Short-term contracts give mid-cap IT cos new lease of life

With the duration of outsourcing deals getting shorter, deals worth nearly USD 85 billion are up for renegotiations this year, reports CNBC-TV18’s Shreya Roy.

Midcap IT players may get a new lease of life. With the duration of outsourcing deals getting shorter, deals worth nearly USD 85 billion are up for renegotiations this year, reports CNBC-TV18’s Shreya Roy.

Over the last few years, uncertain times have forced IT companies to go in for more short-term contracts. For mid-cap IT companies, this may have been a blessing in disguise.

Data from outsourcing advisory firm TPI says that around 700 contracts will be up for renegotiations this fiscal year, compared to 530 last year.

“There is a significant reduction in the tenure of contracts as they were originally signed. Compared to 10 years ago, when 500 of these were being done, there are 1000 a year. The tenure has gone down to five years instead of seven, so a lot of deals are naturally coming back to the market as renewals. In itself, this is a very large opportunity,” said Siddharth Pai, partner and MD at TPI India.

For many IT players, this may be just what the doctor ordered. After all, renewals account for almost 65% of the outsourcing market. Advisory firm Everest estimates that by October 2013, deals worth nearly USD 85 billion will be up for renewal.

These include a contract between HP and Bank of America, a mega deal from Shell group which is currently with AT&T, HP, and T-Systems, a blue cross blue shield deal with Dell and Manu Life’s deal with IBM.

Many of these contracts are expected to be broken up into smaller chunks, as outsourcers are looking increasingly towards multi-sourcing. Analysts say this could work in the favour of the smaller players, especially those like Mindtree and Hexaware, which have been focusing on developing niche capabilities to help differentiate from larger players.

 

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Business Focused Analytics – The Starting Point

Having been a Business Intelligence practitioner for the last 13 years, there has never been a more exciting time to practice this art, as organizations increasingly realize that a well implemented BI & Analytics system can provide great competitive advantage for them. This leads us to the question of – ‘What is a well implemented BI system?’ Let us follow the Q&A below.

Q: What is a well implemented BI system?

A: A well implemented BI system is one that is completely business focused.

Q: Well, that doesn’t make it any easier. How can we have BI that is completely business focused?

A: BI & Analytics becomes completely business focused when they have ‘business decisions’ as the cornerstone of their implementation. The starting point to build / re-engineer a BI system is to identify the business decisions taken by business stakeholders in their sphere of operations. Business decisions can be operational in nature (taken on a daily basis) and/or strategic (taken more infrequently but they tend to have a longer term impact). To reiterate, the starting point for BI is to catalog the business decisions taken by business stakeholders and collect the artifacts that are currently used to take those decisions.

Q: The starting point is fine – What are the other pieces?

A: The next step is to identify the metrics and key performance indicators that support decision making. In other words, any metric identified should be unambiguously correlated to the decision taken with the help of that metric and by whom. Next we need to identify the core datasets in the organization. Please refer to my earlier blog post titled ‘Thinking by Datasets’  on this subject.

Q: What about the operational systems in the landscape? Aren’t they important?

A: Once we have documented the relationship between Business Decisions to Metrics to Datasets, we need to focus on the transactional applications. The key focus items are:

• Inventory of all Transactional Applications
• Identify the business process catered by these applications
• Identify the datasets generated as part of each of business process
• Next step is to drill-down into individual entities that make up each of the datasets
• Once the Facts & Dimensions are identified from the entities, sketch out the classic ‘Bus Matrix’ which would form the basis for dimensional data modeling

 

Q: All this is good if we are building a BI system from scratch – How about existing BI systems?

A: For existing BI applications, the above mentioned process could be carried out as a health-check on the BI landscape. The bottomline is that every single report / dashboard / any other analytical component should have traceability into the metrics shown which should then link to the decisions taken by business users. BI & Analytics exist to help organizations take better business decisions and that defines its purpose & role in an enterprise IT landscape.

The answers mentioned above provide the high-level view of Hexaware’s approach to Business Intelligence projects. We have worked with many organizations across industries and a business focused analytical approach has provided good value for our customers.

Thanks for reading. Please do share your thoughts.

Business Focused Analytics – The Starting Point – Part 2

Business decisions are the cornerstone of a successful BI implementation. Cataloging the decisions taken by the key stakeholders in an organization is the first step in understanding the information requirements for a data warehouse. Capturing business decisions – strategic and operational, is not a simple task as most business decisions tend to be complex requiring diverse data points. Further, when all decisions are collected, how will we know the decisions that have the most impact on the business?

Here’s a simple framework based on the six primitive interrogatives that Hexaware has effectively used while assessing information requirements. This framework helps systematically uncover important dimensions of information and organize them in a format that is easy to comprehend.

Question	Description	Comments	Example
Who?	The decision-maker	Stakeholder	Service Delivery Manager (SDM)
What?	The decision	A decision requiring supporting data / information	Resourcing for a project
Why?	The motivation for the decision	The significance of the decision to the business	Getting the right project team is critical to the success of a services project.
When?	When is the decision made	frequency (or) a point in time	Made during the planning stage and reviewed at periodic intervals
How?	The basis for making the decision – KPI / metrics / a logic	the metrics and datasets required for making the decision	By comparing the skill set requirement and project schedule in the Project plan to the  availability of resources (HR and PMO databases) with the right skills (skills database) and good track record (appraisal database)
Where?	The place where the decision is made	Specifies mobility /  additional access requirement	This information needs to be accessed through extranet

Depending on the stakeholder (mostly), the decisions could be strategic or operational. A manager responsible for carrying out a business process will have an operational view of information and will be making operational decisions relating to his/her sphere of operations.  Decisions taken by top management personnel with longer-term business responsibilities tend to be more strategic.  The above framework helps capture both strategic and operational decisions along with the datasets required to make the decisions.

Successfully capturing the decisions and the relevant metrics and the datasets is only half the story in the assessment for a data warehouse. Let’s reserve the other half for a subsequent blog.

Hope this information was useful. Please do share your comments/suggestions.

The Madness of King Google

When Google arrived on the scene in the late 1990s, they came in with a new idea of how to rank pages. Until then, search engines had ranked each page according to what was in the page – it’s content – but it was easy for people to manipulate a page’s content and move it up the rankings. Google’s new idea was to rank pages largely by what was in the links that pointed to them – the clickable link text – which made it a little more difficult for page owners to manipulate the page’s rankings.

Changing the focus from what is in a page to what other websites and pages say about a page (the link text), produced much more relevant search results than the other engines were able to produce at the time.

The idea worked very well, but it could only work well as long as it was never actually used in the real world. As soon as people realised that Google were largely basing their rankings on link text, webmasters and search engine optimizers started to find ways of manipulating the links and link text, and therefore the rankings. From that point on, Google’s results deteriorated, and their fight against link manipulations has continued. We’ve had link exchange schemes for a long time now, and they are all about improving the rankings in Google – and in the other engines that copied Google’s idea.

In the first few months of this year (2006), Google rolled out a new infrastructure for their servers. The infrastructure update was called “Big Daddy”. As the update was completed, people started to notice that Google was dropping their sites’ pages from the index – their pages were being dumped. Many sites that had been fully indexed for a long time were having their pages removed from Google’s index, which caused traffic to deteriorate, and business to be lost. It caused a great deal of frustration, because Google kept quiet about what was happening. Speculation about what was causing it was rife, but nobody outside Google knew exactly why the pages were being dropped.

Then on the 16th May 2006, Matt Cutts, a senior Google software engineer, finally explained something about what was going on. He said that the dropping of pages is caused by the improved crawling and indexing functions in the new Big Daddy infrastructure, and he gave some examples of sites that had had their pages dropped.