Lucent Exec Says Outsourcing Changes Nature of IT
LAS VEGAS -- In an address here at Networld+Interop 2000 in May, Jeff Akers, COO of Network Care Professional Services at Lucent Technologies Inc., said outsourcing services changes the role of IT in an organization.
According to Lucent (www.lucent.com), enterprise customers spend an average of 67 percent of their IT budget on network operations, and 33 percent on hardware and software.
The ratio alone demonstrates an opportunity to cut the costs of the network operations side of things, according to Akers. This is particularly true if customers examine their infrastructures and resources and make themselves aware of what areas they should out-task, as well the opportunities to outsource.
In a white paper on outsourcing, John McConnell, president of McConnell Associates Inc. (www.mcconnell.com), says organizations can use scarce resources more effectively if they outsource low-level tasks and focus their energies on business-oriented activities.
"It’s a given that most companies can’t handle it all themselves," Lucent’s Akers says.
The number and variety of service providers coming to market is increasing at a rate that is hard for IT departments to track. Lucent expects at least 1,000 new service providers, across several market sectors, will enter the market this year. Most service providers and consultants are highly specialized companies that know their service, leaving other specialties to companies that really knows them.
Akers says there is also a shift in who is driving the market for service providers.
"It used to be that enterprise customers were driving the need for service providers, but now there’s a lot more activity coming out of the providers themselves," he says.
The emerging storage service provider and extranet service provider markets are two examples.
As outsourcing becomes more common and the options become more plentiful, IT staff find themselves spending a great deal of time handling the outsourcing relationships. This creates a fundamental shift in the way IT does its job.
"High-level IT people are now becoming relationship managers, not just with their own employees, but also with partners and service providers," Akers says.
McConnell's white paper says the roles of external service providers and IT groups are converging. Specifically, service providers are differentiating their offerings with service-level agreements. On the other hand, organizations are asking more from their IT departments, as business survival depends on using infrastructure and resources to their capacity. As a result, IT is acting the role of service provider by offering more services to business units within their own company.
Akers says this blending is evolutionary. "IT has had to manage relationships and continue to offer more and more to their direct end-users for years now. Now this ability to manage relationships is imperative and should be part of their resume," he says.