• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Ambar Singh Roy

Do what you do best. Let the experts take over the rest. Some gyaan sharing.

IT'S the classic problem companies are grappling with — getting complex to stay simple. In today's competitive business environment, companies, even non-IT ones, are putting in place multiple platforms, legacy systems, internal and external networks and an endless stream of new technologies so they can remain in the lead. But all these make the task of managing the information system and networks more difficult than ever before, necessitating outsourcing these functions.

Typically, outsourcing of information systems and networking is resorted to by companies that have large ERP installations, mail servers, manufacturing systems, multiple production facilities, etc. Outsourcing of non-production-related IT applications enables a company to not only focus on its main business activity but also achieve cost-savings - on IT initiatives of course - to the tune of up to 30 per cent.

In the present domestic environment, this will translate into a market size of around Rs 1,000 crore, aver industry experts.

And there are companies, besides the IBMs, HPs, and NCRs, which are emerging on the scenario to partake of a share of the business pie. From providing desktop and network support to hosting the physical infrastructure in their own premises and providing online connectivity to their clients and specialising in niche services such as SAP and server monitoring, all of it is on offer.

The outsourced activity also includes disaster management and diagnostic systems which focus on predicting failures based on which corrective action can be taken.

Leave it to the experts

Large companies such as ITC and Tata Steel have already outsourced most of their non-critical, non-operational information systems and network management needs. While ITC has centralised its information systems and network management needs and entrusted the job to ITC Infotech, Tata Steel has had a "good experience" outsourcing its ERP, desktop, network server and other non-operational IT activities to IBM and HP. Following their footsteps now are other companies. According to B. Hari, Chairman of Compass 2003, there is tremendous scope for companies that are engaged in contract management of information systems and networks.

"For companies which outsource, quality and consistency of delivery is ensured even as the move opens up new opportunities for local companies with domain knowledge and who know the marketplace", he says. In the present times, when technology is changing at a fast pace, it is imperative for companies to outsource their IT needs so that changes do not impact their core activity, he says.

Basant Agarwal, Chairman of the Rs 525-crore turnover Hindustan Seals, Asia's largest manufacturer of ROPP (Roll On Pilfer Proof) caps, feels that outsourcing of non-operational IT requirements is best left to those who "know the business better".

Hindustan Seals is working on plans to outsource its information systems and network management requirements. This is expected to not just save costs but also facilitate better efficiencies, he says.

Equipment leasing and vehicle finance major Magma Leasing Ltd has initiated the process of outsourcing its in-house IT requirements.

"For a finance company like ours, IT is a support function. It's best left to people who are experts in network management.

We have no headaches and we can impose penalties if the service standards are not as desired, something we cannot do if the fault lies with any of our own departments", feels Sanjay Chamria, Managing Director of Magma Leasing Ltd.

Says Shyam S. Aggarwal, President of The Indus Entrepreneurs (TiE), Kolkata Chapter: "Information systems and network management are gradually catching on in India. The developments in this regard have been primarily driven by three factors.

First, continuous change in hardware systems has necessitated services vendors who keep abreast of such changes. Second, it isn't very easy for companies to keep up with rapid changes in software. And finally, it's easier for vendors to train manpower in tandem with changes in hardware or software technologies without wastage of time".

According to Aggarwal, the idea behind outsourcing is not as much to save costs as it is to achieve better efficiencies. Insurance, banking, FMCG, pharmaceutical and big manufacturing companies, among others, could make a substantial difference to their efficiencies and bottomline growth by outsourcing their requirements pertaining to information systems and network management. And this is just the beginning, feel industry watchers.

Picture by S. James

ambar_singhroy@

rediffmail.com

Article E-Mail :: Comment :: Syndication

Stories in this Section
Don't do it all yourself

Copyright © 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line