ICT Outsourcing: Is it an Option?

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©2013EmiratesIdentityAuthority.Allrightsreserved
Partners in Building UAE's Security & Economy
Our Vision: To be a role model and reference point in proofing individual identity and build wealth informatics
that guarantees innovative and sophisticated services for the benefit of UAE
‫اتحــــــــــــادية‬ ‫هيئــــــــة‬|Federal Authority
Presented by Dr. Ali M. Al-Khouri
In: ICT Outsourcing Summit – Organised by Saudi Computer Society
& NASEBA. 8-9 September 2013 | Riyadh | Kingdom of Saudi Arabia
ICT Outsourcing
Is it an option?

Our Vision: To be a role model and reference point in proofing individual identity and build wealth informatics that guarantees innovative and sophisticated services for the benefit of UAE
www.emiratesid.ae
© 2010 Emirates Identity Authority. All rights reserved
Table of contents
Introduction
View Point 1- In-house potential v/s outsourcing
View Point 2- Outsourcing’s role in developing knowledge based economies
View Point 3- Fuelling local skills and companies (on-shoring vs off-shoring)
Conclusion- Benefits of IT Outsourcing
1
2
3
4
5

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Introduction1
Table of contents

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Introduction: ICT as enabler .. 1
• In today’s business world,
IT is an integral part of
business operations.
• No longer a discrete
functional department,
producing report, or
processing financial
data.
• Facilitate business and
enable Organisations to
develop competitive
advantage.

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Characteristic Roles 1

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IT in the Business 1
IT departments play
a major role in the
transition and
transformation of an
organization’s
journey of process
optimization.
critical
Strategic
Alignment

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IT departments thus
have a lot of
functional activities
that result in their
own set of typical
operations and
projects
critical
Strategic
Alignment

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In many cases, it is
seen that the IT
department runs on
operations in parallel
to the organization’s
business operations.
critical
Strategic
Alignment

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IT Areas in the Business
• Infrastructure management
• Data center management
• Application management
• Systems integration
• Help desk services
• Testing and validation services
• R&D Services
• Information Security Services.
SYSTEMS
MANAGEMENT
SERVICE
MANAGEMENT
IN-HOUSE OR OUTSOURCE??
POTENTIAL
OUTSOURCEAREAS
1
IT thus works with various service providers or vendors to create,
maintain, or reengineer a company's business architecture and
systems. The key areas of IT Operations include:

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IT Areas in the Business 1
• Tasks and activities are enormous and need
dedicated resources.
• This brings the business organization into a
quandary:
- should the organization focus on these IT
Activity areas (that albeit aid the
business)?, or
- focus on the business itself that brings in
the revenue?
- Are the costs incurred on IT justified that
the business can spend on?

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IT Areas in the Business 1
• Although critical, tend to divert
organisations from core
functions.
• Many organizations moved into
IT Consulting businesses while
their core businesses were
probably edible oil production
or cloth weaving.
• When businesses are clear
about their focus areas of
revenue, IT departments can be
safely considered as potential
outsource areas.

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Outsourcing: is it a new phenomenon? 1
• New phenomenon or
invented for the new
economy?
• Existed since man sought to
produce goods!
• No one organization could
ever build everything from
within.
• Business have always
depended on vendors,
partners to supply parts or
services that were required
for the goods that were
designed and produced.

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• As economies developed and information
technology aided the growth, IT became a new
service.
• And then, as the organizations realized that IT
was becoming more a bane than a boon, IT
started to be treated as another commodity
necessary to run business operations and thus
could be outsourced.
• It all started with Kodak in 1989 when their IT
operations was given to IBM to handle so that
Kodak could focus on what they did best -
make cameras.
• It is a separate issue that IBM itself started
outsourcing their own IT business operations for
cost optimization. This came with globalization!!

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• Evolved into a rather mature business
operations in the last 25 years.
• New businesses setup to meet IT
requirements.
• Brick and mortar business could focus
on their business and IT is available as a
service commodity enabling the
business.
• However, the IT Outsourcing has no
single model for operations.
• IT requirements of organizations are as
diverse as their business requirements.
Even organizations involved in similar
businesses have different business and
therefore different IT requirements.
Outsource?

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IT Outsourcing Framework: Need for a Strategy?
Organization
Objectives
IT
Strategy
Enterprise
Risks
IT Risks
Corporate
Governance
IT
Governance
Outsource
Strategy
ROI Cost /Benefit
IT Areas to
Outsource
IT Human
Resources
Partner &
Vendor Mgmt
SLA & OLA
Management
KPI
Management
1

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IT Outsourcing Framework: Consideration?
Organization
Objectives
IT
Strategy
Enterprise
Risks
IT Risks
Corporate
Governance
IT
Governance
Outsource
Strategy
ROI Cost /Benefit
IT Areas to
Outsource
IT Human
Resources
Partner &
Vendor Mgmt
SLA & OLA
Management
KPI
Management
1
IT as an integral part of the business operations and derive the
strategy based on multiple factors

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IT Outsourcing Framework: what to outsource?
Organization
Objectives
IT
Strategy
Enterprise
Risks
IT Risks
Corporate
Governance
IT
Governance
Outsource
Strategy
ROI Cost /Benefit
IT Areas to
Outsource
IT Human
Resources
Partner &
Vendor Mgmt
SLA & OLA
Management
KPI
Management
1
determine the
CAPEX and OPEX

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View Point 1
In-house potential v/s outsourcing2
… determining whether IT is to be outsourced at all ?
Table of contents

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In-House or Outsource? A Practitioner’s Viewpoint… 2
• strong proponent of “Focus on Core Business”..
• all non-core activities like IT should be outsourced..

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In-House or Outsource? challenges faced when non-core activities 2
IN-HOUSE CHALLENGES OUTSOURCE SOLUTIONS
Harnessing potential is a continuous process
and expensive with a specific training and
development budget
No training or internal resource development
budgets.
High Maintenance – requires supervision,
management, leadership, training.
Lower maintenance since the outsource is bound by
SLAs and OLAs leaving the organization to manage
the SLA/OLA
System Management needs continuous
updates- management against obsolescence
Systems and IT Process management is owned and
managed by the outsource partner with the
organization needing to manage only service levels
High Capital Expenditure owing to ownership
of infrastructure
High Operating Expenditure with no or very low
CAPEX. The OPEX is offset by the cost of internal
operations
Risk of Employee Turnover and resource
continuity
Outsource partner manages their resources with
organization focused on OLAs and service continuity

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• As the world grows digital
and geographic boundaries
become less and less
obscure, the global
economy is driven by IT.
• Information Management
has evolved to Knowledge
Management and
Knowledge is shared.
• This takes Outsourcing to a
new paradigm.
Digital World 3

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Table of contents
View Point 2
Outsourcing’s role in developing knowledge
based economies
3

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• Is all about Globalization.
• Universal access to knowledge
and knowledge is ubiquitous.
• Digital Economy drives the
Knowledge Economy
diminishing geographical
borders.
• Tapping knowledge across
geographical borders
automatically results in
outsourcing.
• One Connected World!
Knowledge Economy and Outsourcing 3

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• Technology transformed
physical infrastructure
available on demand as
a service: Cloud Services..
• Data centers: provide
computing platforms as a
service.
• Knowledge workers are
available on demand. HR
as a service.
• .. all facilitated
outsourcing activities.
Knowledge Economy and Outsourcing 3

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Typically Characterized by
• Costs of Labor
• Access to Knowledge
Workers
• Demand and Capacity
Management
• Performance and Service
Delivery Improvement
• Digital Economy
Outsourcing: technological in nature? 3

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Table of contents
View Point 3
Fuelling local skills and companies (on-
shoring vs off-shoring)
4

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National Human Capital Development 4
managing partners and technology
Service
Delivery
Managers
focused on
customer
relationships
and service
delivery
Mode of Outsourcing and Contract models (like Build- Own- Operate- Transfer)
human resource development and transformation takes place in the organization

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IT Service Delivery
 Active Directory Management and Administration
 Server Administration
 Storage Administration
 Backup Administration
 Network Administration
 Security Administration
 Database Administration
 E-mail/ MS Exchange Administration
 Help Desk Administration and Management
 IT Incident Management
 IT Problem and Resolution Management
 IT Change Management
 IT Asset Management- License Management
 IT Systems Maintenance
Areas of Knowledge Development 4
IT experts are
available on-site
Provide shadow
teams that can
work together with
the experts
Knowledge transfer
On-Shore
Outsourcing

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IT Resource provisioning
• New Server Provisioning- Capacity Management
• New User Provisioning
• New Storage provisioning- Capacity Management
• New Backup provisioning
• Additional Memory and Processing (CPU)
capabilities provisioning- Capacity Management
• New Mail Box Provisioning- Capacity
Management
IT Monitoring
• Server Performance Monitoring and Reporting
• Network Performance Monitoring and Reporting
• Network Security and Threats Monitoring and
Reporting
• Communication System Performance Monitoring
and Reporting
• Application Performance Monitoring
Areas of Process Development 4
reduces operations costs
management teams get
developed managing the
technology partners
development of systems and
business analysis that focus on
information analysis & help
organizational decision
making.
Off-Shore
Outsourcing

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Application Services
 Oracle ERP Maintenance, Administration and Management
 SharePoint Maintenance, Administration and Management
 EPM Maintenance, Administration and Management
 Blackberry Maintenance, Administration and Management
 CRM (when implemented) Maintenance, Administration and Management
Intranet Services
 Internal HR e-Services Maintenance, Administration and Management
 Kiosks Hardware Maintenance, Administration and Management
 CRM Services (Internal)
• Configuration of applications, hardware, databases and operating systems
• Documentation (Operations Manuals, Standard Operating Procedures, Policy
Manuals)
Areas of IT Services Development 4
Off-Shore
Outsourcing
Other key areas of development that could benefit for off-shore or near-
shore outsourcing are Application Development and Implementation
Services:

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Table of contents
Conclusion
Benefits of IT Outsourcing5
improving organizational performance by enabling
organizations to remain focused on their core
businesses.

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IT Outsource Approach 5

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Doubting Feasibility: 3 Phased Approach 5
IT OptimizationManaging IT
resources in
existing state
Sustaining benefits

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IT Outsource Transition Methodology 5

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Conclusion- IT Outsource Benefits 5
• Standardized IT Service Management
and delivery with SLAs increasing
internal IT Customer Satisfaction
• Work on BYOD basis where users can
get IT Services such as Domain Access,
Office 365, Help Desk, Document
Access, Security Services on the cloud
• OLAs leading to optimal performance
of IT Assets leading to better utilization
of the IT hardware resources and
thereby better utilization of power and
space.

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Conclusion: Knowledge Workers 5
• Better utilization of human resources: We
can redeploy the current skilled resources
to:
- Focus on core function and processes.
- Utilize current skilled resources in critical
projects since they will be free from
day to day operations - this will lead to
better IT Project Management and
better delivery from IT Projects.
- Lower Operating costs

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Thank You
Dr. Ali M. Al-Khouri
Director General | Emirates Identity Authority | UAE
ali.alkhouri@emiratesid.ae | www.emiratesid.ae

ICT Outsourcing: Is it an Option?

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