Bloated, sloppy and lazy. Those are the words used by Mark Lewis, a lawyer specialized in outsourcing services, to describe the IT services industry, as he was recently quoted at a blog post by Karl Finders at computerweekly.com
Some may find those statements hard to dispute. Specially looking at some specific data, like Standish Group’s, widely distributed Chaos Report, which shows that merely 32% of software projects are successful; or events like this January’s ruling by a London court, ordering an outsourcing provider to pay damages to British Sky Broadcasting, its former client, for failing to live up to its sales pitch in a ₤48 million contract.
IT is a complex industry that has evolved faster than any other in the history of mankind. Twenty years ago one megabyte was considered a large amount of data; a cell phone was a luxury device used for voice conversations, not a tool to watch and upload videos on youTube, update Facebook or Twitter, and play with countless applications.
Business Technology has also evolved at an accelerated pace, generating a lot of complexity, slow-moving practices and vendor lock-in along the way. I’m not trying to make excuses, but I do not know many people that 5 years ago could have anticipated the conditions that rule today. Certainly not the collapse of the financial markets in 2008, nor the possibility that the front runners in the battle for the operating system of the future would be Apple and Google, and not Microsoft. Hence a five-year outsourcing contract is much likely full of un-foreseen circumstances, which may affect the relationship between client and outsourcer.
Despite the horror stories, the outsourcing industry has also evolved leaps and bounds in the last two decades. Offshore providers, a classification that barely existed at the time, are now playing a leading role in the IT services landscape.
Industrialization of services
As a way to reduce the risks and costs of outsourcing, Gartner is now advising some of its clients to buy industrialized IT services. Gartner defines IT industrialization as: “the standardization of IT services through predesigned and preconfigured solutions that are highly automated, repeatable, scalable and reliable, and that meet the needs of many organizations.”
In this definition, and related research, Gartner’s focus is on SaaS, infrastructure utility and cloud computing. Yet, most of these models are relatively immature, and face significant roadblocks; including the impractical, even herculean task of retrofitting business applications to work in the cloud. Plus the fact that most senior business leaders believe that safety, security and privacy are top potential risks of cloud computing.
Cloud computing and SaaS may be the way of the future; but organizations will continue to rely on non-cloud based resources for most of their business applications, and the services that create, validate and maintain them; at least for the next few years.
Processes command industrialization
Offshore and nearshore service providers have created a reputation around process rigor. This is due to the fact that during the 90’s, these vendors were subject to rigorous scrutiny with regards to their ability to comply with standards; scrutiny, which by the way, was not enforced on many traditional vendors.
A well-implemented process infrastructure, compliant with standards like CMMi or ITIL, meets Gartner’s criteria of industrialized IT services for those applications that cannot or should not be migrated to a cloud-based infrastructure. These characteristics are: automated, repeatable, scalable, reliable, and meeting the needs of many organizations.
Industrialization can be conceived as a modernization process, in which technology is introduced as an agent of change; but the processes behind this technology are the ones that yield transformation and innovation.
Henry Ford’s contribution to industrialization was mainly on processes, not the technology that was available to every other car maker at the time. WalMart and Southwest airlines are very wise in the use of technology, but they command their respective industries due to their core processes and procedures.
Regardless of strategy, cloud or non-cloud, industrialization is definitely the next step in the evolution of the IT services industry. A rigorous process discipline is a must in the effort to bring this “bloated, sloppy and lazy” industry into a brighter future.