Beyond Cheap Labor Outsourcing: IT Operations Automation

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By Joseph E. Nash and Roger C. Roy Jr.

For the past decade or so, IT organizations looking to lower delivery costs have outsourced day-to-day IT operations activities to IT suppliers who in turn send the work to low cost locations (primarily India). Typically, this is done by executing a knowledge transfer process whereby the IT suppliers capture the information needed to operate the client's environment and then train offshore resources to do the same work. Ideally, the IT supplier also contributes processes and technology best practices and actually improves the execution of the services formerly performed by the client.

While these solutions worked to cause one-time reductions in IT costs, the savings from offshoring is declining while productivity and cost challenges require CIOs to continue to demand more. Do we simply encourage suppliers to keep chasing cheaper labor around the globe? Do suppliers use knowledge tools to keep pushing the work down to lower (cheaper) levels of staff? Neither of those options are particularly appealing. Perhaps suppliers can continue to improve their processes and execution to reduce the time and effort to deliver services. How much incremental value is that really going to deliver? Maybe a few percentage points in productivity improvement annually and maybe none after inflation.

What's needed is a sea change. CIOs need a disruptive technology-driven solution to challenge the traditional role of human labor in running day-to-day IT operations - specifically the execution of repetitive tasks performed every day by IT resources around the globe. They need automation in IT operations.

Think robotic welding and automated assembly in modern car manufacturing compared to the labor based production lines of 30 years ago. Automation is the natural next step in delivery of IT services and we think the impact will be dramatic.

The first principles of such a sea change are:

  • Automate a substantial amount of the work performed by low and mid-level resources involved in managing day-to-day IT operations.
  • Improve the end-user experience by resolving many incidents without human intervention thus reducing recovery periods from hours to minutes or just seconds.
  • Reduce human intervention to reduce the significant number of errors introduced by humans. See Embracing Failure: Availability via Recovery-Oriented Computing (ROC) -- Slide 5
  • Provide cost advantages that outstrip labor arbitrage-based operating models.
Better, cheaper, faster. Achieving all three in IT delivery has never been easy. Labor arbitrage trough offshoring delivered on cheaper, but not always on better and faster.

Automation, when it comes to an industry, can deliver all three. The time is now for IT to turn automation on itself and reap the benefits of this disruptive technology that other industries have already experienced.

One player with a robust and widely deployed (1M+ CIs) automation offer is IPsoft.