Tag Archives: outsourcing

The great ITIL swindle

By guestblogger Beardy:

From the “No *expletive* Sherlock !!!” department….

For the better part of a quarter century we’ve been fed a complicated and more importantly self-serving lie… that ITIL was the IT Holy Grail that would bring the equivalent of the manufacturing industry’s QA to ITSM, felling in one swoop all the ills of IT…. sorry, wrong.

Even the most quality-conscious engineer will tell you that “QA” only aims to deliver a consistent level of output. Not premium quality. No iterative improvement in quality. Most importantly, no guarantee that the resulting output is always zero-defect. The aim is consistency, not quality. If your base quality is good, then you will deliver a quality product consistently by applying QA. Sadly, if your base quality is poor, then guess what…. QA will only ensure you deliver that consistently….. whoops..

Enter a bunch of British government braniacs… now you KNOW that will result in a quality outcome ! *choke*

So it came to pass that these bureaucrats came up with *drum-roll*…. a bureaucratic, documentation-heavy “solution” to implement an IT-oriented QA system with levels of qualification, individual certifications, etc, etc, etc…. how NOT surprising for a bunch of bureaucrats….

Now it is packaged and sold to businesses globally as “ITIL”, which is now in its 3rd iteration of trying to get it right…. so…. v1.0 must have been typical software “quality” (we ALL know better than to buy into v1.0 !)…

So, like so many other certification systems, the cost for certification is horrendous. It almost makes the software systems that are meant to support these “best practices” look cheap….

So with billions of dollars expended globally on making businesses “ITIL aligned”, you would expect that ITSM was now pretty mature and safe for non-aligned businesses to adopt…. wrong…. if a certain tier-1 OEM’s “best of breed” software for managing ITSM and implementing business practices that a business can leverage to make themselves “ITIL aligned” is anything to go by….. well, let’s just say, that business better have deep pockets and VERY patient staff and customers…..

If it is such a pain; so problematic to implement; so expensive, etc.. then why do businesses persist ? Well as I see it (yes, brace for soap box time…), the reality is that the CIOs, CTOs are all so indoctrinated by the “Institute of Management” spiel and government agencies are SO risk-averse, that it is now an almost unavoidable necessity for most medium to large enterprises if they want to do business at the “big end of town”. Meanwhile SMEs will struggle to justify the cost….

Which leads on to the quote near the end of the article…. can you say “self serving” ?

Whose idea was this, anyway?
Where did the standard model come from in the first place? The answer is both ironic and deeply suspicious: It came from the IT outsourcing industry, which has a vested interest in encouraging internal IT to eliminate everything that makes it more attractive than outside service providers.

“Everything you’ve been told is wrong: What IT should do instead”
http://infoworld.com/print/108477

Ref:
http://www.itilsurvival.com/itilhistory.html

Fallout still coming down following Satyam revelations

For Satyam, the news just keeps getting worse as the weeks pass….

In the wake of the revelation about the “missing billion” or “corporate fraud” (depending on who you believe), Satyam is now in the firing line of the US SEC since the company is bound to American legal jurisdiction….

The NAB is now facing a painful decision regarding their offshoring plans and QANTAS is “monitoring” the situation. “US-based State Farm Insurance” has terminated their contract and surely other corporate clients are reviewing their offshoring arrangements.

Let us step back a bit and look at this…..

UK, USA and Australian corporate law requires company directors to follow fairly strict guidelines in terms of corporate governance to ensure the protection for both shareholders and customers. Outsourcing within the same country (read “legal jurisdiction”) provides a safety net for companies since the vendors that pick up the outsourcing contracts are bound by the same laws.

For countries with large technology sectors, offshoring is only attractive on a cost basis. Due to the implicit disconnect created by national boundaries and cultures, there is little if any supportable evidence of any other advantages. The sole obvious exception being companies looking to provide global 24×7 support from multiple timezones.

Now factor in the problems of legal jurisdiction and international law, especially the difficulties in making and launching a case that requires extradition from one jurisdiction to another. If the country is China, forget it (see reference below), otherwise it will depend on the existence of treaties between the various countries.

So, if a company chooses to offshore+outsource any section of their business, they had better be sure that the contract between them and the outsourcing vendor is binding in both legal jurisdictions and provides sufficient protection and controls. If they fail to do so, the directors could potentially be liable if it all goes pear-shaped.

Does make a person wonder if the “cost savings” look quite so appealing to the “brains trust” in NAB, QANTAS, Telstra, etc, etc in the light of the Satyam issues…. the global economic meltdown is only going to further stress company profits and that would include outsourcing vendors…. they are after all “businesses” / “companies”….

…so what happens if your outsourcing vendor goes belly-up ?

“Most of the staff displaced by ITO wave 1 have been given redundancy packages and long left the NAB” the source said. It would take at least 12 months and considerable expense to bring ITO wave 1 applications back in-house.”

“NAB faces losses over Satyam fraud” — Australian IT
http://www.australianit.news.com.au/story/0,24897,24942112-15306,00.html

“Satyam had used forged documents from four banks including Citigroup Inc. and HSBC Holdings Plc to inflate assets by $1 billion, the Wall Street Journal reported today, citing an unidentified person familiar with India’s probe.”

“Satyam Said to Draw SEC Scrutiny in Accounting Case” — Bloomberg
<http://www.bloomberg.com/apps/news?pid=20601087&sid=apfYFckIRykY&refer=home>

“…US-based State Farm Insurance terminated its technology outsourcing contract with India’s fourth-largest software group by revenue.”

“Major US client deserts Satyam” — Financial Times (FT.com)
<http://www.ft.com/cms/s/0/b7601f44-e691-11dd-8e4f-0000779fd2ac.html?nclick_check=1>

“Article 8 The request for extradition made by a foreign state to the People’s Republic of China shall be rejected if:
??(1) the person sought is a national of the People’s Republic of China under the laws of the People’s Republic of China;”

“Extradition Law of the People’s Republic of China (Order of the President No.42)”
<http://english.gov.cn/laws/2005-09/22/content_68710.htm>

I’m not a lawyer, but the above statement doesn’t leave a lot of “wriggle room” for appeal…

-Beardy