Bladewatch.com

ComputerWeekly.com

An internal Legal & General e-mail has revealed the company could soon outsource its IT infrastructure and some IT services to either IBM or Fujitsu, and warns employees to prepare to be transferred to the supplier that is chosen.

The company that wins the contract will host Legal & General’s IT infrastructure and possibly provide other IT services.

Legal & General said it wants to ensure its IT infrastructure can support future business growth and reduce the risks associated with creating its own bespoke datacentre.

Other services that could be outsourced include infrastructure and operations, IT security operations and assurance, and parts of IT procurement and IT supplier relationship management.

An interesting post talking about outsourcing and how it can be seen as a vehicle for achieving cost savings or business transformation, that it meets the business requirements in terms of agility and affordability. It will be interesting to see how such deals are affected by all the discussions in the cloud space.Will we outsource elements of the IT function to cloud providers, the backups/restores, the email or the storage, or will we hand the challenges over to a third party to provide.

The only challenge I see with cloud, and with outsourced vehicles is the concept of billing and disclosure, everyone wants transparent costs until they receive the bill, until everything is suddenly billable,  “..sorry you want an engineer to build servers, fine the book value cost is £500 per day”, where as before that cost might have been hidden amongst the general IT cost base. At the same time, the more we commoditize the cost, I need a server built, which might take 3 hours, it might take minutes, can we bill on a half day on a per minute basis or is it by the day?

The challenge is one of economics, a value to cost ratio, we can supply a guy to come in and swap your system board, but and this is it, he or she isn’t traveling for three hours to earn 1 or 2 hours pay and consider that if you called a vendor today and said “..send an engineer to fix my server” the cost would be a call out fee, hourly engineer cost plus parts, the business would have typically been hidden from such things. How does this transform the economics of the IT function, of the way you handle your IT applications and services?

As we look at outsourcing, at cloud or buying in services, we need to establish the key drivers, is it 24/7 we want, always on, always available and what SLA is it that we want and are willing to pay for? What economic value do we place on an outage, and are we able to inform business units that if their server dies, going forward we log a call with a vendor/service provider who will send an engineer to fix it next business day? Are we in a state where reloading the application is possible in days rather than weeks? How tied to the hardware, to the network and the storage is that device?

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