Database Support Outsourcing Worst Practices – Avoiding a Recipe for Disaster

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Worst Practicesof IT

OutsourcingMartin Wisniewski

[email protected]

+61 414 841 901

August 17, 20101

mailto:[email protected]

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

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Why Talk Database Outsourcing Now?

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Database Support Outsourcing

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Worst Practice #1Not Evaluating Vendor Landscape

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Getting caught up

in the romance

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Relying only on the

known brand

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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?

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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

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It’s extremely

rare to get a vendor into

an unfavorable

contract

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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!


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Perceived cost savings

Vendor protected from abuse with strict SLA’s


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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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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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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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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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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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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?

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