We sent out an RFI on behalf of our rising fast-food purveyor, TacDoh, which is looking to reallocate a portion of its IT budget to support business-focused development projects. Admittedly not on the scale of a Krispy Kreme or Starbucks, TacDoh is experiencing strong growth and looking to maintain its momentum by outsourcing network and systems management and focusing on its core business.
Sadly, however, the savings we would realize were small fry, and the big outsourcing vendors were not tempted by our $365 million company.
We found this surprising, especially since "pursue small/midsize client opportunities" came in at No. 10 in a study released earlier this year by Gartner Dataquest listing outsourcers' top 10 priorities for growth through 2005. Granted, it's at the bottom of the list, but it's still in the top 10. Plus, we've received numerous pitches from AT&T, IBM, EDS and International Network Services (INS) touting the huge advantages outsourced IT offers, and we figured they would jump at the chance to show off their edge.
Wrong. IBM and AT&T wouldn't give us or TacDoh the time of day, never responding to our many attempts to engage their supposed world-class outsourcing services. INS and EDS initially said they would participate in our evaluation, but withdrew citing a lack of resources. In the end, four smaller MSPs (management service providers)--HCL Technologies, iNOC, NetProactive Services (formerly Bangalore Labs) and PerformanceIT--submitted responses to our RFI. We were pleased with the wide variety of options they offered, though.
Costing It Out
The annual cost of nine networking and six helpdesk staffers--$1.08 million including benefits--could pay for outsourcing of network and systems management (NSM) functions and still leave some money to be shifted to development efforts. In addition, TacDoh's budget was clogged with the usual high-cost management tools, including Hewlett-Packard's HP OpenView, Concord Communications' eHealth, and CiscoWorks and N-Form for the Adtran frame relay access devices. We earmarked MRCs (monthly recurring charges) for this network-management hardware and software as funds that could be repurposed. We stated no requirements regarding removing any or all existing personnel and management systems, but we made clear this was a cost-offset attempt (for more on how we figured TacDoh's current costs, see "Cost Comparison: Chewing the Fat").
We found that our fried-pie-in-the-sky economizing calculations were na"ve. Some vendors were more aggressive, but our savings were less than we'd hoped, to say the least (see the cost comparison chart on page 58).
The TacDoh empire makes and sells deep-fried snack foods through 300 retail outlets in the Northeast, Southeast and Midwest that are connected via frame relay to three warehouse distribution centers. Corporate TacDoh is located at the Chicago warehouse site. The warehouses are meshed over the Internet using Route Science 3100 Path Control devices (for the particulars of TacDoh's situation, see "Scenario" on page 56).
The network infrastructure to be managed contains a mix of device types and would require each vendor to provide fault, performance and configuration services. We weren't sure what sort of response we'd get regarding the configuration, but we were pleasantly surprised: Sometimes it was limited, or tiered in terms of what was available, but basic configuration management was ubiquitous.
TacDoh's mix of communications gear may not be ideal, but that's a common scenario at many companies, and most are stuck with their mismatched equipment for some time. Certainly, TacDoh will not replace hardware while considering outsourcing network management.
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