Infrastructure Support Services: An Offshore Success Story

Transcription

1 Case Studies, R. Terdiman Research Note 11 September 2002 Infrastructure Support Services: An Offshore Success Story Most enterprises equate offshore outsourcing with application services. This case study shows how a U.S. company has successfully used a service provider in India for 24x7 infrastructure support services. Core Topics Sourcing: Service Contracting; Sourcing and Procurement Issues and Trends Key Issues What are the new services required to support the new economy, and how are these services offered? How will service contracts evolve to adapt to changing buyer demands? Strategic Planning Assumption By 2005, at least 30 percent of offshore deals that started with application services will include an infrastructure component (0.7 probability). This case study describes the successful provision of 24x7 remote infrastructure support services (and related applications support) by Wipro, a leading Indian offshore services vendor with facilities in Bangalore, to a major U.S. financial company. The client is a global money management company offering a range of investment products from institutional portfolios, retirement plans and mutual funds. It has more than $400 billion of assets under management, more than 2,600 institutional clients, and 12 million shareholders and retirement plan participants. The financial company had been using U.S.-based external service providers for its IT work since the early 1990s. The Wipro relationship started in mid-1994 with a team of five people providing on-site application programming services in a staffaugmentation arrangement. Within a year, an offshore team of 10 people started to provide mainframe development services from a dedicated offshore development center in Bangalore, connected via a 19.2 Kbps Systems Network Architecture link to the customer's site. Wipro's relationship with the client grew steadily during the years, and Wipro now provides a range of services, including application development, maintenance and re-engineering of mainframe and Internet-based financial applications, application management support, 24x7 support services and database administration (DBA) support. The Wipro team comprises 140 people 50 on-site and 90 offshore assigned to a wide variety of projects (including the one described in this case study). The applications are a combination of mainframe and distributed, written in COBOL and Java 2, Enterprise Edition. Most are custom applications, some of which Wipro developed. Many of them are mission-critical and need to be supported on a 24x7 basis. Gartner Entire contents 2002 Gartner, Inc. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.

2 This case study focuses on the 24x7 services (server, database and applications support) provided by Wipro to support the customer's U.S. data centers. These currently house more than 71 Unix and Windows NT servers for Netscape, Net-Dynamics and iplanet applications, and more than 60 high-end production servers and support applications used by 2,000 end users. Problem: In 1999, the client's team of 42 on-site consultants and in-house staff involved in DBA, middleware infrastructure support for applications and Web servers and application support could only provide 12x5 support for production systems and 9x5 support for development systems, because of budget constraints. On-site support required outside these windows was provided on an on-call basis. Moreover, the team was not dedicated to these support activities and had other responsibilities. This resulted in a very long response times and no defined service-level agreements (SLAs). The estimated annual cost of these services was $5.8 million. Objective: The client was facing challenges in productivity and efficiency resulting from poorly defined processes for its infrastructure and applications support, and from the restricted service windows. It wanted to have 24x7 support for these services with tightly defined SLAs for response time and uptime at a lower cost than it could accomplish on its own. Although cost reduction was its primary objective in outsourcing offshore, 24x7 service was a key requirement. Approach: Wipro launched its infrastructure support services in Having worked with Wipro for many years, the client had confidence in Wipro's technical capabilities and its customer service focus, and contracted with Wipro to provide 24x7 support. The good relationship with Wipro throughout many years gave it confidence that remote management from India could work, even though it was on the leading edge in procuring such services. After the initial scoping work, the transition to Wipro was managed in four distinct phases. Phase 1: Planning During the four-week planning phase, Wipro gathered information about the client's: Processes, operations, logs, checklists and tools After-office-hours operations and escalation system Call-registration and distribution system for each service window 11 September

3 Service levels and metrics Management information and reporting system Phase 2: Process Documentation The process documentation phase took about 10 weeks. A team that included a project manager and process specialist prepared a system maintenance technical manual that served as the framework/baseline document for all support activities. Phase 3: Implementation During the implementation phase, which lasted six weeks, Wipro augmented the on-site and offshore teams with additional resources to take over responsibility for full day-to-day operations and support activities. Phase 4: Sustenance In the sustenance phase (which is ongoing), Wipro delivers SLAbased 24x7 services, with on-site and offshore teams providing support for: Unix and Windows NT Web and application servers. Services cover installation and configuration, and administration for security certificates, monitoring logs, database connectivity, job creation, users, password management and file system management. DBA for DB2 and Oracle. Services provided are database creation, schema management, storage management, instance management, security management, backup, recovery, database tuning and database replication. Applications. Wipro provides: - 24x7 on-call support, and monitoring of nightly batch cycles and availability - Responses to service requests bug fixes, enhancements, development tasks, setting up new environments and analysis - Production hand-over activities between shifts The service windows are different for infrastructure and applications: Infrastructure support: - On-site: Noon to 8:30 p.m. EST - Offshore: 8:00 p.m. to 12:00 noon EST Applications support: 11 September

4 - On-site: 7:30 a.m. to 10:00 p.m. EST - Offshore: 10:00 p.m. to 7:30 a.m. EST Results: Since 2000, Wipro has been managing the production support operations of Web infrastructure management (applications, databases and Web/application servers). It uses a multisite delivery model with operations and support provided onsite or offshore according to the time of day. Not only does this enable 24x7 support, it also provides a more-cost-effective solution for the client. A 28-strong team (14 on-site and 14 offshore performing similar tasks) provides 24x7 support on-site on weekdays and offshore seven days a week for: Web servers (more than 120) and application servers (more than 80) DBA for DB2 (240 production and 440 test systems) and Oracle (66 production and 174 test systems) Twenty applications The client has achieved significant qualitative and quantitative benefits from outsourcing these support services to Wipro: The on-site/offshore model has enabled 24-hour working, which has resulted in overall cost reduction and productivity gains (estimated to be 35 percent). Not only have productivity and efficiency increased because of significantly better response time and uptime, but Wipro can deliver these with a smaller team size. The client is able to realize continuous improvements through techniques such as reviews at every phase, metrics collection and analysis, planning for the future and for training, using tools and new technology, and periodic audits and assessments. Key client resources were freed up for other strategic projects and initiatives. Moreover, the arrangement provides flexibility to the client in terms of resources and the mix-andmatch of skills and services available. Wipro can ramp-up resources quickly (more quickly than the client could have) in response to changing client requirements. Wipro has created a Web-based knowledge-management system that contains all of the information required for proper maintenance and support, and a Web-based task management system to capture all the project management work. This ensures continuity and person-independent services. Apart from the regular services, Wipro provides various value-added services, such as analyzing and evaluating 11 September

5 components used in the Web servers, and making recommendations for replacing/upgrading them; exploring possible problems that could arise while migrating Web servers and suggesting proactive measures to prevent them; and evaluating new components/products and making suggestions. Wipro also advises the client's development teams on performance and technology issues related to the Web and application servers. Finally, the client is impressed with Wipro's employees, perceiving them to be hardworking, responsive, respectful and easy to work with. People enjoy working with Wipro's staff. A summary of the benefits that have accrued to the client are shown in Figure 1. Figure 1 Benefits From Outsourcing to Wipro in India Attribute Nature of Team Location of Team Size of Team Service Window Uptime for Web Infrastructure Response Time Review Escalation Reports Feedback From Business Users Involvement of Business Team Annual Cost Prior to Using Wipro Not dedicated; overlapping responsibilities On-site 42 12x5 for production systems; 9x5 for development systems Not defined Two hours (95% of requests) Reactive and needs-based Defined, but not for all circumstances Escalation initiated manually Monthly and quarterly reports; incomplete coverage Manual, random, infrequent and not recorded Low and reactive $5.8 million (estimated) After Transition to Wipro Dedicated and focused On-site and offshore in India 28 24x7 for all systems 99.95% uptime for individual production servers; 98% uptime for development and application servers 30 minutes (95% of requests) Periodic (weekly and monthly) reviews with business team also Escalation matrix defined for all circumstances with clear norms and responsible persons Most escalation automated Daily, weekly, monthly and quarterly reports; covers all parameters of SLAs Quarterly structured feedback from all users, including business users, and review mechanism to improve service level through mid-course changes Periodic and proactive through regular review/ escalation process $3.1 million (including new 512 Kbps leased line between India and the United States) Source: Gartner Research Critical Success Factors/Lessons Learned: As in all offshore outsourcing deals, there have been challenges. Early challenges were knowledge acquisition and the creation of workable processes. The ongoing challenges include the logistics for managing two shifts in India and covering seamless handoffs 11 September

6 while still maintaining the SLAs. The most important lessons learned are: Commitment from the client, based on its continuous, longterm relationship with the offshore outsourcer, develops trust on both sides. The client should minimize the number of offshore providers by searching for the right partner(s) rather than many partners. The client is always the real project manager. It should retain these responsibilities for itself and focus on identifying work and planning for continuity, transferring application knowledge and holding periodic review meetings. The client should treat the offshore service provider's people as part of its own team/organization. It shouldn't just carve out a project and "throw it over the wall" to the service provider, which happens in many offshore deals. The knowledge transfer process is key. In this case study, the transfer was aided by the fact that the service provider had developed many of the applications. Bottom Line: This case study illustrates that it is possible to successfully provide 24x7 remote infrastructure support services from India. Not only has the deal been successful, but the client is now looking to expand this relationship to include additional infrastructure type services. We believe that many other customers will begin to employ remote infrastructure services during the next several years. By 2005, at least 30 percent of offshore deals that started with application services will include an infrastructure component (0.7 probability). 11 September