Managed services gets boosted by BI

Expanding on traditional outsourcing arrangements and focusing on improvements across the enterprise is what NCR Canada says makes its new business intelligence (BI) managed services stand out from the pack.

But some analysts caution that outsourcing is not always the right choice, and instead advocate a multi-sourced environment.

Bob Gilchrist, vice-president of customer service for NCR Canada in Toronto, said NCR’s service, targeted at the retail and financial sectors, is focused on providing BI for the management and operation of IT infrastructure.

“Typically, the help desk is the hub and around it there is a whole array of other services,” such as planning and design, deployment services and integration, and ongoing hardware and software support that could use some BI to help things to run smoothly, he said.

According to Gilchrist, outsourcing contracts tend to focus on the service-level agreement which provides the specifics on how soon the help desk will answer a call, or how quickly a system will be restored. But NCR’s approach is a little different. “We still include those things within our agreements, but that’s not all we focus on.”

Through a combination of service transaction data and mining tools based on a Teradata data warehouse, NCR’s offering helps customers “capture all the events that go on in an account,” he said – from the first call to the help desk, to the diagnosis of the problem and what is needed to correct it. That information is then used to prevent similar problems from arising in the future.

For instance, instead of allowing retail businesses to accept as a “fact of life” that debit and credit machines will sometimes fail – resulting in lost sales because customers walk away from their purchases at the cash register – NCR can use BI capabilities to help the client “understand transaction volumes at certain times of day, compare them to other times, determine the actual amount of money lost, and build some redundancy into their networks.”

And unlike traditional outsourcing models, where the outsourcer not only provides the service but also owns the assets and design of the systems, Gilchrist said NCR’s managed services allow the assets and system design to remain in customers’ hands. “We manage things more from an operational business standpoint – we make recommendations back to [the customer], but they make the ultimate decision.”

According to Dan MacLean, director of outsourcing and IT utility services research for Toronto-based IDC Canada, outsourcing has been a relatively strong proposition for some time, particularly in Canada, where over the last couple of years, some companies have gained extensive outsourcing experience.

“As word gets around about outsourcing success, companies are more inclined to look at it for specific processes,” MacLean said. “The more people do it, the better they get at it, and the more [outsourcing] tends to become more of an accepted practice.”

Allie Young, a research vice-president with Gartner in Boston, said outsourcing is the one portion of the IT services market that has maintained a strong growth rate through difficult economic times, even while other projects were put on hold. Cost containment continues to be the real driver, she added.

Gartner predicts worldwide outsourcing will grow from US$161 billion in 2002 to $232 billion on 2007.

As for NCR’s focus on retail and financial environments, Young said it’s a smart move. “What is really clear is that outsourcers that have very specific solutions for specific markets…will have a much higher chance of having mindshare,” offering a more specific value proposition to clients, she said.

But that doesn’t mean companies should jump on the outsourcing bandwagon, she cautioned. “Our belief is that every single decision should be scrutinized in IT,” a process that ideally will lead to a “multi-sourced environment” with a combination of in-house and outsourced processes, joint ventures and internal shared service centres, Young said.

A company’s business roadmap may also affect its outsourcing decision, MacLean added. “The issue of technological evolution may be a strategic consideration for a company. Some companies may believe that by keeping up-to-date with a certain technology, they can achieve a better way of doing business and be competitive.”

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Jim Love, Chief Content Officer, IT World Canada

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