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Infrastructure Management Outsourcing

"He who does not learn from history is doomed to repeat it."
George Santayana

Ramachandran Srinivasan, Chief Technology Officer of Wipro, was part of the core team that set up the first remote infrastructure management center for India in 2000 at Bangalore Labs. Subsequently he joined Wipro to set up a remote management center called Global Command Center (GCC) in 2002. The second iteration in 2005, called GCCv2, won three innovation awards for its unique business innovation methods. The Wipro executive, who is also a core member of Wipro's Council for Industry Research, says remote infrastructure management outsourcing (RIMO) has evolved continually to meet buyers' needs, planting the seeds for innovative solutions to today's tricky IT challenges.

Back in the dark ages (the 1970s), companies used mainframes that operated in a centralized computing model. These big computers sat in chilled rooms with raised floors; users sat at terminals that had no local processing power. "Users had no processing capability, so they were completely dependent on the central computer," says Srinivasan.

The next generation of computing removed this dependency. The distributed computing model gave users some limited processing capability. While this gave users the much desired independence, it created its own challenges. "Companies discovered they now had some files stored on computers at the user level and some at the central level," the Wipro executive continues.

In addition, enterprises now needed someone to manage the IT infrastructure. They did this by purchasing infrastructure monitoring tools. At the same time they assembled a CIO organization comprised of subject matter experts (SMEs) who took care of the various facets of IT infrastructure such as desktop, server, network etc.

Why there was a need for outsourcing

However, there was one problem. "Say the enterprise was a bank. IT was never its core competency. Enterprises wanted specialists to manage their infrastructures. That's why infrastructure outsourcing became popular in the late 1990s," notes Srinivasan. He describes how the early engagements worked. A supplier sent a team to sit with the bank's team to manage the infrastructure. The supplier also supplied talent with specialized skills the bank couldn't find or afford to hire. Both groups reported to the CIO, who was still responsible for uptime and system availability.

"There was one problem with this model. The CIO needed to become strategic," says the Wipro executive. So the next step was to give system responsibility to the outsourcer. "But corporations only felt comfortable if the suppliers were nearby and under the nose. They wanted a local link," he continues.

By the early 2000s buyers became comfortable with an outsourcing supplier managing their infrastructure. Srinivasan says there was another reason that contributed to the rapid acceptance: cost pressure. "To save money, companies were willing to try suppliers in a different geography. At the same time, Indian suppliers were experimenting with remote infrastructure management (RIM)," he notes.

Offshore became a reality "when suppliers could assure their buyers their networks would be reliable, their spend would be significantly lower, and the quality of their monitoring and management would improve," say Srinivasan. In addition, offshore suppliers offered time zone advantages and better quality labor. The Wipro executive quotes a 2006 Gartner study which calculated the total RIM opportunity as US$96-$104 billion with India likely to capture $15 billion of that by 2013.

The emergence of Wipro's Global Command Center

Srinivasan says Wipro created the GCC "to remotely manage IT infrastructures for companies in the United States, Europe, and Japan in an efficient manner." The first client was a utility firm in Europe with 160 locations. Wipro managed its entire IT estate including server, network, operating system, and user/server administration from Bangalore. "We had a limited number of people based in Europe to manage the client relationship and emergency escalations. But 80 percent of the Wipro team was located in Bangalore," he reports.

Wipro created the GCC around four basic operating principles called the 4 Ps. They are:

• People. Highly-trained staff handles Level 1-3 problems. Wipro, which is CMM5 certified, focuses on people. "We create a clear roadmap and career path up front for the GCC engineers so they can move to their next level in the prescribed time. We monitor their essential skills and train them to achieve this goal," Srinivasan says.
• Process. The process gets the right attention at the right place at the right time. Quality is "an important strength and focus" for Wipro and "the core objective for every employee from top to bottom," according to Srinivasan. He points out Wipro was among the first RMC in the world to get certified on ITIL standard BS 15000 and on ISO 20000 when BS15000 became ISO standard.
• Product. This focuses on the latest technology for RIM. Wipro has a dedicated Engineering Service Process Automation (ESPA) team comprised of hand-picked R&D individuals "to ensure we always remain ahead with the highest standards for GCC's technology framework, which contains best-of-breed standard tools and some in-house developed ones," according to Srinivasan. He says the ESPA team's main focus is "to solve the current/future technology challenges of Wipro's customers."
• Partner. The Wipro executive says the company partners "with the right vendors to create a complete ecosystem so we are always on the edge of innovation. Our technology framework allows our partners to seamlessly use our call management system so that call assignment and call closure happens effortlessly." This enables Wipro to provide customers with transparent, end-to-end IT infrastructure management. "Our customers have clarity on where every call/ticket is at any given point in time," he reports.

The need for v2: data security, disparate management tools, business analysis

Wipro's initial success attracted additional customers. Now the supplier faced a new challenge. Enterprises had purchased enterprise management tools; once they invested in these products, they didn't want to scrap them. "Many times they spent millions of dollars on a tool they didn't know how to use. There's an IT saying, "A fool with a tool is still a fool." GCCv2 promised clients we would maximize the value of these tools to safeguard their investments," Srinivasan explains.

He says Wipro needed v2 because the supplier couldn't standardize its offering because different customers invested in different tools. "We stepped back and said, 'We're not married to any one tool. We are only here to solve our customers' problems.'" Wipro then created architectures for each tool so it didn't matter which tool its customers used.

There was a second issue that led to the creation of v2: data security. "Our buyers worried their data might accidently end up in a competitor's hands," he explains. When buyers queried other suppliers about their handling of data security, Srinivasan says "most suppliers said their staffs only dealt with technical data from the devices; business data was not important to them. They implied buyers didn't have to worry. But to us, that answer was not good enough." RIM requires server passwords at the highest level to carry out server/user administration tasks. "That means the supplier's staff still has access to the buyer's business data," he continues.

Wipro solved the problem by creating "sick device access only." Srinivasan explains Wipro manages thousands of infrastructure elements for one buyer. But at any one time, only a handful of devices are down. "Our engineers only get access to those devices," he explains.

Here's how it works. An engineer in Bangalore gets a trouble ticket. Wipro masks all information about that device so the engineer doesn't even know the customer. The engineer resolves the situation. The passwords, however, reside in a password vault. "When we get a trouble ticket, the software checks the legitimacy of the request and then sends the correct password from the vault to a login screen. The engineer gets access to the device without ever knowing the password. I think this is the most captivating feature of GCCv2," says Srinivasan.

How does GCCv2 handle staffing skills to handle a variety of operating systems? Srinivasan explains Wipro engineers have to be proficient in the hundreds of operating systems, databases, shrink-wrapped applications, and networks its buyers use so they can fix problems. "It was becoming a mammoth task to hire people with different skills and staff them 24x7. Being tool agnostic, we had to come up with a way to be able to handle situations at any level in any operating system/DB/shrink-wrapped application in an efficient way," he says.

To do that, Wipro assembled a crack team of SMEs to study the supplier's error ticket database to understand the common problems in each stream. They searched for the problems that caused 80 percent of the error tickets, then compared them across technologies/streams. "They discovered the problems were the same regardless of the streams," says Srinivasan.

Using that information, Wipro created IT Operations Control with a user-friendly graphic user interface (GUI). The software uses an easy-to-use interface so the engineers don't need to know the technical commands for each operating system or database, allowing them to complete a task by a click of a button. "This consolidation eliminated the need to train engineers in hundreds of systems. It is the virtualization of IT operations," says Srinivasan.

V2 also helped the business side of the enterprise. "We provide a lot of data to our buyers, but is it useful? We realize our buyers use IT to enable their businesses," says Srinivasan. The answer was the creation of a business-impact dashboard. "The buyer can drill down to see which IT element is causing a problem for a business unit," he continues.

For example, most companies do a payroll at the end of the month. The business would give a trouble ticket in the payroll server highest priority at the end of the month and lower priority during the first three weeks.

Using this knowledge to help non-IT domains

In 2006 Wipro decided to extend its IT framework to manage non-IT devices in other verticals. The supplier looked at retail, for example, and discovered that retailers managed their business domain devices (point-of-sale, kiosks, queue busters, etc.) in a stock-more-and-replace model. For example, the supplier noticed point solutions existed for monitoring the temperature in cold storage units or managing facilities' HVACs or vending machines. "There was no integrated, mature model like IT infrastructure management. We felt we could provide major value by introducing the maturity of the IT model into the non-IT world. We think the potential is huge," says Srinivasan.

Wipro decided to explore three verticals: retail, healthcare, and building management and then developed methodologies to manage them remotely. "We hired domain specialists to join our IT teams, the Wipro executive says.

What's next?

Over the last few years, the scope of work buyers are outsourcing to Wipro has increased substantially. Srinivasan says buyers "are now comfortable in giving us their entire IT management." He says Wipro recently won large multiple total outsourcing contracts, which require the supplier to deliver IT services end to end. "This requires us to have a comprehensive delivery platform that can provide entire business service management, including event management, ITIL compliant service management, a CMDB, a governance layer, dashboard reports, and run book automation."

New demands from customers include supporting multilingual sites for non-English-speaking countries and operating an intercontinental disaster recovery site. "We are baking these requirements into our delivery platform and they should be available to our customers in the coming fiscal year," reports Srinivasan.

RIM has evolved, moving from a FTE-based or cost-plus pricing model to an element-based / outcome-based (SLA) pricing model. "More future contracts will be outcome based. Our customers will want us to be a partner in their business instead of being a supplier, Srinivasan says. In India, Wipro already has such a model with Aircel, one of the large total outsourcing deals in recent times.

In the next couple of years, Wipro might move its non-critical applications to the cloud.

Innovation

Innovation is the key differentiator for companies to sustain competitive advantage in a dynamic business environment. Innovators such as the global command center help address customers' pain points and transform the way businesses run.

Wipro has an Innovation Council to foster such innovations. Various business units and employees come up with ideas. It also accepts ideas from employees. The council studies all the ideas and decides which ones to fund. When the project is ready, the supplier lets its business unit centers of excellence support a few customers before rolling it out as a line of business.

Lessons from the Outsourcing Journal:

• How safe is your business data when you outsource? Wipro has devised a "sick device access only" process that allows its engineers to repair infrastructure processes without its engineers knowing passwords or even who the customer is.
• What's the best way to solve a business problem? Wipro had to manage multiple customers that invested in expensive management tools. It knew it was not cost effective to hire SMEs for every operating system, database, or application. So it analyzed its problem ticket database and discovered the same problems cropped up 80 percent of the time across all the tools. Then it developed the IT Operations Control -- an interface to the solutions its engineers need.
• What's the best way to innovate? Wipro believes it's to set up an innovation council to foster innovations that can bloom within the company. The council encourages business units and employees to come up with ideas.

About the Wipro Council for Industry Research: Wipro set up the Council, comprised of domain and technology experts from the organization, to address the needs of customers. It specifically looks at innovative strategies that help them gain competitive advantage in the market. The Council in collaboration with leading academic institutions and industry bodies studies market trends to equip organizations with insights that facilitate their IT and business strategies.

Publish Date: March 2009

Copyright © 2009 - Everest Partners, L.P.

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