How A Two Speed IT Structure Can Give Any Company The Edge...

It is a concept which has not gone mainstream yet but it has been gathering a following now for a few years.

I am talking about the concept of having a Slow Speed IT lane and a High Speed IT lane within the same organization.

Over the past years a lot of companies have embarked upon the digital transformation the market place (their customers) have demanded.

Digital transformation means a lot of different things to different people but most commonly the following IT challenges are understood to be part of the digital transformation package:

  • Online Systems (Web Applications)
  • Mobile Apps
  • Social Media 
The challenge is of course that things happen much faster on the web (the digital marketplace) than a lot of IT organizations are used to operate at. An IT department which has been supporting the legacy component of an organizations IT infrastructure does usually not need to move very fast. 

Legacy systems are ordinarily updated rather there is often times the mindset that being slow or deliberate is not a bad thing. There are still plenty of organizations which run enterprise software off an AS/400 and/or use Windows Vista.  

The issue of course is that this mindset is producing  a competitive disadvantage in the digital marketplace. 

Companies are falling behind in their Key Performance Indicators vis a vis their more aggressive, digitally savvy  peers. 

CIO's and Decision makers do realize that a huge part of addressing the shortcomings is to foster a culture which is more geared towards the Digital Marketplace. 

Needless to say...sometimes this is easier said than done.

Often times the very same decision makers which are tasked with spearheading the transformation are part of the culture where slow and deliberate is good.

So..the question of how to get ahead of the curve and transform into the Digital Marketplace deserves to be looked at. 

Perhaps the easiest and most practical solution is to outsource the Digital Transformation to outsourcing companies who have a lot of experience in that area while maintaining the existing In House IT infrastructure.

The effect is what is being called a Two Tier IT infrastructure. One lane is High Speed (Digital Transformation and Strategies) and the other lane, Slow Speed lane, deals with  Core Legacy and Maintenance. 

There are a few advantages operating a two tier IT infrastructure. Presumably the outsourcing provider is up to date on the latest technologies and even more important,  stays up to date...thus ensuring that the organization is able to outperform its competitors. 

The core IT team remains relatively unaffected and can concentrate on the issues they have proven to  be good at. 

In combination the two Speed Lanes can offer a successful blueprint how an organization can become more agile while maintaining the continuity needed to safeguard existing business processes.


Jamaica Clearly Seems To Be The Best Horse In The Barn For Xerox.....

I had written about the Jamaican BPO sector before. It is clearly a niche market with only 17,000 employees as of right now (albeit it is growing at a 20 % plus rate) but it has some distinct advantages over the more traditional outsourcing countries.

It has some pretty good universities which produces a fair amount of talent, it is in the same time zone as the US (same time zone as Chicago) , salary levels are about 70 % below US salary levels and the official language is English.

Perhaps the single biggest advantage is the typical very "sunny disposition" of the average will be hard pressed to find a Jamaican who is openly in a bad mood.

No company has placed a bigger bet onto the Jamaican BPO sector than Xerox. The total BPO workforce of Xerox in Jamaica is about 7000 right Xerox about 18 % market share in an industry which is usually much more fragmented.

The 7000 headcount of Xerox makes them the biggest employer in Jamaica (after the government of course).

Most interestingly, Xerox investment into Jamaica seems to be paying off for them. Internal Key Performance Indicators (KPI's) are hard to come by but a recent article (see here)  disclosed that the Jamaican BPO office has a 98.5 % satisfaction rating with its healthcare clients...which should make them one of the highest rated office within Xerox.

One reason given why the offices is doing so well is low turnover. The Jamaican office has apparently the lowest turnover of all Xerox locations worldwide. In an industry which is characterized by high attrition rates that feat is obviously remarkable and undoubtedly leads to higher customer satisfaction.

Jamaica obviously lacks the infrastructure and population to be attractive to the major players in the BPO industry. The headcount required to make a dent in their operation for the  biggest BPO players cannot be reasonably made available in Jamaica.

The lesson learned from the Xerox experience though is that on a more individual level companies looking for a good alternative to set up their BPO operation Jamaica might be a good idea.

Who Is Winning The Outsourcing Cloud Wars ?....

Undoubtedly the rise of the cloud over the past few years has created tremendous dislocations within the IT sector. Outsourcing hardware and infrastructure needs started with moving equipment into data centers, took on a life of its won and ended with the rise of companies who had never been in the "hardware business" before.

Players like Amazon (AWS) and Google (GCP) who were never a factor as a provider of the technical backbone for corporations are now firmly entrenched in a lot of organizations. Microsoft, who was always present through their software solutions is now battling it out with everyone else as a cloud provider (Azure).

Then there are the established players who have built their own cloud to support their operations.

Perhaps no company has been more aggressive in developing its cloud than Salesforce. Their entire business has been built to be cloud centric from the start...and one can argue that the cloud made their business possible.

For CEO's and CIO's at companies operating their own cloud the question of whether one of the big 3 players in the field (AWS, AZURE , GCP) might do a better job than their own Internal Data Centers always gets deliberated.

The cost / benefit analysis is rather difficult in many situations. Not only does the company stand to loose certain functionality, it also has to consider the reputational effect when a technology company operating its own cloud effectively concedes defeat and moves its cloud to one of the big 3.

Yet, this is exactly what happened at Salesforce. Salesforce has chosen Amazon's AWS to power most of their core services. (Sales Cloud, Service Cloud, App Cloud, Community Cloud , Analytics Cloud)

It is a rather stunning announcement.  Salesforce who has been on the forefront of running perhaps the single most successful cloud business there is decided to move a significant portion of its cloud to a company which was barely  in the business of operating a cloud service 10 years ago. (AWS was started in 2006)

Undoubtedly this is an event which will ring the bells at a lot of corporations who operate their won cloud. If the preeminent cloud centric business decides to outsource their cloud to AWS - what justification can be found by other companies to continue operating their own cloud ?

Salesforce might have been early ..but it just rang the exit bell for pretty much every company to close up their own cloud.