The Structure Of Outsourcing
20
October
admin

by Oliver Schmid

1.) What is outsourcing?

For years, outsourcing has been on the mind of many business people but what one associates with the term outsourcing, might be conceived as something completely different by somebody else. The only common ground is the understanding to give a task or process that used to be performed internally to a third-party service provider for fulfillment.

2.) Types of Outsourcing:

Outsourcing can be as mundane as giving support to somebody else and might be as complex as having business core processes being performed by somebody else.

Typical tasks and/or processes that are outsourced can be:

  • Partial or Total Outsourcing: Some functions or tasks will be outsourced partially while other will be outsourced in its entire. Partial or complete outsourcing can also be seen differently and depends of the viewpoint (Customer / Provider) of the parties involved. It also depends of the overall functionality of the to-be outsourced operations and can often not be determined clearly.
  • There is outsourcing of only operational functions vs. outsourcing of functions, tools and personnel.
  • Business Process Outsourcing (BPO): Interpretation of the meaning of BPO varies and depends again on the point of view. From a customer point, it could be giving away an in-itself-closed-business-process for which the provider carries complete responsibility. From a legal aspect, it is imperative to define all roles and responsibilities in a contractual from and every party involved need to understand their individual responsibilities and the consequences for non-compliance.

3.) Goals

The possible reasons for customers to look more closely at outsourcing to are equally diverse and complex as its possibilities and approaches.

Therefore, only some of the usual motivations for outsourcing will be referred to here:

  • Focusing on core business:
    • An organization wants to concentrate its resources on its core business, and therefore functions that are not part of its core business will be outsourced.
  • Cost savings and optimization:
    • An organization wants to reduce its cost of doing business through outsourcing by creating a flexible cost structure, which is directly related to the performance of its service provider.
  • Purchasing skills:
    • An organization wants to benefit from the increased competence of the provider who considers the to-be outsourced function as its core business. Often, an organization also wants to reduce its performance risk through contractual reassignment of performance risk to its service provider.
  • Flexibility:
    • The provider can often offer the customer more flexibility in the implementation of the delegated services than it would have been possible to a customer with its limited resources and scope for action.

4.) An outsourcing project is divided generally into:

  • the preparatory and planning phase, which includes the Baseline analysis, defining goals and determining the future procedures,
  • the initiation phase with the selection of the provider. and the contract negotiations,
  • the implementation phase with the transfer and the Setup of the facility (or Transition to Operate) and finally the actual
  • the start of the actual operation

Looking at the continuous “life” of an outsourcing initiative the following phases will follow:

  • Review and optimization of relationship and implemented processes
  • At contract expiration either the transfer of all functions to a new service provider or the return of the outsourced functions to the organization (insourcing)

5.) Preparation & Planning:

At the beginning of each outsourcing, a strategic analysis is performed to determine which services or which divisions will be outsourced as well as where the interfaces between the internal and external providers will be in the future.

Following this phase the outsourcing scope will be defined, which will include the functional spectrum. It should definitely be avoided not to make any clear commitments at the beginning, because the scope is the basis for all further tests, the structuring of the outsourcing and the subsequent tender.

The next step would be the internal analysis (assessment) of all areas that are part of the scope:

  • What personnel and which assets are involved?
  • What type of data is available?
  • Current Cost?
  • Which services are currently performed internally and which are already performed externally?
  • To which extend have processes and services already been documented?
  • What is the quality of the currently performed services?
  • Is delivery of services consistent with the according service performance documentation?
  • Are there any legal aspects that need to be considered; e.g. transfer of licenses?
  • Are there any industry-specific aspects to be considered (e.g. in the financial area)?
Oliver Schmid has extensive experience in offshore outsourcing to the Philippines, nearshore outsourcing to Canada and onshore outsourcing of matrix oriented call centers.  He is also versified in outsourcing of data center operations and data center monitoring and support. In addition Oliver Schmid participated in various 3PL and Supply Chainoutsourcing initiatives.


Oliver Schmid, EzineArticles.com Basic PLUS Author

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Outsourcing Done Right: A Real Life Story
20
October
admin

by Oliver Schmid

A very large collections call centre in Lakela...

Over the last 15 years I have participated and managed many outsourcing initiatives. The first undertaking, in 1995, I was involved in was the onshore or domestic outsourcing of atechnical support group to a “local” call center. Eventually the whole project failed after approximately 18 month. This failure was not due to a lack of training, but rather due to churn at the outsourcing provider. They had such a high turnover of call center staff that the outsourcer was not able keeping up with training and retaining the know-how at the call center.

Subsequent studies and interviews with other organizations and 3rd party outsourcing providers I conducted, eventually uncovered that this was a common issue within the US call center industry. Being a call center agent that works in a support role can be a very demanding and stressful profession and there are not many people that can or want to be the ones dealing with other peoples problems, frustrations and complaints. It takes a special person to do that and still be able to remain calm but assertive.

Eventually the call center was pulled back in-house and we built a complete call center from scratch. Meaning we put the technology behind to support the call center agents, like a telephone system (AVAYA DEFINITY) that supported important call center functions, like:

  • call center monitoring application (BCMSVU) through wall boards and computer integrated telephony (CIT) as well as call center statistics.
  • Integrated Voice Recognition (IVR) application (PROLOGIX)

We implemented technology that provided call center agents the ability to log and research tickets, escalate calls to a higher level as well as recording calls for training purposes.

But the most important aspect has been that we hired people that fit the profile of a successful call center agent. People that did not mind dealing with other peoples problems. People that did not get upset about being yelled at or >on occasion<  being cursed at for no obvious reason, except the callers frustration that may or may not have been caused by the call center agent. It was important to support the call center agents in their task and function. The agents were given the ability to take frequent unscheduled breaks, especially after a extremely stressful call. All agents had the ability to conference in a supervisor if required, either through caller demand or if the agent thought it would be wise for conflict resolution. Call Center Agents were encouraged to talk to their supervisors and managers at any time if they needed to vent after a call or were in need of advise how to handle certain situations.

The call center eventually became very successful and was in operation for over 4 years with almost no turnover.

Eventually the organization increased its sales volume, which within a period of 2 years more than tripled, that the current call center setting just could not handle the onslaught of support calls anymore without increasing call hours and the number of agents. The budget in place did not support this.  Agents started to get burned out and leave, which in the long run led to not only a loss (call abandoned rate) of over 70% of all support calls but also tarnished the brand reputation.

Once more we looked into outsourcing opportunities. Briefly we evaluated nearshore call centers but came to the conclusion that this would not have been feasible since there would have been no cost savings and careful evaluation of these domestic call centers eventually revealed that they still had a fairly high turnover, which would have meant frequent loss of know-how and retraining (added cost).

We started to look into offshore outsourcing and what is the first country everybody thinks when talking about offshore outsourcing. Correct - India. We talked to call centers in India, talked to their clients and evaluated the supporting infrastructure (national telephone infrastructure in particular) in India. We also talked to some of our customers and their opinion if they would have to talk to a person in India and we discovered a resentment from our customers. This resentment mainly originated from the fact that they had to talk to a person with, as they perceived, limited language skills. Often these perception was based on a heavy Indian accent, even if the person had adequate verbal and grammatical language skills.

The fact is that most Indian people grow up speaking Hindi (or any dialect of it), while English is the secondary language and even with the most advanced training it is almost impossible for most of the population not to have an accent.

We then started to look into the Philippines as possible call center location. We performed the Philippine call centerevaluation with the same scrutiny as we did with the Indian call centers and we learned that the English language co-exists with Tagalog or Filipino as official language and that English was already taught in kinder-garden. Filipino is an official language of education, but less important than English. It is the major language of the broadcast mediaand cinema, but less important than English as a language of publication (except in some domains, like comic books, which are meant to speak directly to the Filipino psyche) and less important for academic-scientific-technological discourse. (1).

Eventually, it was decided to outsource the call center to the Philippines. The corporate head quarter of this call center was  in the US (NJ). In a matter of fact this call center organization even operated its own LEC (LEBBSI a FCC 214 licensed carrier)(2), with its own fiber optics lines from the US (CA) to the Philippines. It allowed for 24/7 call center coverage while the call abandoned rate almost overnight dropped from 70% to less than 1%. Startup cost for the Philippine call center was higher than with an onshore call center, since we had to fly equipment and trainers to the Philippines for the initial training.

Many organizations make the mistake to walk away from their responsibilities once the initial outsourcing process has been completed and leave their outsourcing provider up to themselves. This often can have catastrophic results and may lead to a complete failure of the outsourcing initiative.

During my time of researching various outsourcing organizations and talking to not only their management boards but also to their floor supervisor and even some agents, I had learned how important an open line between the organization that is outsourcing  and its provider can be. After the initial phase we had a structured approach on dealing with the call center and issues that did arise. We had established frequent scheduled conference calls to deal with issues while still providing floor supervisors to call our internal resources direct if required. We established an escalation procedures which all agents and in-house staff was aware of. We provided frequent product training via video conferencing for new employees or if existing agents were not completely familiar with the product and its functionality. We had a complete line of our most sold products on the floor at the call center. This way agents could actually follow the customer and explain more accurate and provide better support.

Over time, as we learned and became familiar with the call center and as they became more familiar with our product the call center became more autonome  and more efficient. Over time we introduced more of our more complex products to the call center.

We provided the call center agents with incentives, like t-shirts, marketing gadgets like pens, note pads, etc. and we even provided for the occasional lunch or other social gathering, which became a huge success. We even learned that call center agents from other groups were eager to join our groups.

In a matter of fact we worked with 2 support groups. The first group was a group that provided very basic trouble shooting support based on a Top 10 trouble shooting list as well as up an cross selling, where the second group handled more complex problems that were escalated by the first group. When the second group was unable to help the call eventually came back to us for follow-up support.

This call center has been in place now since fall of 2003 and has been and continues to be very successful. Initially we were able to provide the increased (24/7 and almost no lost calls) support at the same cost as when we operated an in-house 25 agent call center.

This story demonstrates that outsourcing can be successful if done right.

Oliver Schmid  led and participated in other successful outsourcing initiatives, like:

  • Warehousing and Logistics to 3PL providers
  • Data Center monitoring and support
  • Data Center redundancy & sustainability
  • ERP Implementation Project Management and Coordination
Sources:

(1)  Wikipedia: Languages of the Philippines

(2) Cyber City Teleservices

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The Structure Of Outsourcing!
20
February
admin
1.) What is outsourcing?

For years, outsourcing has been on the mind of many business people but what one associates with the term outsourcing, might be conceived as something completely different by somebody else. The only common ground is the understanding to give a task or process that used to be performed internally to a third-party service provider for fulfillment.

2.) Types of Outsourcing:

Outsourcing can be as mundane as giving support to somebody else and might be as complex as having business core processes being performed by somebody else.

Typical tasks and/or processes that are outsourced can be:

  • Outsourcing of support functions or value added services.
    • Support functions may include technical IT Support, Cleaning Services, Accounting, Human Resources, Security, Real Estate Administration and more.
    • Value added service might include Purchasing, Sales, R&D, etc.
  • Partial or Total Outsourcing: Some functions or tasks will be outsourced partially while other will be outsourced in its entire. Partial or complete outsourcing can also be seen differently and depends of the viewpoint (Customer / Provider) of the parties involved. It also depends of the overall functionality of the to-be outsourced operations and can often not be determined clearly.
  • There is outsourcing of only operational functions vs. outsourcing of functions, tools and personnel.
  • Business Process Outsourcing (BPO): Interpretation of the meaning of BPO varies and depends again on the point of view. From a customer point, it could be giving away an in-itself-closed-business-process for which the provider carries complete responsibility. From a legal aspect, it is imperative to define all roles and responsibilities in a contractual from and every party involved need to understand their individual responsibilities and the consequences for non-compliance.

3.) Goals

The possible reasons for customers to look more closely at outsourcing to are equally diverse and complex as its possibilities and approaches.

Therefore, only some of the usual motivations for outsourcing will be referred to here:

  • Focusing on core business:
    • An organization wants to concentrate its resources on its core business, and therefore functions that are not part of its core business will be outsourced.
  • Cost savings and optimization:
    • An organization wants to reduce its cost of doing business through outsourcing by creating a flexible cost structure, which is directly related to the performance of its service provider.
  • Purchasing skills:
    • An organization wants to benefit from the increased competence of the provider who considers the to-be outsourced function as its core business. Often, an organization also wants to reduce its performance risk through contractual reassignment of performance risk to its service provider.
  • Flexibility:
    • The provider can often offer the customer more flexibility in the implementation of the delegated services than it would have been possible to a customer with its limited resources and scope for action.

4.) An outsourcing project is divided generally into:

  • the preparatory and planning phase, which includes the Baseline analysis, defining goals and determining the future procedures,
  • the initiation phase with the selection of the provider. and the contract negotiations,
  • the implementation phase with the transfer and the Setup of the facility (or Transition to Operate) and finally the actual
  • the start of the actual operation

Looking at the continuous “life” of an outsourcing initiative the following phases will follow:

  • Review and optimization of relationship and implemented processes
  • At contract expiration either the transfer of all functions to a new service provider or the return of the outsourced functions to the organization (insourcing)

5.) Preparation & Planning:

At the beginning of each outsourcing, a strategic analysis is performed to determine which services or which divisions will be outsourced as well as where the interfaces between the internal and external providers will be in the future.

Following this phase the outsourcing scope will be defined, which will include the functional spectrum. It should definitely be avoided not to make any clear commitments at the beginning, because the scope is the basis for all further tests, the structuring of the outsourcing and the subsequent tender.

The next step would be the internal analysis (assessment) of all areas that are part of the scope:

  • What personnel and which assets are involved?
  • What type of data is available?
  • Current Cost?
  • Which services are currently performed internally and which are already performed externally?
  • To which extend have processes and services already been documented?
  • What is the quality of the currently performed services?
  • Is delivery of services consistent with the according service performance documentation?
  • Are there any legal aspects that need to be considered; e.g. transfer of licenses?
  • Are there any industry-specific aspects to be considered (e.g. in the financial area)?

End Part 1

Oliver Schmid

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Increasing profitability through EDI outsourcing
25
November
admin

The economic downturn is forcing organizations to review their current IT business processes.
Increasingly Third Party Outsourcing (TPO) providers are reporting of being approached in regards to outsource EDI operations.

Initially the decision on doing EDI is an easy one. It is considered of making a one-time upfront investment in hardware, software and development and then pocket the gains from decreased transaction cost and over a short time the initial investment cost have been recovered.

This is the time, when EDI moves from being a profit center, to being a cost center and companies start looking how they could save even more money. At this point outsourcing EDI may become a consideration.

Outsourcing EDI comes in many varieties and flavors. Finding and implementing the right solution depends of the readiness state of an organization. A readiness state is defined as followed: more…

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Rethinking Outsourcing
25
November
admin

A Definition of Outsourcing

Outsourcing is all around us and has always been. It just has become more apparent in today’s difficult economic times.

Unfortunately, outsourcing today is mostly associated with “Offshore Outsourcing”; meaning sending a certain function, business process or job to an oversea third party service provider, who has the ability to perform the same for less money.

We have to get away from this mindset that OutSourcing is equal to sending work overseas. Think about it, outsourcing has always been a part of our daily lives; as well in business as at home.

Some examples of business outsourcing are:

  • Hiring of cleaning crews to clean offices
  • Having trucking companies or the post office deliver your products and your mail … and YES this is outsourcing in its most basic form
  • Hire external service companies to maintain office equipment, like copiers, faxes, computers, etc.

Some examples for outsourcing in everybody’s private life:

  • Hiring a student to tutor your children
  • Hiring a cleaning person to clean your home (occasionally)
  • Taking a bus or train to work … and yes this is outsourcing, since you give somebody else the responsibility to get you from point A to point B and you don’t drive yourself.
  • Visiting a doctor… again, this is outsourcing. Who can afford to have their own doctor or nurse on staff?
  • The list goes on …
  • … and also here the list could go on and on.
Anybody may come up with their own examples about what they do not do themselves anymore in their daily life. Next, I want you to think about why you “Outsource” this functions or tasks and I bet that in 99.9% the answer is either money or lack of experience.

The same is valid for businesses. Outsourcing today is done because it just makes sense. Rather then investing in resources and additional education to do something that is not really a part of the core business function does not make sense anymore. It is cheaper and more effective to hire somebody who specializes in this area and has the skills, knowledge and the tools to perform the same function often even better and for less money or to say the least at the same cost to you.

Outsourcing does not make sense if one pays more for a service than if it would be performed inhouse. There for any outsourcing initiative must be evaluated carefully and a cost benefit analysis must be performed at all times

Again, Outsourcing does not mean a function is send overseas. There is onshore outsourcing, meaning outsourcing is performed by an entity in a neighboring or close by country or domestic outsourcing, which means the function is performed by somebody local or at least the same country.

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99.999%
26
July
admin

Five-nines reliability and what it stands for.

Network infrastrutcure providers, Telephone companies and Software as a Service (SaaS), as well as network equipment providers claiming to offer 99.999% up-time or reliability. But how many people actually know what it means and that a 99.999% reliability comes at a premium price.

The five-nines reliability comes originally from the telecom industry.

In a matter of fact, what is claimed as reliability is actuality availability. It means how much of the time a network or a piece of equipment is available for you to use. Availability is measured in how often something breaks and how long it takes to become available again. A server, router or switch that crashes and is up again within a couple of minutes falls under the five-nines reliability.

Should the problem be bigger and the fix takes 15 or 20 minutes it wouldn’t fall under the 99.999% reliability anymore but under the 99.99%.

To give you an idea what the various measurements mean, following a few examples:

99.9999% (Six-Nines) availability does only allow for 32 seconds or less of downtime per year

99.999% (Five-Nines) availability allows for 5 minutes and 15 seconds or less of downtime per year

99.99% (Four-Nines) availability allows for 52 minutes, 36 seconds or less of downtime per year

99.9% (Three-Nines) availability allows for 8 hours, 46 minutes or less of downtime per year

99% (Two-nines) availability allows for 3 days 15 hours and 40 minutes per year

In order to get more availability more reliable and expensive equipment needs to be put in place. It means also, buying not only the best equipment but also the easiest to repair and building redundancy.

In addition make sure that all components have the same rating. How much does it help, if your core server hardware has a 99.999% reliability, but some of the components in the server, like network interface cards (NIC) have only a 99% reliability.

It is also important to ask how much reliability is needed, since higher reliability will come at a premium price/cost.

When offering service, evaluate whether your clients need 99.999% reliability or maybe they can live with a 99% reliability, since you then can chose when to take you network or service offline for maintenance, since that is also a part that needs to be considered in your availability calculation.

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Outsourcing Done The Right Way
21
July
admin

Who has not heard horror stories about failed outsourcing initiatives.
Many organizations that attempt outsourcing often forget that the key to any successful outsourcing initiative is shared goals and good management.
Often outsourcing is only seen as a way to save money quickly and there for implementations are rushed into, without the proper planning and without documenting the business processes to be outsourced. In a matter of fact, documenting all relevant business processes as they exist today and the way they should exist in the future with the new outsourcing service provider will allow for a much smoother and painless implementation. Only developing the proper documentation will allow all parties involved to clearly understand all the needs, requirements and challenges of these processes.
It is also important to take responsibility for requirements. Incomplete or misunderstood requirements can make an outsourcing project more expensive as budgeted or even may fail a project completely. Nobody knows your business better than you and the outsourcer probably ever will. It is up to you to gather requirements from your business perspective and explain them to the outsourcer. Only this will assure that your needs and requirements are understood and documented accordingly.

The next important step is providing training. Very often training is ignored, but good training is an important key aspect. In order to show quick savings often poor documentation is thrown at the outsourcing partner, with the expectation that they have to and can deal with it, and then the partner will be abandoned. Such outsourcing deals will fail for sure. It is important to maintain control. Outsourcing does not mean abandoning and/or losing control. It is wrong to assume that the outsourcing partner knows it all and maybe even more and there for will be able to perform better, faster and cheaper. It is important to have key people that control and maintain relationships with outsourcing partners. These key people will maintain control and guide and govern the outsourcer. It is also important to implement metrics or key performance indicators (KPI) that are important to your business. Assign people that understand these metrics and are able to perform benchmarking of your outsourcing partner against these KPI’s and present them in a readable and understandable format that will allow to draw conclusions and take the necessary steps if required.

Last but not least, review your relationship regularly, as you would do with an internal department or internal staff. Make sure to review KPI’s, technical infrastructure and operational infrastructure. Combine reviews with clear measures to indicate problems or progress.

Remember if managed correctly, an outsourcing deal will be a win-win situation for both sides.

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The Seven Deadly Sins of Outsourcing
10
July
admin

Disclaimers:

This post was originally posted on the LinkedIn Group “Outsourcing to Ukraine” by Alena Shechkova at the Ainstainer Group and has been republished on this Blog with her consent.

This article is a shortened version of Jérôme Barthélemy’s – “The seven deadly sins of outsourcing.“

__________________________________________________________________________________

The Seven Deadly Sins of Outsourcing

While outsourcing is a powerful tool to cut costs, improve performance, and refocus on the core business, outsourcing initiatives often fall short of management’s expectations. Outsourcing failures are rarely reported because firms are reluctant to publicize them. However, contrasting them with more successful outsourcing efforts can yield useful “best practices”. Through a survey of nearly a hundred outsourcing efforts in Europe and the United States Jérôme Barthélemy in his article “The seven deadly sins of outsourcing” underlie most failed outsourcing efforts.

Here they are:

  1. OUTSOURCING ACTIVITIES THAT SHOULD NOT BE OUTSOURCED. Determining which activities can be best performed by outside vendors requires a good understanding of where the firm’s competitive advantage comes from. Resources and capabilities that are valuable, rare, difficult to imitate, and difficult to substitute for lead to superior performance. Activities that are based on such resources and capabilities (i.e., core activities) should not be outsourced because firms risk losing competitive advantage and becoming “hollow corporations”.
  2. SELECTING THE WRONG VENDOR. Selecting a good vendor is crucial for successful outsourcing. The literature has identified numerous criteria for successful provider choice. A useful distinction can be made between hard and soft qualifications. The first are tangible and can be easily verified by due diligence. Hard qualifications refer to the ability of vendors to provide low-cost and state-of the-art solutions. Important criteria also include business experience and financial strength. Soft qualifications are attitudinal. They may be non-verifiable and may change depending on circumstances. Important soft criteria also include a good cultural fit, a commitment to continuous improvement, flexibility, and a commitment to develop long-term relationships.
  3. WRITING A POOR CONTRACT. Since the 1980s, vendor partnerships have emerged as a model of purchasing excellence. Partnerships replace market competition by close and trust-based relationships with a few selected vendors. The notion that outsourcing vendors are partners and that contracts play a minor role was popularized by a landmark IT outsourcing deal. However, there are pitfalls in partnership management. A good contract is essential to outsourcing success because the contract helps establish a balance of power between the client and the vendor. Spending too little time negotiating the contract and pretending that the partnership relationship with the vendor will take care of everything is a mistake. Drafting a good contract is always important because it allows partners to set expectations and to commit themselves to short-term goals
  4. OVERLOOKING PERSONNEL ISSUES. The efficient management of personnel issues is crucial because employees generally view outsourcing as an underestimation of their skills. This may result in a massive exodus even before an actual outsourcing decision has been made. Firms that contemplate outsourcing must face two interrelated personnel issues. First, key employees must be retained and motivated. A second personnel issue is that the commitment of employees transferred to the vendor must also be secured.
  5. LOSING CONTROL OVER THE OUTSOURCED ACTIVITY. When the performance quality of an activity is low, managers are often tempted to outsource it. If poor performance is attributable to factors such as insufficient scale economies or a lack of expertise, outsourcing makes sense. If poor performance is attributable to poor management, outsourcing is not necessarily the right solution. When an activity is outsourced, it is crucial to retain a small group of managers to handle the vendor. These managers must be able to develop the strategy of the outsourced activity and keep it in alignment with the overall corporate strategy. While vendor management skills are very important, they must also be complemented with technical skills. If no one in the company is able to assess technological developments, outsourcing is bound to fail.
  6. OVERLOOKING THE HIDDEN COSTS OF OUTSOURCING. Outsourcing clients are generally confident that they can assess whether or not outsourcing results in cost savings. However. They are often overlook costs that can seriously threaten the viability of outsourcing efforts. Transaction cost economics (TCE) suggests two main types of outsourcing hidden costs. First, outsourcing vendor search and contracting costs. Search costs are the costs of gathering information to identify and assess suitable vendors. Contracting costs are the costs of negotiating and writing the outsourced contract. Second, outsourcing management costs: monitoring the agreement to ensure that vendors fulfill their contractual obligations, bargaining with vendors and sanctioning them when they do not perform according to the contract when unforeseen circumstances arise.
  7. FAILING TO PLAN AN EXIT STRATEGY. Many managers are reluctant to anticipate the end of an outsourcing contract. Therefore, they often fail to plan an exit strategy (i.e., vendor switch or reintegration of an outsourced activity. Actually, outsourcing relationships can be viewed on a continuum. At one end are large-term relationships where investments specific to the relationships have been made by one or both partners. At the other end are market relationships where the client has a choice of many vendors and the ability to switch vendors with little cost and inconveniences. In this case, there is no real advantage in recontracting with the same vendor.
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Password Security – the Joke of the Century
16
June
admin

It looks like people finally seem to grasp the importance of password security.  Passwords that contain numbers, letters (capital and lower case) seem to become the standard. The only unfortunate issue is that so many sites require passwords and some of these sites may require you to change the passwords periodically and it becomes almost impossible to remember all the different passwords for the various sites.

Somebody may say now: “So what, there for we have the password retrieval system.”.  And this is were the problem is. These password retrieval systems use a question or phrase that is easy to remember. Like:

  • What was the name of your first dog? This is an easy one to hack.
  • What was the name of your first school? Except if you were not born in a country with a completely different language/alphabet (e.g. Hebrew, Arabian, Swahili, etc.) this one could also be fairly easy to crack with the rightcyber_securitytools. Also, many of us have their resume on-line on some blog or Internet job board or have personal and private information like this on a social networking site. So also not too difficult to crack.

I could go on and on now. The fact is that these password retrieval systems provide very week protection.

I wonder why nobody has come up yet with a bio-scan system, like using a finger print instead of a password. Many laptops and some of the keyboards today come with a built-in biometric scanner. OK, they may cost a few $$$ more, but I bet that price would come down pretty fast when biometric scanning for password recognition becomes the standard.

Another system I like is the system Bank of America (BofA) uses in order to access my account. If I log on from a computer other than mine, or if my computer’s cookies have been removed, BofA requires that a security code is sent via SMS to my cell phone. I then have 10 minutes to enter this security code to identify myself as the valid account owner. Only after I have identified myself I am presented with the opportunity to enter my password. Should I have forgotten my password there are several security layers I have to go through in order to change my password and to access my account. Some of these questions are very unique, like the amount of my last deposit. Combined with other questions I consider this a safe access control. Again, somewhat complicated and lengthy but SAFE.

Maybe someday we can have biometric password control or at least biometric password retrieval. Just think about all the other options that could be available using biometrics. It could replace all our credit and debit cards. Accounts are linked to your finger print or iris scan. Rather then paying with a credit or debit card, you put a finger of your choice on a scanner and a screen gives you the option which account you would like to use, maybe with the account balance right next to it. So you never overdraw an account.

For me it seems to be a win-win situation for us the consumer and the banks.

Let me know what your thoughts are about this.

Oliver Schmid / 4954 IT Consulting, LLC

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Should You Consider Outsourcing Network Services?
12
June
admin

What are the indicators that would help you in deciding whether outsourcing network services should be an option considered?

Network services and operations are a given in todays business environment. There are a commodity, like electricity, gas and water. As long there is not interruption to supply nobody thinks about it. It is just there . . . until . . . it’s gone. And then everybody gets upset and wonders why no back-up plan has been put in place.

Like … what just happened and now ?!

hybrid-networks-2Would you consider driving you car without liability insurance?

Would you consider being without health insurance for you or your family?

Would you consider doing business without the proper business liability insurance in place?

Why then would you not want to protect your network infrastructure, which has become the life line fo your business?

Today many responsible businesses have put some form of protection in place, in form of uninterruptable power supplies (UPS) redundant network infrastucture components and maybe even redundant Internet Service Providers. But how many business can afford a generator to keep a data center up and running for a day or two or mabe even longer. Uninterruptable Power Supplies will usually only to keep your networking equipment and attched nodes (servers, pcs, laptops, etc) up and running for a very limited time and will allow for a graceful shutdown, in order not to lose any data or encounter any data corruption.  Most of the times there is nothing in place to keep your network up and running for extended periods of times.

Some organizations are even going that far to put in redundant Internet access connections (T1, DSL, etc.), but often it is forgottten that even redundant lines may be coming from the same Central Office (CO) and are fed through the same main line that feeds into the area of business. Most internet access outages today occur either at the CO or with-in the last mile (the distance from the CO to a defined business location). It could be networking equipment failure at the CO or line/fiber cuts at the last mile.

In order to avoid such situations you have to request to have your redundant lines being serviced from a different CO. Depending on the size of your business some providers may be hestitant to do so or only at an drastically increased rate.

Some organizations allow their staff to connect from home offices and other remote locations, but what good does it do if the lines to your place of business are down.

Here is were outsourcing network services can make sense.  An option is to setup a redundant network infrastructure at an remote location that sort-of replicates your inhouse data center environment.  This would allow, in case your data center equipment is not accessible for whatever reason, to connect to the remote off-site redundant data center location. Settings and data volumes would be replicated between the sites regularly.

The remote outsourced data centers also have external network redundancy put in place either through multiple access lines from various COs or through so-called SONET rings.

Many of these outsorcing providers also offer services that will monitor your internal network infrastructure and there for be able to react accordingly at any given time.

Your argument may now be, my network has never been down ever. Why should I do it. Consider it insurance. Just because you have not been ill in a long time does not mean you will never be ill and need a doctor. The question is not, whether you will have considerable network downtime that will seriously impact you business, BUT WHEN!!!.

It is just a matter of time.

Another scenario that would justify network outsourcing could be risinng IT expenses. Networks today grow organically. A piece is added here and another piece there and over time your network has grown to a proportion an size as it had not been intended in the first place. A the same time your cost for upkeep and maintenance have grown. The personnel infrastructure to support such a network may not be in place anymore or has grown to such an extend that the cost is hardly justified anymore. It may lead to budget restrictions, leading for some of the network infrastructure to become obsolete or outdated and there for not supporting or negatively impacting your overall business.icon_networks

With outsourcing some or all of your network services & operations, expenses and personnel cost can be brought in line with the overall business requirements.

Having performed many network services, network operations and data center outsourcing projects I have the experience to work with you on a solution that fits your needs, requirements and budget.

Feel free to contact me at any time at +1.770.776.6182 or via email at oliver.schmid@4954itc.com

(c) Oliver Schmid / 4954 IT Consulting, LLC

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