The Hindu Business Line : IT outsourcing trend may be irreversible

Offshoring of information technology is `not an isolated trend but part of a bigger shift towards the globalisation of business processes.' Thus writes Mohan Babu K in Offshoring IT Services, from Tata McGraw-Hill (www.tatamcgrawhill.com) .

For starters, offshoring is "a strategy of relocating business processes, services, and work to overseas locations, where it makes most business sense, by capitalising on the global skill pool, advances in communication technologies and the benefits of cost arbitrage." IT offshoring has seen many trends, from the pure sourcing model to the global one.

In the process, something significant has happened; `what began as a low-cost tactic for staff supplementation by IT managers is morphing into a strategic option available to business planners and technologists,' says Babu. There can be those who fear if IT offshoring is merely a `one off' boom that will fade away in future. An unlikely possibility, says the author, taking a cue from manufacturing.

He cites Shailesh Singh, an IT veteran based in Colorado, `who has seen numerous swings in the industry', and who compares the current trend in outsourcing to `the shift of low-tech manufacturing of consumer goods like hosiery and sneakers out of the US about three decades ago.' Singh says, "Just like we may never see the return of manufacturing of shoes in the US, even though the manufacture is controlled in America by the likes of Nike, the trend towards IT outsourcing may be irreversible."

Offshoring management framework

The book speaks elaborately about OMF or offshoring management framework. OMF comprises four layers, viz. governance, management, project execution and communication. The key dimensions of `offshoring governance' include definition of an SLA or service level agreement, program and transition management. Governance measures include steering committee, with senior executives delegated from the client and vendor's organisations.

"Though there may be a pre-existing MSA (master service agreement) between the client and the vendor regarding rates for certain types of services, the steering committee may be empowered to over-ride such rates if there is a sudden change in the market conditions. Such empowerment will help business continuity without impacting the overall performance."

The second layer, that of management, can be challenging in the best of times, says the author. "Statistics on project failure rates ranging from 50 to 70 per cent abound in the industry folklore." Management has also to contend with `the fact that the best (top 5 per cent or so) programmers are about 10 times better than average programmers.'

Who are effective global managers? They can be described in many ways, says Babu. Such as, through Matsushita's SMILE selection technique, where the acronym stands for `specialty, management ability, international, language, and endeavour.' Or, using Erran Carmel's MERIT, which is short for multiculturalist, e-facilitator, recognition promoter, internationalist, and traveller.

The third layer of OMF, i.e. project execution, is dealt with in three chapters, with attention to application development and maintenance. The last layer, i.e. communication, cuts through the other three layers of offshoring.

Section three of the book has essential inputs on managing a globalised workforce. "Most textbook approaches to managing in a global environment may be highly dependent on specific contexts; and some of the `cultural nuances' highlighted and underlined in management and travel books are a bit over-stated," cautions Babu. "Foreigners are given extra leeway, especially when it comes to subtleties in cross-cultural interactions; as long as they don't commit any obvious faux pas. General cultural traits may surface at different times, and those are to be recognised and dealt with."

Things never end up as cut in stone. Every offshoring project brings in new things to operations management, says Babu, in conclusion. "People and processes need to adapt to changes."

Useful insights, to help you offshore.

Standards and security threaten the growth of wireless systems

The two factors threatening the growth of wireless systems are standards and security.

Not often does one see an author striking a martial art combat pose. But that's what Randall K. Nichols does in Wireless Security, because the book, co-authored with Panos C. Lekkas, is about `models, threats and solutions'. The preface states grimly that two factors threatening the growth of wireless systems are standards and security.

"Standards traditionally expand markets and lower costs by assuring equipment to be interoperable, but they can be confusing too," explain the authors. WAP or wireless applications protocol is cited as an example of a confining standard, because it assumed `the one terminal-for-everything model of traditional cellular practice'.

Since wireless multimedia implies application-specific terminals and appliances, standardisation has to change `from one that assures compatibility to a process that enables incompatibility such as generic digital networks and proprietary applications.'

Security can both be the enabler and inhibitor of the post-3G world, alert the authors. "Practically every proprietary encryption system protecting 3G networks has been cracked," please note. And to add to our woes, "Fraud has been an enduring problem, especially for mobile radio."

Before battling with all problems, begin with an understanding of why wireless is different. "Wireless communications is the process of communicating information in electromagnetic media over a distance through the free-space environment, rather than through traditional wired or other physical conduits."

By its very nature, wireless technology `violates fundamental security principles', say the authors. How so? Because "it does not ensure the identity of the user and the device (authentication), nor prevent the sender of the message from denying he or she has sent it (non-repudiation)."

You may remember, for instance, how the impetus for moving from 1G to 2G mobile phones was `the increasing fraud occurring because of relative simplicity of stealing mobile identification numbers and making illegal telephone calls.'

While digital cellular systems overcame these problems, there were newer concerns: "such as stealing a phone and setting up call forwarding before the phone theft is reported and then making international calls on the forwarded path at local rates."

The ultimate solution may lie in `fourth generation,' which in the authors' view, "may interconnect the globe, perhaps one day allowing a cellular phone to be used from the International Space Station."

The 3G systems have consumed billions of dollars in investments but have not yet delivered the smooth interoperability that a 4G infrastructure will provide, foresee Nichols and Lekkas.

Recommended read for the security-conscious.

Tailpiece

"What a pity that we missed the bus despite having automated the alert program!"

"Oh-oh."

"All it needed was just somebody to press the `run' button as soon as the bus was sighted."

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