be considered a dangerous strategy.

In fact, it’s going to be essential for most firms to turn to trusted partners more and more, just to achieve the kind of performance expected of a twenty-first century business.

Ensuring you can work with an ecosystem of partners whilst still protecting your valuable IP is all just a part of doing business in a globally connected environment.

What is Web 3.0? July 22, 2011

Posted by Mark Hillary in Internet, Outsourcing, Software.
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The Internet continues to evolve at a frenetic pace. Back in the nineties, having a website meant little more than a series of static pages that used hyper-links to allow the reader to click between pages.

Web 2.0 changed all that. Websites became based on dynamic data, so different readers might see different pages, based on their own profile. Your Facebook profile is a good example – endlessly changing whenever you update it or load new content such as photos. It became normal for readers to also become contributors.

Now the tech world is talking of Web 3.0, even as many in the enterprise are yet to fully take advantage of the dynamic information flow of Web 2.0.

But Web 3.0 is not really here just yet. It revolves around how information can be better linked through concepts such as the semantic web. In short, there will be a point at which the systems are publishing information automatically and tagging or linking the data to existing information. Like Web 2.0, but with the computers doing much of the publishing and linking for us.

The clear advantages of this are obvious. We are drowning in a sea of information at present. Just search Google for ‘John Smith’ and hundreds of millions of possible results come up. If your own name is ‘John Smith’ and the search system had some way of linking data that relates to the correct ‘John Smith’ then search suddenly becomes far more intelligent.

Given the amount of content now being created it is becoming essential for the systems to help connect the dots. For example, the video site YouTube gets 35 hours of new video uploaded by users every single minute. How can we make sense of this vast sea of data if it has no context?

The downside of relying on the technology is that machines make mistakes. Only time will tell how laws designed for a previous era might handle cases related to an automated system linking millions of pieces of data, where some of those links are erroneous and create a knock-on effect that invalidates other data.

It’s a problem we have yet to encounter, but this world is just around the corner not decades away.