Description
It highlights parameters like benefits of incremental outsourcing,IT service chain,hosting models,managing legacies.
? Managing
the shortage of skilled IT workers ? Reduced time to market ? The shift to 24x7 operations ? Favorable cash flow profiles ? Cost reduction in IT service chains ? Making applications globally accessible
Purchase versus Subscribe Cash Flows
C U T O V E R
PURCHASE
Benefits Begin To Trend Up (if project is successful)
+ _
Purchase and Installation ? Buy software ? Hire consultants ? Install and Test
?
Time
Costs Stabilize at Maintenance Level
Immediate Benefits (infrastructure already in place)
SUBSCRIBE
+
Time
_
Subscription Fees
Startup Fee
Source:
Applegate, Lynda M., Robert D. Austin, and F. Warren , McFarlan Corporate Information Strategy and Management McGraw Hill/Irwin, 2002.
-1
An IT Service Chain
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan, Corporate Information Strategy and Management. Burr Ridge, IL: McGraw-Hill/Irwin, 2002.
Chapter 7 Figure 7-2
Internal versus External Service Delivery
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan, Corporate Information Strategy and Management. Burr Ridge, IL: McGraw-Hill/Irwin, 2002.
Chapter 7 Figure 7-3
Levels of Service from Hosting Providers
Level of Service Bu siness op erating services Ap p lication su p p ort services D escription of Service Ad m inistering and op erating an ap p lication. Su p p ort for softw are above the op erating system level; ap p lication su p p ort; ap p lication p erform ance m onitoring and tu ning; d esign of ap p lications for scalability, reliability, secu rity. Su p p ort for hard w are, op erating system ; reboot services; d ata backu p and d isaster recovery services; URL m onitoring. Connectivity w ithin the facility and externally to the p u blic Internet and to p rivate p eering netw orks; m onitoring of netw ork traffic at the transp ort layer; service level assu rances at the p acket loss and netw ork availability layer; netw ork secu rity. Su itable floor sp ace and p hysical facilities; m aintenance of the sp ace and facilities
Platform services
N etw ork services
Real estate services (low est level)
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan, Corporate Information Strategy and Management. Burr Ridge, IL: McGraw-Hill/Irwin, 2002.
Chapter 7 Table 7-1
? Colocation
hosting ? Shared hosting ? Dedicated hosting
? ? ?
Simple dedicated hosting Complex dedicated hosting Custom dedicated hosting
? Descriptive
information ? Financial information ? Proposed plan for meeting service requirements ? Mitigation of critical risks ? Service guarantees ? Pricing
Summary Grid for Computing Hosting Providers
Comparison Dimension Company Description Provider 1 Regional hosting and broadband provider Provider 2 National hosting services provider Provider 3 Re gional telco, backbone,
(backbone, DSL)
service provider Employees Financial Profile 1600 Declined to provide (private company) 3300 After tax loss $180 mil on sales of $600 mil; strong cash position; new facilities building offered as explanation for lac of ck profitability Number of Data Centers Managed/ Total Square Feet Space offered (RFP specified space for 3 8’x8’ cages (192 sq ft), partitions 3 8’x7’ cages (168 sq ft), partitions 3 data centers, 160,000 sq. ft. 28 data centers, 1.6 million sq. ft.
broadband service
provider 28,000 After tax profit of $1.1 billion on sales of $13 billion (most not from hosting business).
5 (2 operational), 220, 000 sq. ft. (45,000 operational) 280 sq ft enclosed room
six racks of
equipment) Physical security
removed to provide
contiguous space Fully meets requirement
removed to provide
contiguous space Fully meets requirement Some concerns (see notes from site visit)
Comparison Dimension
Power
Provider 1
Full meets requirement Full meets requirement
Provider 2
Full meets requirement Full meets requirement
Provider 3
Connected to only one power grid; two promised within 6 weeks Not redundant to backbone; promised redundancy within 6 weeks Partly meets requirement $10,800 $9,800
Connectivity
Service-level agreement One-time setup cost, space Monthly space rental
Full meets requirement $6,500 3x $6,500
Full meets requirement $7,800 3x $6,800
One-time setup cost, connectivity
Variable connectivity cost
$1,200
$1,200 per month + $525 per month for each mbps above 10
$1,500
$1,500 per month + $589 per month for each mbps above 10
$1,600
$900 per month + $412 per month for each mbps above 10
? Technology
problems ? Residual process complexity ? Local adaptation ? Nonstandard data definitions
Key Questions in Managing Legacies
Legacy Systems ? ? How will new infrastructure exchange data with legacy systems? Will new infrastructure obtain needed real - time interaction with legacy systems? What workarounds are necessary? Are they sustainable? What is long -term strategy for renewing legacy systems? How will new infrastructure affect ways of working and communicating? Are anticipated changes acceptable? Should technology drive organizational and cultural change? Should organization and culture be protected from technology effects? What are organizational expectations about common processes in different parts of the organization? What are criteria for deciding whether systems or process will change when the two are not compatible?
? ? Legacy Organizations and Cultures ?
? ? ?
?
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren
McFarlan , Corporate Information Strategy and Management . Burr Ridge, IL: McGraw -Hill/Irwin, 2002.
Chapter 7 Table 7 -4
doc_129088659.ppt
It highlights parameters like benefits of incremental outsourcing,IT service chain,hosting models,managing legacies.
? Managing
the shortage of skilled IT workers ? Reduced time to market ? The shift to 24x7 operations ? Favorable cash flow profiles ? Cost reduction in IT service chains ? Making applications globally accessible
Purchase versus Subscribe Cash Flows
C U T O V E R
PURCHASE
Benefits Begin To Trend Up (if project is successful)
+ _
Purchase and Installation ? Buy software ? Hire consultants ? Install and Test
?
Time
Costs Stabilize at Maintenance Level
Immediate Benefits (infrastructure already in place)
SUBSCRIBE
+
Time
_
Subscription Fees
Startup Fee
Source:
Applegate, Lynda M., Robert D. Austin, and F. Warren , McFarlan Corporate Information Strategy and Management McGraw Hill/Irwin, 2002.
-1
An IT Service Chain
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan, Corporate Information Strategy and Management. Burr Ridge, IL: McGraw-Hill/Irwin, 2002.
Chapter 7 Figure 7-2
Internal versus External Service Delivery
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan, Corporate Information Strategy and Management. Burr Ridge, IL: McGraw-Hill/Irwin, 2002.
Chapter 7 Figure 7-3
Levels of Service from Hosting Providers
Level of Service Bu siness op erating services Ap p lication su p p ort services D escription of Service Ad m inistering and op erating an ap p lication. Su p p ort for softw are above the op erating system level; ap p lication su p p ort; ap p lication p erform ance m onitoring and tu ning; d esign of ap p lications for scalability, reliability, secu rity. Su p p ort for hard w are, op erating system ; reboot services; d ata backu p and d isaster recovery services; URL m onitoring. Connectivity w ithin the facility and externally to the p u blic Internet and to p rivate p eering netw orks; m onitoring of netw ork traffic at the transp ort layer; service level assu rances at the p acket loss and netw ork availability layer; netw ork secu rity. Su itable floor sp ace and p hysical facilities; m aintenance of the sp ace and facilities
Platform services
N etw ork services
Real estate services (low est level)
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan, Corporate Information Strategy and Management. Burr Ridge, IL: McGraw-Hill/Irwin, 2002.
Chapter 7 Table 7-1
? Colocation
hosting ? Shared hosting ? Dedicated hosting
? ? ?
Simple dedicated hosting Complex dedicated hosting Custom dedicated hosting
? Descriptive
information ? Financial information ? Proposed plan for meeting service requirements ? Mitigation of critical risks ? Service guarantees ? Pricing
Summary Grid for Computing Hosting Providers
Comparison Dimension Company Description Provider 1 Regional hosting and broadband provider Provider 2 National hosting services provider Provider 3 Re gional telco, backbone,
(backbone, DSL)
service provider Employees Financial Profile 1600 Declined to provide (private company) 3300 After tax loss $180 mil on sales of $600 mil; strong cash position; new facilities building offered as explanation for lac of ck profitability Number of Data Centers Managed/ Total Square Feet Space offered (RFP specified space for 3 8’x8’ cages (192 sq ft), partitions 3 8’x7’ cages (168 sq ft), partitions 3 data centers, 160,000 sq. ft. 28 data centers, 1.6 million sq. ft.
broadband service
provider 28,000 After tax profit of $1.1 billion on sales of $13 billion (most not from hosting business).
5 (2 operational), 220, 000 sq. ft. (45,000 operational) 280 sq ft enclosed room
six racks of
equipment) Physical security
removed to provide
contiguous space Fully meets requirement
removed to provide
contiguous space Fully meets requirement Some concerns (see notes from site visit)
Comparison Dimension
Power
Provider 1
Full meets requirement Full meets requirement
Provider 2
Full meets requirement Full meets requirement
Provider 3
Connected to only one power grid; two promised within 6 weeks Not redundant to backbone; promised redundancy within 6 weeks Partly meets requirement $10,800 $9,800
Connectivity
Service-level agreement One-time setup cost, space Monthly space rental
Full meets requirement $6,500 3x $6,500
Full meets requirement $7,800 3x $6,800
One-time setup cost, connectivity
Variable connectivity cost
$1,200
$1,200 per month + $525 per month for each mbps above 10
$1,500
$1,500 per month + $589 per month for each mbps above 10
$1,600
$900 per month + $412 per month for each mbps above 10
? Technology
problems ? Residual process complexity ? Local adaptation ? Nonstandard data definitions
Key Questions in Managing Legacies
Legacy Systems ? ? How will new infrastructure exchange data with legacy systems? Will new infrastructure obtain needed real - time interaction with legacy systems? What workarounds are necessary? Are they sustainable? What is long -term strategy for renewing legacy systems? How will new infrastructure affect ways of working and communicating? Are anticipated changes acceptable? Should technology drive organizational and cultural change? Should organization and culture be protected from technology effects? What are organizational expectations about common processes in different parts of the organization? What are criteria for deciding whether systems or process will change when the two are not compatible?
? ? Legacy Organizations and Cultures ?
? ? ?
?
Source: Applegate, Lynda M., Robert D. Austin, and F. Warren
McFarlan , Corporate Information Strategy and Management . Burr Ridge, IL: McGraw -Hill/Irwin, 2002.
Chapter 7 Table 7 -4
doc_129088659.ppt