project report on remote it infrastructure management
DESCRIPTION
Remote Infrastructure Management Services ensure that enterprises enjoy an effective, efficient and productive IT infrastructure operation, while optimizing its investments in technology, people and processes and guaranteeing greater quality and increased end user delight.TRANSCRIPT
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Project Report
TOPIC:
“REMOTE IT Infrastructure Management ”
Project Guide: Mr. D.P. Goyal IMT, Ghaziabad
Prepared By: P.R Jairaman EM- 04037 PGDBM (P/T)-2004-2007
Institute Of Management Technology Post Box No: 137 , Raj Nagar
Ghaziabad (U.P) 201001
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1. Abstract
The recently launched NASSCOM-McKinsey Report 2006 yet again reaffirmed views of the
global gurus that Remote Infrastructure Management (RIM) Services are all set to become the
next star of the Indian IT Industry. It clearly states that “going forward, the more traditional IT
outsourcing service lines such as hardware and software maintenance, network administration and
help desk services will account for 45 per cent of the total addressable market for offshoring and
are likely to drive the next wave of growth. . Service lines that have driven recent growth, i.e.,
application development and maintenance (ADM) and R&D services are already 30-35 %
penetrated and are not as likely to grow dramatically”.
The Remote/offshore part was easy with BPO having already paved the way for proving service
delivery effectiveness from an offshore location and with the advent of sophisticated tools and
technologies that enabled remote IT management the proposition was further solidified.
International research firm IDC also declared that “more than 85% of infrastructure components
can be managed from a central remote location. These components encompass servers/systems,
databases, networks, storage, security, applications and e-business infrastructure. Through
managing these components from a remote location, companies can cut down their cost of
infrastructure operations and management by 40-60 %, also gaining access to expert ‘skill-on-tap’
on a 24x7 basis”
For decades the global giants who had been ruling the Infrastructure Management Services (IMS)
market boasted of a very rigid model of service delivery to companies; which is often termed as
the ‘Traditional IT Outsourcing Model’. In the traditional outsourcing model, a third party service
provider would take over the entire IT assets of an organization and run it with a combination of
on-site and near-shore services. This approach came with a ‘lock-stock-and barrel’ proposition,
wherein the entire IT operation was handed to an outside provider with complete loss of control
and flexibility on the part of the CIO.
Remote Infrastructure Management Services ensure that enterprises enjoy an effective, efficient
and productive IT infrastructure operation, while optimizing its investments in technology,
people and processes and guaranteeing greater quality and increased end user delight.
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2. Declaration This Project Report is submitted in total fulfillment of the requirements for PGDBM
(P/T) at IMT, Ghaziabad. I declare that this Project Report is my own work and that it
does not contravene any academic offence as specified in the University's regulations.
No portion of the work presented in this report has been submitted in support of another
award or qualification at either of the partner institutions or elsewhere.
I confirm that all this work is my own except where indicated, and that I have:
Clearly referenced/ listed all sources, as appropriate
Referenced and put in inverted commas all quoted text (from books, web, etc)
Given the sources of all pictures, data etc. that are not my own
Not made any use of the report(s) or essay(s) of any other student(s) either past or present
Not sought or used the help of any external professional agencies for the work
Acknowledged in appropriate places any help that I have received from others (e.g.
fellow students, technicians, statisticians, external sources)
I understand that any false claim for this work will be penalized in accordance with the
University regulations.
Confidentiality I confirm that this Project Report does not contain information of a commercial or
confidential nature or include personal information other than that which would normally
be in the public domain unless the relevant permissions have been obtained.
Copyright The copyright for this Project Report remains with me.
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3. Acknowledgements
The inputs obtained from the consultations and researches were used as the basis for
arriving at the recommendations on the road map for the proposed Remote IT
Infrastructure Management – A revolutionary Mega trend in the field of IT Infrastructure
Management: Research Project.
I wish to express our sincere gratitude and indebtedness to our course instructor Prof.
D.P. Goyal for his invaluable guidance and support throughout the course of this
project. His able mentorship was instrumental in the successful completion of the project.
I would also like to thank all my friends and classmates and colleagues who helped me
whenever I needed them and enriched my work with their invaluable suggestions.
I also wish to express my gratitude to my colleague Mr Atul Kumbhkarni for his valuable
suggestions which helped in enriching this Research Project.
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4. Contents 1. Abstract ........................................................................................................................... 2 2. Declaration...................................................................................................................... 3 3. Acknowledgements......................................................................................................... 4 4. Contents .......................................................................................................................... 5 5. Introduction..................................................................................................................... 6
Outsourcing to India can be categorized in the following manner: ................................ 6 Infrastructure outsourcing representing almost 1/3rd of the total outsourcing market... 6 5.1: Approach to Assignment: ........................................................................................ 7
6. REMOTE INFRASTRUCTURE MANAGEMENT...................................................... 8 6.1: Evolution of RIM..................................................................................................... 8
6.1.1: Maturity of the offshoring (Global Delivery) model: ....................................... 8 6.1.2: Technical feasibility:......................................................................................... 9
6.2: The Existing Scenario.............................................................................................. 9 6.2.1: Remote Infrastructure Management Services................................................. 10
6.3 Why Remote Infrastructure Management:.............................................................. 12 6.4 Growth Aspects:.................................................................................................. 13
7. Sourcing Models Prevalent ........................................................................................... 15 8. RIM – The India Advantage .......................................................................................... 18
Manpower: ................................................................................................................ 18 Location : .................................................................................................................. 18 Infrastructure:............................................................................................................ 18
8.1 RIM – Beyond a niche IT space: a great career opportunity .................................. 18 8.2 The Road Ahead ..................................................................................................... 21 RIM Adoption Scenarios: ............................................................................................. 21
9.Competitor Tracking ...................................................................................................... 23 9.1 Global Delivery Infrastructure Management Evaluation........................................ 26 9.3 INDIAN VENDORS REPRESENT A VIABLE OPTION.................................... 27 VENDOR PROFILES .................................................................................................. 28
9.3.1 TCS. ................................................................................................................. 28 9.3.2 Wipro. .............................................................................................................. 33 9.3.3 Infosys Technologies ....................................................................................... 37 9.3.4 HCL Technologies. .......................................................................................... 41
9.4 Latest figures disclosed during Jan-Apr 2007 ........................................................ 43 10. Methodology............................................................................................................... 44 11 References.................................................................................................................... 45
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5. Introduction The scope of this project aims to understand a new trend in the field of IT Infrastructure
Management called Remote IT Infrastructure Management, which usually caters to the
needs of large organisations having a Global Presence, by managing their IT
Infrastructure remotely.
Infrastructure Management Services encompasses a broad range of services. It refers to
monitoring and management which includes maintenance, administration,
troubleshooting, and performance enhancement of the IT Infrastructure of any
organization. It covers the entire spectrum of the IT Infrastructure including helpdesk,
End User Desktops, sever and storage, databases, telecoms, Network, Security,
Application Operations et al.
Infrastructure Management Services is not a new phenomenon, for several years,
companies have been working hard to reduce the cost of operating the IT Infrastructure –
Datacenters, networks, databases, and business support software tools. The customers
who were early adopters of IMS were driven by the need to focus on their core
competencies and give away the non core functions to service providers. This was the
genesis of some early service providers like EDS, IBM etc.
Outsourcing to India can be categorized in the following manner:
Infrastructure outsourcing representing almost 1/3rd of the total outsourcing market.
43%
33%
0
0.1
0.2
0.3
0.4
0.5
IT Infrastructure IT ADM G&A outsourcing
Estimated worldwide outsourcing market size2005; Percentage
100% = ~US$328 billion
Business Process Outsourcing
Infrastructure Outsourcing
Application Development and Maintenance1
24%
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5.1: Approach to Assignment:
The first stage of the assignment, involving the design of a road map for the planned research project was executed primarily through interactions with key people at HCL Technologies, one of India’s Premier IT Services Provider.
• Identify the key objectives of their Infrastructure Services Division. • Determine the main functions, structure of the and its branches/ units. • Assess the current state of ICT infrastructure services scenario in India.
Secondary research was conducted to identify the best practices used in a similar context elsewhere – domestic. HCL’s proprietary knowledge base and experience gained through many years of involvement in complex organisation wide operations effectiveness initiatives with various organisations across the globe were leveraged to identify the prevalent practices in similar organisations and in HCL itself. The inputs obtained from these consultations and researches were used as the basis for arriving at the recommendations on the road map for the proposed Research Project to be submitted in complete fulfillment of the requirements for PGDBM (P/T) at IMT, Ghaziabad .
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6. REMOTE INFRASTRUCTURE MANAGEMENT Remote Infrastructure Management services consist of remote (outside the physical
premises of a company’s facilities) monitoring and managing the infrastructure
components and taking proactive steps and remedial actions across the IT landscape. The
remote monitoring and management is undertaken through a combination of
offshore/nearshore/global delivery center which is often termed as an Offshore
Management Center (OMC), where skilled staff of a service provider monitor and
manage the infrastructure, ensuring uptimes and availability.
Some of Infrastructure management services that can be delivered remotely are Network
Management Services, Datacenter Outsourcing, Helpdesk outsourcing, Desktop
Outsourcing, Storage outsourcing, IT Security Outsourcing, LAN outsourcing, WAN
outsourcing, Database and Application Monitoring & Management.
6.1: Evolution of RIM Gartner Inc., a business intelligence firm, had indicated in its research that around 32% of
a CIO’s IT budget was spent on internal resources to monitor and manage IT. This area,
being a significant chunk, was also the area that required immediate decline.
Once IMS outsourcing became a norm, RIM followed as a natural progression, offering
an alternate model of delivery. Some of the key factors that have acted as a catalyst for
the RIM being accepted worldwide are:
6.1.1: Maturity of the offshoring (Global Delivery) model: As companies face continued pressure to cut costs, they have started including
infrastructure-related opportunities in their offshoring requirements. This also allows the
customer to gain from the scale of operation as is evident from the various multi service
deals that have been won by India based Service Providers. ABN Amro deal with Wipro
being the biggest.
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6.1.2: Technical feasibility: The myth that a IMS outsourcing is associated and bundled with the physical assets of the
IT department and the Datacenter and therefore precludes offshore delivery has been
broken. It is estimated that between 60-70% of the IT services surrounding the
datacenter, specifically the support functions of monitoring and management can be
executed remotely due to the improvements in the remote-monitoring and diagnostic
capabilities of leading System and Network management tools.
Reasons like emergence of Business Continuity Services, globalization, increased
awareness of RIM market and availability of low cost countries is forcing buyers to think
of new ways to service users 24x7 across the globe while increasing efficiency and
effectiveness. Moreover organisations are opting for RIM due to advanced security
technologies to mitigate risk due to offshoring. But foremost, Indian companies striving
to move beyond application services and repeat their success in new
opportunities/markets like RIM.
6.2: The Existing Scenario With the advancement in processes and tools and the proven maturity of Global Delivery
for IT Infrastructure Services, today RIM is becoming a strategy of choice for CIOs
across the globe who are keen to take advantage of the labor arbitrage without
compromising on quality and responsiveness of services.
Today, Offshore vendors have started to invest aggressively both in infrastructure talent
and highly available network connectivity globally. At the same time, automation tools,
more effective processes, and onshore consolidation efforts have made corporate IT
departments increasingly comfortable with locating more of their infrastructure
support personnel remotely from assets and users.
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Infrastructure Outsourcing market: Representing All PlayersInfrastructure Outsourcing market: Representing All Players 2005; Percentage
100% = US$109 billion = US$109 billion
24%
1%
75%
RIMO
IMS
Traditional IO
6.2.1: Remote Infrastructure Management Services Desk Management
Call Management
Escalation Management
Change Management
Email And Tele Support
Hardware/System Maintenance
Troubleshooting
Health Checks
Performance Fine Tuning
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Other Features That Are A Part Of RIM Are
System Administration
Software Installation
Configuration And Maintenance
Security remediation
Backups/Restores
Network Monitoring And Management
Basic Reporting
Advanced Services And Intrusion Detection Services
Database Management
Performance Analysis
Bench Marking And Testing
Data Back-up Management
Managed Information Security Services
Policy Management
Asset Management
Capacity Planning
Vendor Management Services
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6.3 Why Remote Infrastructure Management:
• Remote Infrastructure Management Services (RIM) is evolving at quick pace.
According to IDC, in a study, estimated that more than 85% of infrastructure
components can be managed from remote locations.
• Service providers are doing big ticket investments to develop their delivery
capabilities.
• In next 2-3 years large clients will be expected to deliver remote infrastructure
delivery service as a requirement in the majority of new outsourcing deals
• Infrastructure services delivered in a global delivery model from India to US
companies will surpass $1 billion.
• RIM presently contains high risk for global delivery of services. But clients
are relying on service providers to help manage and insulate them from risks.
• High probability that in next 5 years 50% of the labor hours for global IT
infrastructure service delivery will shift from on-site support to remote
delivery.
• Increased globalization of organisation hence need for 24X 7 Services.
• Low cost geographies like Indian with robust Infrastructure and Human
Capital capabilities.
• Advanced Security Technologies to mitigate risk due to offshoring.
• Pro-active management by means of enterprise management tools.
• Emergence of Business Continuity services.
• Need for repeatable, replicable service based on ITIL Model.
(ITIL: IT Information Library)
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6.4 Growth Aspects:
IMO market shares3
Percentage
US$460M1
US$720M2
Others
100%= 100%=~US$26 billion
Infrastructure Management Outsourcing market
2010; percentage
Offshore suppliers (RIMO model1)
Traditional suppliers
(IMS model)
Wipro
TCS
HCL
Infosys
Satyam
20% 21%
17% 19%
16%
13%14%
11%6%
4% 3%2% 3%
19% 18%
14%
FY 2004 FY 2005
PatniMicroland
97%
3%
Representing local (offshore) players.
Traditional suppliers (IMS model)
Offshore suppliers (RIMO model)
20%
80%
0%
20%
40%
60%
80%
100%
Infr
astr
uctu
re M
anag
emen
t O
utso
urci
ng m
arke
t 20
05; P
erce
ntag
e
14
Traditional suppliers (IMS model)
Offshore suppliers (RIM model)
10% CAGR
RIMO market growth
US$ billion
~60%
0.5 0.81.4
2.3
3.7
5.9
8.6
2004 2005 2006 2007 2008 2009 2010
25 26 28 30 32 35 37
2.33.7
5.98.6
1.40.80.5
2004 2005 2006 2007 2008 2009 2010
61%
7% CAGR
26 27 29
32 36
4146
Cur
rent
ann
ual G
row
th R
ate
com
pari
ng T
otal
Out
sour
cing
Su
pplie
rs a
nd R
emot
e Su
pplie
rs.
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7. Sourcing Models Prevalent Model 1: Global Outsourcing Under this broadest outsourcing model, client companies effectively hand off the entire
IT department to the service provider. In this case, most firms retain only a reduced IT
management organization. Nowadays, this approach has become increasingly
uncommon. Some companies in the US and the UK, in particular, opt for this model, but
their Continental European counterparts rarely go down this path. The approach only
makes sense when the client company already has a global outsourcing strategy, not only
for IT, but also for other activities. In some cases, the client company and the service
provider create a joint venture that hosts the former IT department. The two most
common brakes are depending on a single service provider and lack of experience or
confidence in creating a joint venture. Global outsourcing should be aligned with the
buyer company’s strategy: It makes sense when the enterprise — looking beyond just IT
— massively outsources all noncore-business activities and very specialized processes. A
proportion of such deals rely on the client and service provider forming a joint venture to
ease asset and staff transfer and limit potential regulatory issues.
Model 2: Infrastructure Outsourcing Rather than opt for global outsourcing, many companies have found it easier to isolate
and outsource only their IT infrastructure. Workplace management (desktop and laptop
management) is usually subject to a separate contract, either with the same or with a
different services firm. In the meantime, they retain their applications under in-house
management. As for global outsourcing, this approach requires specific preparation for
the staff transfer when the relationship first begins, and the joint venture approach crops
up frequently to ease asset and staff transfer. Separating infrastructure and applications
requires stable and well-defined processes supporting interfaces between infrastructure
management and application management.
Model 3: Vertical Outsourcing This model involves outsourcing a vertical stack of technology elements devoted to a
specific activity within the client company. Workplace management can be one of these
vertical activities. When they separate systems in this way, companies can also consider
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outsourcing the associated business process — as in business proce
his is the business of specialists (payroll managem
ss outsourcing (BPO).
ent, logistics, check processing,
ccess of this model is related to BPO growth — which
operations. Integrating
rvices in this case requires a solid management effort, with a significant internal team.
ice integration task to one of the outsourcing
me applications under in-house management.
ithout suffering the complexities of the best-of-breed approach, companies can select
. Also, many companies that opt for this model keep
T
call/support centers, etc). The su
differs dramatically between the US/UK and Continental Europe. The typical
relationship involves significant staff transfer to the service provider.
Model 4: Best-Of-Breed Selective Outsourcing Selective outsourcing currently dominates the market. Many companies expect better
results when they select the best service partner within each specific service category.
These companies customarily separate: hardware and operating systems (mainframes,
servers and Unix, servers and Windows); the main middleware categories (like security
management, storage management, collaborative tools and messaging, and integration
tools); and application categories (generally vertically). Some companies fragment even
further: They establish a separate outsourcing relationship for each of the following
domains according to the expertise of the provider: system management (hardware and
operating system) and hardware maintenance; application testing, maintenance, and
operations; and middleware customization, management, and
se
A few companies outsource this serv
providers or an external consulting firm. Eg, ING has retained Accenture to lead several
other service providers in a workplace services environment. Companies that opt for the
selective sourcing approach must have the right evaluation criteria to effectively select
best-of-breed vendors, domain by domain.
Model 5: Combined Infrastructure And Vertical Applications In this model, companies select a single service provider for infrastructure management
— or two when workplace management is separated — and several specialists for
application management, while retaining so
W
key partners for vertical domains
some strategic applications internal, for example R&D and CAD/CAM software in the
aerospace and automotive industry, or financial asset management in the banking
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industry. In this model, the ability of service providers to work together, and the ability of
the client to control them, remains a challenge
Model 6: Horizontal Outsourcing In this model, companies select a single service provider for application management
(developing, maintaining, and running applications) and another one for infrastructure
t is separated. This situation is often a management — two if the workplace managemen
second phase after infrastructure outsourcing (Model 2). Some people consider this
model a variant of Model 5, pushed to the extreme. This strategy requires selecting the
rare services firm that is able to cover all the vertical specificities of the client. However,
some service providers have built application centers able to deliver all the applications
services, backed up by expertise centers.6 The main challenge of this model is the ability
of the two service providers (handling infrastructure and apps, respectively) to work
together, with limited client arbitrage. Few outsourcing clients currently pursue this
approach.
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8. RIM – The India Advantage Manpower:
India has highly skilled labour pool which has ability to cater to global clientele. India
has witnessed a healthy growth in the number of its IT professionals. From a base of
6,800 knowledge workers in 1985-86, the number is projected to increase to 650,000 IT
software and services professionals by March 2003. It is estimated that out of the 650,000
knowledge workers, almost 205,000 are working in the IT software and services export
industry; nearly 160,000 are working in IT enabled services 25,000 in the domestic
software market and over 260,000 in user organizations.
Location :
Low cost, easy accessibility of India as a location and emerging centers of excellence
with multiple cosmopolitan cities is another very significant pull factor for India as a
destination of choice.
frastructure:In
he Indian telecom industry is one of the fastest growing industries. With the entry of
lobal players there has been tremendous infusion of capital and creation of best of breed
infrastructure. India’s capability, experience and depth in this space has challenged the
traditional IT service providers across and range of services.
8.1 RIM – Beyond a niche IT space: a great career opportunity
One of the important drivers that make RIM an attractive career is the exciting and
challenging environment it offers to professionals.
A career in the Remote Infrastructure Industry also offers a continuous learning curve to
its practitioners. Being responsible for 24X7X365 monitoring and management of IT
Infrastructures of global enterprises RIM experts have to consistently upgrade their
knowledge and grasp of new technologies entering the IT Infra space. Our employees
have to keep themselves abreast of the new as well as legacy technologies, thus ensuring
a continuous process of learning and growth inside the system.
T
g
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Further, it gives a graduate engineer an opportunity to earn anywhere between 5-7 lakhs
after a reasonable level of experience and grow to the level of a Manager or Consultant in
span of 5 years through focused growth programs. For experienced
professionals, the compensation is even more attractive and the growth opportunities
nds and shrinking budgets. The
to evolve an IT infrastructure management strategy that leverages existing
eyond costs that RIM brings.
er satisfaction:
•
Risk Mitigation:
Inc
Shi
• To support customers’ transformational objectives
a very short
include leading worldwide Projects and Technology practices.
There are many such unique aspects of this Industry which translates into a ‘hot’ career
aspect for IT professionals.
Benefits
Cost reduction has been a driver for decades in the IT infrastructure space as CIOs
around the world continue to face increasing user dema
challenge is
investments, with increased service levels for end-users, improved end-user response
time through proactive management, and increased flexibility at reduced costs.
But there are benefits b
Increased custom
• Shift from reactive to proactive management through increased automation and
reduced human intervention.
• Measurable metrics to track service levels
Real time control and visibility into the operations through reporting portals
• People independent operations
• Focus on creating DR Operation Centers and processes that ensure business
continuity
rease coverage to 24x7:
• Clients seek 24X7 Follow-The-Sun Model coverage and global footprint
ft from Technology to Business Optimization
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Red
Fle
of outsourcing a specific
and cost predictability making companies more agile.
Qu ge
Dom
s access to experts on a 24X7 basis.
constantly updated with the latest technology trends
and the customer benefits from this “expertise on tap”
stomer retains control of its strategic
components such as physical IT assets, technology refresh, policy and architecture
. This visibility further enables them to take control of the situation, make
estments in IT, and improve current service levels.
under tough, black and white and precise service level agreements, with
pliance and downtimes.
uce IT budgets hence impacting the bottom-line
• Concerns regarding enhancing service levels with no increase in IT Budgets
xibility
• Through the Co-Sourcing model, enterprises have an option
function, several functions or entering the engagement in phases. This provides
clients greater scalability
ality and Process ed
• Quality technology, people and processes defined by ITIL (IT Infrastructure Library),
which ensures faster problem resolution. In addition to these standards, a known
knowledge base of errors and standard operating processes provide continuous
learning and ensure that the problems get the attention of the right expert,
ain expertise and dedicated skill-set
• A good RIM service provider gives the customer
Moreover, these specialists are
Visibility and Control:
• Through collaborative sourcing the cu
which provides visibility into the availability, performance and utilization of each
component
informed decisions on future inv
SLAs and Best Practices
• RIM works
penalties on Non-Com
These value propositions result to two distinct demands of customers:
1. Cost Reduction (30%-40% app)
2. Optimization that leads to transformation
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8.2 The Road Ahead More and more global enterprises are seeking transformational benefits like those being
provided by vendors like HCL from their existing outsourcing partners. Also, the sheer
of such offshoring deals will see a rise with a number of large engagements
se IT transformation and provider of transparency into IT
bler of the enterprise IT transformation through
buyers to consider RIM as an
alternative to full-scale Infrastructure Outsourcing including lower
degree of misalignment of supplier incentives around cost-cutting
Both offshore and traditional suppliers realize the opportunity and
ctively invest in missing pieces of the puzzle by ramping up their
number
coming up for renewal in the next 2 years.
RIM Adoption Scenarios:
RIM market adoption can follow several scenarios, ranging from pure labor arbitrage to
enabler of the enterpri
infrastructure.
RIM can continue growing based purely on a labor-arbitrage business
model similar to Application Development and Maintenance (ADM)
Outsourcing.
RIM can become an ena
IMO suppliers expanding their capabilities into the consulting part of the
IT transformation business.
Several factors are likely to attract
and asset- reductions, ability to retain IT assets still enjoying the
advantage of productivity improvement and labor arbitrage, and
better applicability of IMO model to support new and emerging
technologies due to non-asset-oriented nature
a
efforts and capabilities
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IMO suppliers can leverage their knowledge of buyers’ operations and cross capabilities
and IT is complicated by the presence of two
disconnects:
disconnect between business process and supporting IT systems
disconnect between business and IT workloads leading to lack of
understanding of IT efforts and costs by the business
f Service-Oriented Architecture (SOA) and multiple IT
transparency frameworks (e.g., IT Service Catalog)
great deal about the buyer’s infrastructure and
become well-positioned to tackle the business/IT transparency
to offer business users additional value from transparency into IT infrastructure
Linkage of business
leading to unnecessary complexity in conducting business tasks
The technical solutions to these disconnects are emerging in the
form o
By taking on monitoring and remote-management functions, IMO
suppliers can learn a
challenge
23
9.Competitor Tracking Indian Market Scenario
Major pla
the US are als in India.
These 4 playe d
are categorized based on their service offerings in the Europe Market.
While outsou
companies re
over the past 18 m warm to the idea of moving selected infrastructure
management tasks to offshore or nearshore locations. The underlying aim is clear: By
adding the offshore labor arbitrage to the equation, clients are hoping to reap further cost
benefits from infrastructure outsourcing. During recent months, the two types of service
providers — large, traditional on-site outsourcers and Indian offshore service
providers — have been busy ramping up their remote infrastructure management
resources and capabilities.
Encouraged by the early successes of their remote infrastructure service offerings across
North America, Indian vendors are now setting their sights on Europe. To achieve rapid
growth in what still constitutes an emerging market, Indian service providers have made
significant investments in the necessary resources and capabilities; this makes
transitioning selected infrastructure management tasks to their control a sound and viable
proposition.
yers in the Indian Market targeting the top companies in EMEA, APAC, and
o the top players in IT
Infosys
Wipro Technologies
TCS
HCL Technologies
rs provide a range of offerings in IT Infrastructure Management an
rcing across Europe has become an accepted approach for helping
duce their infrastructure management costs, European clients have begun,
onths, to
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Physical infrastructure management resources have been established.
dian offshore providers have invested heavily in their data centers, network operation
training centers for infrastructure management staff. Most of
orks.
Remote ma ties have evolved.
The great m established strong ties with the leading
systems m the latest versions of their remote
management technologies. In addition, most Indian providers have invested in
compleme s to enhance the transparency of their
rvice delivery.
Most of the leading Indian vendors have become fairly proficient in infrastructure
Local support and recovery functions are being set up.
ognize the critical need to maintain a strong
local delivery and customer management presence across Europe. Most companies,
IT operations. While application services
like custom development and software maintenance are currently the main source of
revenues for offshore providers today, European end users have started to show
In
centers (NOCs), as well as
the data centers and NOCs today use state-of-the art equipment and are linked to highly
redundant and reliable telecommunication netw
nagement capabili
ajority of the Indian vendors have
anagement tool vendors to leverage
ntary reporting tools and dashboard
se
Infrastructure delivery expertise has matured.
services delivery and are seeking ways to optimize operations in the same way that they
optimize applications. To this end and to develop credibility and capability, they have
made significant investments in resources and processes around the IT Infrastructure
Library (ITIL) and the BS 15000 IT Service Management Standard. Furthermore, some
companies are leveraging Six Sigma to drive continuous improvement of their end-to-end
service delivery
All of the Indian service providers today rec
therefore, have invested in additional local language support and operation centers,
mainly across Eastern Europe. In addition, most vendors will provide on-site support
services through their own personnel or through dedicated local partners.
European firms continue to grow their use of offshore outsourcing as an effective way
to achieve cost savings and build successful
25
significant interest in remote infrastructure services over the past 18 months.
ing engagements.
vendors to help them with smaller
ing small selected remote management tasks.
onitoring and management tasks for
desktops, servers, mainframes, and network components in limited numbers to Indian
tsourcing help desk operations to Indian providers. Unless they can be
cal language skills to support
their end users, most companies will want to avoid any potential cultural or language
om transferring
Nevertheless, Forrester does not foresee European companies rushing into large offshore
infrastructure engagements with Indian vendors, but expects them to apply a more
cautious step-by-step approach. As a result, many European clients will be:
Testing the water via on-site infrastructure consult
Many European companies will start using Indian
consulting projects related to their existing infrastructure operations. These engagements
will, for example, provide assessments of the client’s existing infrastructure management
processes and contrast them with a best practices view based on the operational service
management expertise that Indian vendors can provide.
Initially outsourc
Clients will initially look to outsource confined m
vendors. As part of their selective outsourcing strategies, most clients will thereby
separate the remote management from the physical maintenance of the devices, which is
likely to remain with local providers.
Showing caution around outsourcing help desk operations.
While theoretically well suited for offshore delivery, European clients will be extremely
cautious about ou
convinced that the vendor in question offers very good lo
issues.
Not transferring staff to Indian vendors.
Although some Indian providers have successfully taken over limited numbers of staff
from their European clients in the past, most companies will refrain fr
employees to Indian vendors. The perceived cultural integration issues will present too
much of an obstacle.
26
9.1 Global Delivery Infrastructure Management Evaluation
OVERVIEW
To assess the state of the global delivery infrastructure management market for Europe
trengths and
disaster recovery capabilities, as
anagement.
Furthermore, we looked at delivery capabilities from both the operational and support
vision to assess how well
each vendor is positioned for future success, a focus on the vendors’ underlying
n remote infrastructure revenues and underlying revenue growth, the number and
nearshore resources, and the
number of desktops, servers, mainframes and network devices managed in Europe from
and see how the Indian service providers stack up against each other, the s
weaknesses of top Indian vendors are evaluated.
Current offering.
As a framework for the evaluation we looked at various service elements —
the underlying breadth of service offerings, security and
well as offerings pertaining to consolidation, virtualization, and service m
perspective of the global delivery model, as well as network bandwidth and redundance.
Finally, with regard to languages, on-site and nearshore support, as well as compliance
with the European data protection directive are assessed.
Strategy.
Comparing the RIM service strategies of each company with a
infrastructure vision and productivity investments, their commitment to adaptive sourcing
and partnerships, as well as their asset and staff transfer strategies is done.
Market presence.
Europea
typical profile of accounts across Europe that use offshore or
an offshore or nearshore location are compared.
27
9.3 INDIAN VENDORS REPRESENT A VIABLE OPTION
HCL, TCS, Wipro, and Infosys lead the pack.
HCL differentiates based on its deep infrastructure management expertise and innovative
anagement portfolio,
with significant resources dedicated to Europe. Wipro has the strongest European market
has already started to push beyond pure remote outsourcing.
anks to its
sophisticated business-centric delivery approach.
r broader infrastructure and
deals, but needs to grow its European market footprint.
services strategy, while TCS maintains the broadest infrastructure m
presence today and
Meanwhile, Infosys is building up some strong growth momentum th
Genpact, Satyam, and Patni offer competitive options.
Genpact is a strong performer with high-quality delivery processes and a sizable
European presence. Satyam benefits from its holistic services approach across
infrastructure, applications, and business processes, although the company still lacks a
European presence. Finally, Patni positions itself fo
application
28
VENDOR PROFILES
Leaders
9.3.1 TCS. TCS offers the broadest portfolio of infrastructure-related services across the plan-
buildrun value chain, with telecom infrastructure management tagged on as an added
bonus. The company maintains strong technical domain knowledge and a good ability to
support diverse technical domains. European clients will benefit from TCS’ strong local
presence, with various nearshore and onsite support centers providing multilingual
he Group's 28 publicly listed enterprises have a combined market capitalization that is
the highest among Indian business houses in the private sector, and a shareholder base of
over 2 million. The Tata Group has operations in more than 54 countries across six
continents, and its companies export products and services to 120 nations.
The Tata Group comprises 96 operating companies in seven business sectors
Information systems & communications
Engineering
Materials
Services
Energy
Chemicals
Consumer Products
support as well as local disaster recovery.
About:
One of India's largest and most respected business conglomerates, Tata Consultancy
Services in 2005-06 had groups revenues of $21.9 billion (Rs. 967,229 million),
equivalent of about 2.8 per cent of the country's GDP, and a market capitalization of
$51.3 billion. The Tatas together employ some 202,712 people.
T
29
s and BPO organisation
uch as BFSI,
top 10
corporations in the Fortune 500 list of the largest corporations in the United States are
among TC
Service O IT services: T ervices over the entire IT application lifecycle, including
migration and reengineering, e-commerce and internet services, testing services,
architecture and technology consulting, systems integration, as well as packaged software
implementation across multiple industry and technology domains.
Tata Consultancy Services (TCS) is IT consulting, service
offering services to clients across 55 countries, with a vision is to be a Global top 10 IT
services company by 2010. TCS has offices in 33 countries, over 35,000 consultants from
30 nationalities and more than 100,000 man years of experience, TCS offers a
comprehensive range of IT services to clients in diverse industries, s
manufacturing, telecommunications, retail, and transportation. Six of the
S' clients.
fferings:
CS offers ADM s
Group financial performance and sector-wise operations
7%
9%
23%
5%
4%
20%
32%
Services
Material
Engineering
Energy
Consumer Products
Chemicals
Communications &Information System
30
IT infrastructure: The company offers services that include complete outsourcing of IT
etworks, consulting and integration, hardware support and installation, and
infrastructure management.
lients in specific industries and has licensed several software intellectual property rights.
also develops and markets a variety of products across diverse industries.
ngineering & Industrial services: TCS offers a range of engineering services, embedded
oftware and R&D services to diverse clients, assisting in new product development and
anagement through services
Consulting: One of the first companies to set up an independent consulting division, TCS
day includes consulting as an integrated part of any assignment to its customers in
ifferent industry segments.
PO: TCS offers a variety of transaction-based IT-enabled services. These include
n
Asset-based solutions: It utilizes its proprietary software assets to deliver solutions to
c
It
E
s
product lifecycle m
to
d
B
7000 83500Employees
50
60
70
40
30
0
10
20
1996 2006(3Q)
inbound call centers, back office support, engineering services and database services
Human Resource:
31
ITIL Framework
Six Sigma
Tools
Alliances
TMM
Remedy Managed Services
Centers of
Excellence
SLA Base
d Soluti
on
Shared
Service
Model
Infrastructu
Cent
re Solution
ers
TCS IT Infrastructure Services
IT Infrastructure Services
Infrastructure Offerings:
Technical Help Desk Services
Desktop Services
Data Center Services
Enterprise System Management (ESM)
Network Management Services
Managed Storage Services
Database Services
ITIL Process Consulting
32
SWOT Analysis: Strengths:
TCS is capable in performing infrastructure management work that is commonly
bundled with application management like production systems support, database
management, an
TCS has six offshore infrastructure delivery centers located in Hyderabad, Chennai,
Mumbai, Delhi, Calcutta, and Bangalore.
o a AS e, W
Weaknesses:
• TCS has one ITIL certified staff
• TCS does not have any DRII- or BCI-c d consultants on staff.
one re i re delivery center located in Budapest,
Hungary.
• TCS has weak asset transfer strategy
• Weak presence in Global delivery management
ter Tata Group also allows it to leverage existing European
group resources to offer further depth and greater presence across Europe.
res that European clients get the local flavor of services
they might require.
nagement.
• TCS have strong mainframe capabilities
•
d server monitoring.
•
• TCS has br ad technical cap bilities across
ertifie
400, mainfram intel, and Unix
devices.
• TCS has only nearsho nfrastructu
• Weak help desk threatens to invite new clients
Opportunities:
• Affiliation with the grea
• On-demand service and subscription-based services.
• Local resource network ensu
• Telecom infrastructure ma
33
• Mainframe management capabilities will give opportunity to TCS to go for large
cture deals and hosting biz
he security and disaster recovery offerings
9.3.2 Wipro.
s the strongest European client base for
offshore infrastructure services today. The company is actively pushing beyond pure
nst traditional on-site outsourcers for larger end-to-end infrastructure
eals.
incipal business segments.
Care
oducts
consulting services division of Indian
ipro Limited. It is leading provider of integrated business, process, and
mentation,
networking, systems integration, and technology consulting services. It also provides
es. With operations in about 35
ooking to reduce costs through outsourcing various business
functions. The global technology services division constitutes the majority of Wipro's
its revenue and almost 90% of its operating
income.
infrastru
Threats: Paucity of certified staff to support t
may become threat in long term for its expansion program in Europe to support mission-
critical work.
Of all the Indian vendors, Wipro maintain
remote infrastructure management and has recently begun to successfully compete head
to head agai
outsourcing d
The company operates through five pr
• Global IT Services and Products
• Lighting and Health Science
• Consumer
• India and Asia-Pac IT Services and Pr
• IT Enabled Services
Wipro Technologies is the global technology and
conglomerate W
technology services. A leading global independent R&D services provider, the firm
offers such services as application development, enterprise systems imple
with offshore business process outsourcing (BPO) servic
countries, Wipro Technologies has been growing rapidly due to number of companies,
particularly in the US, l
business, accounting for about 75% of
34
Service offerings:
Application Development &
BPM
band
Business Intelligence
se Security e-procurement & B2B
Home Gateway
Infrastructure Solutions
Maintenance Application Performance
Management & Support B2E
Broad BPO
Business Consulting CRM Data Warehousing e-Business Enterprise Application
Services Enterpri
ERP
IEEE 1394
Learning Solutions
PLM Product Support Process Consulting Space Communications SCM
System Design Voice Networks
ices Wireless Networks Wireless LAN
Legacy Migration Multimedia Package Implementation
System Integration Technology Consulting Network Management Testing Services Optical Networks Quality Consulting
Web Serv
Industrial Automation
Wipro’s Global IT Revenue pie
Custom App Dev & Maintenance, 23%
Consulting , 1%
Infrastructure Outsourcing, 9%
ITES & BPO, 9%
R&D services, 37%
Package Implementation+Te
sting + System Integration, 21%
35
Messaging services
Desktop Management
Telecom Network
Data Centers
SecurityServices
Servers & Mainframe services
Netwo
DB
ervices
Infr uct
Syst In
Con
SWOT Analysis
Strengths
Strong European client base for offshore infrastructure services.
Strong Acquisition strategy
Strong Delivery capabilities through its offshore centers in India and Europe.
Strong R&D services and infrastructure management.
Provides Multi lingual Support
Wipro services can be unbundled or provided as point offerings
• Control over Attrition rate
• Competing with existing outsourcing competitors at the recompete stage of the deal.
IT Infrastructure S
astr ure Management
ems tegration
rks
A Services
sulting
• A broad portfolio of infrastructure related offerings
• Strong European support functions
•
•
•
•
•
•
36
Weaknesses
• Wipro does not have any help desk agents located in nearshore geographies.W
infrastructure offerings will negatively impact Wipro’s ability to differentia
long term.
ide
te in the
It has to increasingly develop its nearshore centers, especially for help desk
management in Europe.
Relentlessly focus on costs and process rather than value
pportunities
Developing transition methodologies to ease this process from a customer perspective
and is also exposing the cost savings associated with taking a high proportion of work
to an offshore location.
Looking at asset transfer in EU this will take Wipro into big league
• Needs to evaluate options for nonlinear growth, such as an IP-based solution
e the key areas where Wipro will be foraying into
of spreading itself across too many different services
to compete in the
infrastructure market vis-a-vis the incumbent providers.
• Wipro lacks the experience in taking over assets and needs to show savings from
•
•
O
•
•
framework.
• Hand held devices will b
• Address SMB markets: Companies interested in adaptive provisioning and pricing
models.
Threats
• The company is in danger
domains simultaneously.
• Wipro has to develop a strategy beyond labor arbitrage if it is
performing this work.
37
9.3.3 Infosys Technologies
Although a late entrant into this market, Infosys is building up some strong momentum
implementation, Infosys has since invested
rovides consulting and IT services to clients globally - as
n business transformation
mployees worldwide, we use a low-risk Global Delivery
Model (GDM) to accelerate schedules with a high degree of time and cost predictability.
ogy, delivered by best-in-class people." &
"To achieve our objectives in an environment of fairness, honesty, and courtesy towards
t & Management:
gineering,
mance & Management
Scorecard, Corporate Strategic Planning, CPM Technology Implementation,
on Framework, Technology Architecture & Design.
ent, Performance Testing,
est Automation, Testing Center of Excellence.
Infrastructure Services
thanks to its use of innovative business service management methodologies coupled with
modular, business-centric delivery processes. While faced with an initial struggle in
finding the right skills locally for fast
strategically in on-site and nearshore delivery options for Europe.
Infosys Technologies Ltd. p
partners to conceptualize and realize technology drive
initiatives. With over 69,000 e
Its Vision and Mission is to "To be a globally respected corporation that provides best-of-
breed business solutions, leveraging technol
our clients, employees, vendors and society at large."
Service Offerings:
Application Developmen
Application Development, Application Maintenance, Application Re-en
Application Portfolio Management, Platform Services.
Corporate Perfor
Balanced
Data Architecture, Discovery and Solution Design, Integrated Management Processes
and Methods, Strategy Executi
Enterprise Quality Services
Defect Prevention, Metrics Based Performance Managem
Process Assessment, Process Training, QA Process Consultancy, Software Process
Capability Improvement, T
38
Application Management, Datacenter Services, Desktop Services, Infrastructure & ITIL
onsulting, Mainframe Operations, Network Services, Service Desk.
System Integration
Enhancement (PE2).
C
Packaged Application Services
CRM, Enterprise Application Integration (EAI), ERP, HCM, SCM.
Product Engineering Services
Additional Product Services, Offshore Product Development Center, Product Consulting
and Professional Services, Product Design & Development, Product Lifecycle
Management, Product Sustenance, Testing & Automation, Systems Integration.
Architecture Services, Business Intelligence and Data Warehousing, Enterprise Content
Management, Enterprise Information Portal, Enterprise Mobility, Enterprise Security,
Identity Management Migration and Re-hosting, Performance Engineering &
0.0%
5.0%
25.0%
10.0%
15.0%
20.0%
30.0%
35.0%
Revenue by Services
31-Dec-06 20.1% 29.8% 2.1% 17.9% 3.3% 7.0% 1.5% 4.9% 9.1% 4.3%
30-Sep-06 21.4% 29.2% 2.3% 17.0% 3.6% 6.8% 1.6% 4.5% 9.9% 3.7%
30-Jun-06 21.3% 29.9% 2.6% 16.5% 3.0% 6.2% 1.8% 4.2% 10.8% 3.7%
31-Mar-06 20.1% 30.8% 4.3% 17.1% 3.2% 5.6% 1.9% 4.0% 9.8% 3.2%
Re- Package Engineer Businesroducts
Development
Maintenance engineer
ingImplementation
Consulting Testing ing
Servicess
Process
Other Services P
39
Infrastructure Services:
SWOT Analysis
trengths
• Highly adaptable to clients demands by virtue of its size
• Its overall offshore infrastructure management capabilities stand out for their high
process maturity
• R&D is strong focus area. 82 invention disclosures and 20 patents applications in 2006.
• Strong strategies for investment
• Strong capabilities in Wintel, Unix, and network management and monitoring gives cost
benefits.
S
40
Weaknesses
• Lacking focus to align ISM with core business
lacks the nearshore capabilities to provide clients with multi-country infrastructure
opportunities to network with Fortune 500 business leaders.
• Strategies like MD and Chairman on the boards of other companies helps Infosys to
oors at a senior level with both clients and prospects.
issue
• Weak market presence
•
management support.
• Attrition rate, though low as per industry, but is going up
• Cannot get HR for infrastructure management
• High training cost
• Weak onsite support
Opportunities
• Vendors are eager to partner with Infosys.
• Will find opportunity in bundling application and infrastructure management
• Focusing on European market.
• Presence in World Economic Forum and the Bill Clinton Foundation work out as a
open d
Threats
• Weak security and disaster recovery capabilities and no certification will raise
in European countries
• No major experience in staff transfers
41
9.3.4 HCL Technologies.
HCL has strong infrastructure management background and innovative services strategy. The
and managing infrastructure transformation to help clients better
HCL is one of the leading global Technology and IT enterprises with annual revenues of US$
nies, HCL Technologies and HCL
founded in 1976, is one of India's original IT garage start ups. Its
range of offerings span R&D and Technology Services, Enterprise and Applications Consulting,
cture Management, BPO services, IT Hardware, Systems Integration and
n India. The HCL team comprises 43,000
professionals of diverse nationalities, operating across 17 countries including 360 points of
ajors.
company has grown from being a pure-play IT operations supplier to an end-to-end service
provider capable of initiating
align with their business needs.
3.90 billion. The HCL Enterprise comprises two compa
Infosystems.
The 30 year old enterprise,
Remote Infrastru
Distribution of Technology and Telecom products i
presence in India. HCL has global partnerships with several leading Fortune 1000 firms,
including several IT and Technology m
Its Business Model and Service Offerings:
42
Infrastructure Services:
RIM Service Offerings – By Indian Vendors.
Service
Provider
System
Monitoring
Network
Monitoring
Security Desktop
Support
Support
ERP
Operations
Support
Database
Administration.
Mainframe
Support
Wintel
Support
Unix
Support
Help
Desk
Wipro
TCS
HCL
Infosys
High Provided to 10 or more customers
Medium Available and provided to 1 to 10 customers
Low Under development or not a stand-alone service option
Services
Services Desk Incident Problem Change Configuration Release
Checkpoint
ISS
Cisco
EMC
Sun
IBM
IIS
I Planet
Apache
Oracle
SQL Server
Windows
UNIX
Windows
MAC
Sun
Cisco
Nortel
Enterasys
Avaya
M
Symantec
Trend Micro
HP
Hitachi
Web logic
Web sphere
Sybase
DB2
Linux
Midrange
Mainframes
Linux
S Exchange
Lotus Notes
Custom Apps
ERP/CRM
Net Forensics Dell
End User Computin
g
Data Centre
Security ApplicOperat
ation ions
Process & Tool Consultancy
Network
43
9.4 Latest figures disclosed during Jan-Apr 2007
US$ Mn 2004 2005 2006-07 2006-07 2006-07 Q1 Q2 Q3 Wipro 92 200 51 60 85.6 TCS 78.2 136.8 61.21 58.52 60.39 HCL 64.4 115.2 46.434 40 Infosys 59.8 100.8 Discl at Yeoses ar end Satyam 50 3.2 16.74 20.6 4 18.3 #Others 115 172.8
3
5
7
9
11
13
17
19
AM
J 05
to JA
S
JAS
05 to
ON
D 0
5
J
JFM
AM
J
AM
J 06
to JA
S06
15
05
ON
D 0
506
06
to 06
FM
TCS Infosys HCL Wipro Satyam Cognizant
% QOQ
AMJ 05 to JAS
JAS 05 to OND
JFM 06 OND 05 to AMJ
05 05 JFM 06 06 AMJ 06 to JAS 06 TCS 7.08 6.82 9.13 7.65 8.21
Infosys 10.08 6.68 6.08 11.30 13.03 HCL 3.24 5.88 7.69 7.94 10.29
Wipro 8.31 11.4 10.67 0 7.52 3.69 Satyam 8.54 5.24 6.76 7.33 9.32
Cognizant 11.24 9.09 11.13 17.97
44
10. Methodology
Sampl haracteristics Considered Within Each SWOT Category (Repre ntative of Types o tions) STRE THS WEAKNESSES OPPORTUNITIES THREAT
e Cse f Considera
NG S Adprop
vanta s of osit
Capabili s, resources,
ts, ple
pet e ntages
Organizational core competencies USPs Resourc etpeo Organiza tr Cost efficienc s and cost stru Experience, knowd Financial reserves, likely returns Cash flow, long-term contracts Brand and reputation Marketing reach, distribution, Awareness Innovation Location and geographical
Accre Com strength Cost structure Disadvantages of proposition Distractions from core a
abi Kn ues anvul Loss of key staff Ma ent covsuccession Morale, commitment, leadership Obsolete technology Organizational culture Poor product and marketing mix Processes and systems and so on
Bu and product d D hic shifts Gap in the m itespace Geographical, export, import Glo ces Ind stytrends Information and rese Market developments and t New markets, vertical, horiz New source of labor New USPs Niche target markets Non traditional partners Partnerships, agencies, distribution, channels
cal effects
Economy me, a E viro l effe Fiscal policy Insurmountableweaknesses
en
lative effects
et demand
entrants
New technologies, services, ideas Obstacles faced Seasonality, weather effects Substitute products and services Sustainable financial backing
geion
tieasse peo Com itivadva
es, assple
s,
tional s ucture
iectures
ledge, ata
ditations
petitive
ctivity Gaps in cap lities
own iss d nerabilities
nagem er,
sinessevelopment
emograp
arket/wh
bal influen
ustry or life le IT developm
arch
rends
ontal
Politi
(hobroad)
n nmenta cts
ts
Legis Mark New
45
11 References
ls of the research project which includes:
o con e c o at HCL nologies a
is firm C, B
rviews pub shed in CIO Today, business week, Data Quest etc.
Book la NASSCOM
Various references are taken at different leve
• ng t TalkiTech
cerned peopld Wipro Technologies and TCS.
e in th orporate communicati ns departmentn
• Articles publ
Everest etc.hed by consulting s like Gartner, ID utler, Forrester,
• Inte li
• Black unched by M
Websites like: www.hcltech.com www.hclisd.com www.wipro.com www.satyam.com www.tcs.com
sys.com
ww.infow
ww.gartner.comw www.globalsourcing.com www.outsourcingdatabase.com