Aug 31, 2011

General support

Help Desk
A help desk operation is where people respond to questions and problems
from employees. You can have a help desk with a narrow scope responding only
to systems and technology problems, or you can broaden it to include building
problems, equipment problems, and any other nonemergency request.
Should you staff a help desk with employees? Clearly, these positions are
junior level because almost all complex problems have to be referred to more
technical people. It takes time to establish a help desk function. Start with defining the scope of the help desk. You need to find the people to whom you will
refer calls. You will require time to build a database of frequently asked
questions (FAQs), and software to track calls must be obtained. Then you must
put the word out to employees that the help desk exists.
What are some of the risks of outsourcing the help desk? The basic concern is
that quality of service is maintained. Another risk is that the estimated workload
understates the actual workload by a substantial amount leading to increased cost.
Some suggestions for handling the help desk are as follows:
• Set up the help desk with internal employees first. This will provide you
with a better understanding of the workload. In this way, you avoid the
expensive setup costs of having a vendor establish the help desk.
• Implement a quality measurement program in which you follow up with
people who have requested help to determine the level of service.
• Ensure that you have a personnel replacement condition in the contract so
that if a contract person is not performing, there can be rapid replacement.
PC and General Computer Training
PC and general computer training include training in word processing,
spreadsheets, graphics, electronic mail, and basic database management systems.
In the early 1980s, companies conducted this training with internal staff. As that
decade came to a close, most of it was outsourced to companies or local univer-
sities. Now, some companies require software expertise. Many others offer
videotaped instructions, CD-ROM, or other training.
What mistakes do firms make in outsourcing training? One mistake is that they
outsource training in more specific and technical software to general firms who
just teach courses. This is part of a bigger mistake when a company wants to out-
source everything to one vendor, often resulting in average to poor levels of train-
ing. For example, some instructors stand up and read materials. People could
probably get more out of a manual. It is also very difficult to determine if the
training is successful. People evaluate a class at the end, but then they may or may
not use the material right away. Material not used for a long time is generally lost.
Application System and Other Training
There is a wide range of training that is possible. Examples lie in database
management systems, the internet, general management training, and so on.
Another area is the software application system if you purchase a software
package. For most of these topics, you would consider using outside help. Man-
agers often make mistakes in outsourcing this training. Following are some of
the pitfalls to avoid:
• The company specifies the training requirements only generally. The train-
ing that is delivered is not really suited to the company.
• The company fails to work with the training firm in the preparation and re-
view of materials.
• There is no formal review of the training after it is given.
• The expectations of the company and the attendees are not matched by
what is delivered by the vendor through a lack of forward planning.

Aug 30, 2011

NETWORK RELATED

Network Planning and Management
Network planning is important to the business. There is an ongoing role in
measuring the network, determining what steps to take to improve performance,
and planning for upgrades, replacement, and expansion. Unless an organization
is quite small, this role is often performed by internal staff. This role also over-
sees contract work in installation and testing. The role has been expanded to ex-
tranets and linking to the internet as well as handling internal networks. Growth
in internet use has made this position more significant.
Network Installation and Testing
You are not going to install and test a network every day. Network installation
and upgrades are done as discrete tasks. Installation requires specialized equip-
ment in terms of cabling tools, crimping tools, and so on, and network testing re-
quires special monitoring equipment. These functions are also generic and not
company specific, which make them suitable candidates for outsourcing.
Network Operation and Troubleshooting
With the increased reliability of networks, there is less of a need for internal
staff to be assigned to troubleshoot network problems. For large organizations, it
makes sense to have this function performed internally, allowing for identifica-
tion of the problem prior to contacting a vendor to do repairs. The effect is to
reduce overall cost and the mean time for repairs.

Aug 29, 2011

THE OUTSOURCER’S VIEW OF THE WORLD

What makes a firm enter outsourcing as a business? A firm decides to enter
outsourcing in a particular area because they believe they have expertise in that
area, possess excess capacity so that they can serve new or additional clients,
and obviously make money doing it. The long-term nature of the contract is also
an incentive, along with an almost virtual guarantee that unless they really screw
it up or the business changes, the client will remain with them How does an outsourcer make money? They have to do the work that you do
at lower cost, they have to provide added value, or achieve some combination of
these. Here are some specific steps taken by outsourcers:
• Achieve economies of scale by sharing resources (hardware, network, facilities, software, people).
• Provide smarter or lower-cost resources to do the work.
• Charge for add-on requests and services that were previously done internally and taken for granted.
• Use more modern or more capable tools and methods that increase effectiveness and efficiency.

Aug 28, 2011

Assess Outsourcing

INTRODUCTION
Outsourcing
occurs when a company contracts with a supplier or vendor to
provide specific services and support for multiple information technology (IT)
activities. Note that outsourcing typically refers to services and not purchased
products. Providing an ongoing service means that there is a need for both a
managerial and technical relationship between the supplier and the customer
firm. Another observation is that most outsourcing agreements cover several
years (up to 5– 10 years in some cases). Why this long? Because of the time it
takes to come up to speed and become efficient as well as the practical infeasi-
bility of switching suppliers quickly.
Outsourcing of information systems (IS) has been going on much longer than
you might imagine. It began in the 1960s with facilities management. Compa-
nies had no IT or IS organization and did not know what to do. Therefore, they
contracted with firms such as IBM, Computer Sciences Corporation, and others
to run their computer center. Firms such as these also provided programmers and
systems analysts on-site to do work on a time and materials basis.
Another example was the use of service bureaus. Companies who required
data processing but could not afford their own computers used service bureaus.
They brought their data to the service bureau who processed it and returned out-
put to the company.
A third example was external timesharing. Computers inside companies in
the late 1960s and early 1970s were batch processing machines. To get access to
online systems, you had to use a service bureau or timesharing firm. Charges
were based on usage. This was extremely expensive, but firms had little choice.
Outside timesharing for some firms ate up 10% of their IT budget.
As the 1980s progressed, companies eliminated outside timesharing and
service bureaus and expanded their internal IT organizations. The height of this
centralized model was probably from 1979 to 1982—just prior to the introduc-
tion of the personal computer (PC) into corporations. With the introduction and
spread of local area networks (LANS) and more PCs, IT groups started to
outsource basic training, hardware maintenance, and some support. In the late
1980s the use of software packages increased as their capabilities rose and the
underlying fourth-generation languages improved. Outsourcing of business
activities began in this decade.
The 1990s saw the continued rise of the use of packages (a form of outsourc-
ing) as well as expanded outsourcing of specific tasks and work. The use of con-
tractor and consultant resources expanded. For some firms, more than 40% of
the overall IT headcount consisted of contractors. The 1990s also experienced
major attempts at outsourcing all the IT activities to one or several companies.
Some of these failed miserably and the firms had to bring IT back into their
organizations. In other cases, the firms began to contract out more narrowly
defined activities. Companies also focused on core business activities and
increasingly outsourced business functions.
What do these observations show? First, there is a substantial body of experi-
ence going back to before the late 1950s in outsourcing. This should be used to
help you today. Second, several basic findings can be noted:
• Although outsourcing in IT may be worthwhile, outsourcing of other busi-
ness activities may yield more benefits due to the size and nature of the
work being performed. Mundane activities, such as shipping, telephone and
utilities, and so on, are often outsourced. Many banks outsource their teller
operations.
• It is valuable to develop a strategy and approach for outsourcing due to the
complexity and interrelationships among IT activities. It is also important
because of the requirement by vendors to have multiple-year agreements.

Aug 27, 2011

REDUCED SCHEDULE AND COST APPROACH

This chapter has defined a great deal of work. If you attempt to do it alone,
you will never finish. If you attempt to be too precise, you will fail. The first sug-
gestion is to involve people in the business, IT, and your current vendor staff to
help in the analysis. This needs to be a collaborative effort. If they participate,
then there is more likelihood that they will support the results and be committed
to the project.
A second recommendation to speed things up is to generate outlines and
structures for documents and presentations at the beginning of the project.
Then esh these out as you go. A related idea is to market the results in an infor-
mal way to managers as you go. This will reduce the time it will take later for
them to understand what you have done and subsequently the time to gain
approval.
EXAMPLES
Millenium Manufacturing ultimately selected to do their own development.
Their decision was based on the fact that even though the new process simplified
the current process, there were still unique features that could not be addressed
by any existing software package.
Secour Retailing selected a package but did not do the analysis of the first step.
They roughly estimated costs and benefits and gained management support. The
package was later acquired and then found to be lacking in key features. The
result was extensive customization.
Roberts Agency, the transportation agency, performed the steps and
concluded that they would have to do both development and package
acquisition. There was no package that could handle certain functions; however,
if those functions were excluded, there was a package with a close fit.
LESSONS LEARNED
• Concentrate on no more than five sample transactions in defining the new
process. The detailed analysis for all transactions will be performed later.
• Identify the shadow systems and workarounds early. Get recognition of
these from the business department. This will gain their support for the new
process. Give attention to these in presentations to illustrate the shortcomings of the current system.
• Obtain a list of people who can review what you have done early on. This
includes a business staff member who can review the process work you do and the benefits and an IT person who can review architecture, technical
approach, schedules, and costs.
SUMMARY
In this chapter, you defined the overall new process along with requirements
and benefits. You then proceeded to develop estimates for costs, schedules, and
project plans. None of this will be complete. However, these are essential to make
the decision on what direction to take.
This chapter has defined major steps that must be taken prior to plunging into
development or software acquisition. If necessary, you should spend more time
here because every additional hour will likely save much more time later. The
steps have been defined in a linear way. However, you should consider starting
these in parallel and then building the end products in parallel.
WHAT TO DO NEXT
• For a current project that is underway—either a package implementation
or development project —review what has been done and what was done to
address the steps in this chapter. You will find that the steps were probably
not carried out overall. What impact has this had in terms of the project?
What surprises have surfaced?
• Practice carrying out the steps on a very small process within your depart-
ment. Walk through each step to determine what could be done. Ask the
following questions:
1. What political barriers would you face if you really did the work?
2. What is the condition of the current process and technology? To what
extent do business and IT staff recognize this?

Aug 26, 2011

WHAT CAN GO WRONG?

From past projects, here is a list of things that can go wrong:
• The software package is selected before the new process is even defined.
This will likely be very expensive because there are so many unknowns.
The effort to define a new process and proceed with the steps in this chapter
may stretch out the time but only entail labor effort. These steps greatly
reduce the risk.
• Parties overpromise what they can deliver. IT may promise to do develop-
ment but lack resources. Business departments may indicate that they will
pour resources into the project. Vendors may indicate that their software
will meet almost all needs without modification. Part of this stems from
people’s optimism. Don’t accept any of this. Reserve judgment until later.
• Management often attempts to pin down these cost and schedule estimates
as the final ones. This is impossible without further analysis. The estimates
are necessary to make a decision. Head this one off by stating repeatedly
that the estimates will be revised.

Aug 25, 2011

STEP 6: MAKE THE BUY OR BUILD DECISION

You are now in a position to make a fundamental decision. Should you at-
tempt to develop the application software yourself or with others, or should you
acquire a software package? Within this question are several others:
• If you develop it yourself, what types of tools will you use? Who will do
the work?
• If you acquire a package, what software modifications will be needed? Who
will make these changes? What vendor support will be required?
There are a number of factors in uencing the answers to these questions.
These include the following:


Availability of the current IT staff to do development
. The IT staff already is
filled up with work. Adding more work means that something has to give.

Skills and knowledge of the current IT staff
. If you have selected a technol-
ogy direction and architecture that are foreign to the staff, you must allow
for a learning curve if you do development internally.

Availability and skill levels of the vendor
. The vendor includes both the
supplier of the software package directly as well as the staff of the
underlying database management system or Fourth Generation Language.

Availability, skills, and costs of consultants
. These consultants can aid you
in implementing a package or in supporting new development.
Due to the importance of this decision, you should proceed discretely.

Aug 24, 2011

STEP 5: DETERMINE THE TECHNOLOGY APPROACH AND REFINE COSTS AND BENEFITS

In Step 2, you determined requirements for the new process. In some cases,
you can specify the technology at that point if the situation is relatively simple.
However, there may be a need for further analysis. The purpose of this step is to
define the new systems and technology and then update the costs and benefits for
the new process. You will then be in a position to make the decision to acquire a
software package or build a system.
The scope of this step includes all the hardware, network, and software components but excludes the application software decision. The application software
decision is directly affected by the direction you take here. If you select an
environment or
architecture
(technology structure) for which there are no off-
the-shelf software packages, you will do development. A guideline here is to
keep the architecture open to admit the potential of software packages. You will
be refining what you identify here as you get further into implementation.
In Steps 2 and 3, you identified general components and attempted to
estimate what was needed. This was prior to the management presentation (Step
4) where you garnered support and the endorsement to proceed. You are now in a
position to involve the IT group more directly in determining what specific systems and components are needed. The detailed list in the costing figure still applies and can be used as a starting point.

Aug 23, 2011

STEP 4: PRESENT THE RESULTS TO MANAGEMENT

Presenting the results to management sounds straightforward, but it is fraught
with political peril. You risk alienating staff involved in the process or IT staff
who support the old system, even if you gain management support. We divide
this step into actions.

Aug 22, 2011

STEP 3: IDENTIFY COSTS AND BENEFITS COSTS

You must develop as detailed a list of costs as possible. A big mistake people
make is the omission of certain critical costs. For this reason, a starting list of
cost elements has been provided in Figure 3.4. Where do you obtain the cost
Network
• Cabling
• Network facilities work and preparation
• Routers / hubs / gateways / bridges
• Network operating system
• Network management software
• Network security software
• Internet and remote computer access
• Leased lines
• Additional WAN components
• Additional LAN components
• Mobile communications
• Network testing and diagnostic equipment
Hardware
• File server
• Database server
• Application software server
• Fax server
• Electronic commerce server
• Firewall server
• Printers
• Scanners
• Mobile hardware
• PCs and workstations
• Test environment hardware
• Backup/recovery hardware
• Specific industry hardware
• UPS hardware and surge supression devices
Software
• Server operating system
• Workstation operating system
• Database management systems
• Fourth-generation language
• Internet software
• PC/workstation software
• Electronic mail software
• Groupware software
• Security software
• Backup/recovery software
• Utilities
Installation support
• Cabling and network support —office level
• WAN labor
• Hardware installation and testing
• System software installation and testing
• Interface support
• Testing support


information? You have requirements from the previous step. To get prices and
estimates of work, there are support groups in your company. You can also surf
vendor sites on the web and even contact vendors for general information. Be
careful here in that you may get the vendors too excited, and they may interfere
with your work.
Once you have determined the number and type of component needed for
each requirement, you are in a position to justify these. In this figure, the justification for the quantity of the item needed appears in the third column and the justification for the model or type of item is
in the last column.