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Database Support Outsourcing Worst Practices – Avoiding a Recipe for Disasterby Martin Wisniewski
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Worst Practicesof IT
OutsourcingMartin Wisniewski
wisniewski@pythian.com
+61 414 841 901
August 17, 20101
2 © 2009/2010 Pythian
Martin Wisniewski
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•Director Business Relations, Pythian Australia (Asia-Pac)
•17 years in the IT industry•Responsible for Pythian Sales and Service Delivery of database, systems, applications infrastructure and architecture work for more than five 5 years across 3 continents
© 2009/2010 Pythian
About Pythian
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•Recognized Leader:• Global industry-leader in database infrastructure services for Oracle, Oracle Applications, MySQL and SQL Server• 350 clients worldwide including Forbes.com, Mitsubishi (CFA) and Harvard (BSP) for whom we help to manage day-to-day operations and complex IT deployments
• Expertise:• One of the most experienced/advanced technology certified/full-time dedicated concentrations of DBAs
• Global Reach & Scalability:• 24x7x52 global remote database administration, systems administration, consulting, special projects and emergency support
4 © 2009/2010 Pythian
Why Talk Database Outsourcing Now?
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Database Support Outsourcing
5 © 2009/2010 Pythian
Worst Practice #1Not Evaluating Vendor Landscape
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Getting caught up
in the romance
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Worst Practice #1Not Evaluating Vendor Landscape
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Relying only on the
known brand
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Worst Practice #1Not Evaluating Vendor Landscape
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Sole sourcin
g
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Worst Practice # 2Use Immediate Cost Savings as the Sole Driver
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Let’s fly him across the globe and save $$ on
the surgery!
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Worst Practice # 2Use Immediate Cost Savings as the Sole Driver
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Is your database the key
asset of the business?
10 © 2009/2010 Pythian
Worst Practice # 3Ignore Vendor Capabilities and ...
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Dinner?
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Worst Practice # 3Ignore Vendor Capabilities and Cost Model
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•What are vendor’s costs?
•How do they make their money?• Taking over risk
• Labor arbitrage
• Minimizing efforts
• Do as little as possible for the same spend
• Maximizing customer spend
• Do as much as possible and charge per hour
Worst Practice # 4Trying To Cheat Your Vendor
12 © 2009/2010 Pythian12
It’s extremely
rare to get a vendor into
an unfavorable
contract
13 © 2009/2010 Pythian
Worst Practice # 4Trying To Cheat Your Vendor
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... and when youthought
you did...
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Worst Practice # 5Sign a Long Term Lock-In Contract
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2005
2007
2009
Do you know what will happen two years from now?
2011
20??
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Ensure innovation
s don’t happen!
Worst Practice # 5Sign a Long Term Lock-In Contract
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Perceived cost savings
Vendor protected from abuse with strict SLA’s
Worst Practice # 5Sign a Long Term Lock-In Contract
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Worst Practice # 6No Visibility On Vendor’s Service Delivery
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I don’t care how my
server room looks like as
long as service is up
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Worst Practice # 7Outsource Key Internal Expertise
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•Complete outsourcing• more perceived savings
• No IT distractions
• Focus exclusively on business
•Result:• Unable to measure vendor performance
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Worst Practice # 8No Executive Visibility On The Initiative
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In-house team will undermine
the vendor if they are concerned for
their jobs
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Worst Practice # 11No Executive Visibility On The Initiative
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Black Box vs.
Visibility and
Control
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Worst Practice # 9Draw Restrictive Lines of Responsibility
•Ensure collaboration cannot happen
•Your team vs. my team
•Blame-storms
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22 © 2009/2010 Pythian
Worst Practice # 9Draw Restrictive Lines of Responsibility
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Adopt Antagonistic Relationships
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Worst Practice # 10Meeting SLA ≠ Customer Satisfaction
•SLA’s met but customer dissatisfied• Customer contractually obligated to be “happy”
•SLA violation discounts must be material• Dead business doesn’t need 10% discount
•“Vendor will be doing a great job if ___________”• Clarity on all levels in the org
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24 © 2009/2010 Pythian
Worst Practice # 11Avoid Multi-Sourcing
•Why multi-source?
•Performance-based procurement
•React quickly on service quality issues
•Find the right balance between suppliers and in-house team
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25 © 2009/2010 Pythian
Worst Practice # 12Ignore Alternative Service Models
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Utility based /Linear cost to efforts
Fixed price /Fixed scope
Value based
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Best PracticesVendor Selection Process
• Goals & measurement: the 10% floor
1.Assess spend & supply market
2.Identify suitable suppliers
3.Facilitate selection
4.Negotiate with vendor
5.Partner with vendor to implement new supply structure
6.Measure results, rinse & repeat
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Best PracticesVendor Selection Criteria
• Five C’s of Cultural fit• Continuous improvement
• Cross-functional teaming
• Consistent reasoning
• Collaboration - transparency, knowledge and information sharing
• Commitment & responsiveness
• Business model & profit model• Evaluation of subject matter excellence• Collaboration - supply management, engineering, and executives
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28 © 2009/2010 Pythian
Best PracticesVendor Collaboration
• Leverage vendor expertise & experience• Collaborate on new initiatives• Innovate together• Co-invest together• Target, achieve & claim savings• Promote knowledge-sharing networks• Executive visibility• Review SLA’s regularly
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29 © 2009/2010 Pythian
Best PracticesVendor Oversight
• Monitor Performance and Quality• Aim for outstanding, intervene at excellent
• Maintain in-house expertise
• Take responsibility for making and keeping your supplier outstanding
• Maintain business-level knowledge of your supplier
• Maintain control of the design• Maintain control of the suppliers• Multi-sourcing• Control the new product development process
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© 2009/2010 Pythian
Thank You
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Questions, Comments, Feedback?
Martin Wisniewskiwisniewski@pythian.com
Twitter: @pythian
Visit: http://www.pythian.com
Tell us what you think…
http://feedback.insync10.com.au
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