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Managing Diverse IT Infrastructures

Managing Diverse IT Infrastructures. Chapter 7. Benefits of Incremental Outsourcing. Managing the shortage of skilled IT workers Reduced time to market The shift to 24x7 operations Favorable cash flow profiles Cost reduction in IT service chains Making applications globally accessible. C.

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Managing Diverse IT Infrastructures

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  1. Managing Diverse IT Infrastructures Chapter 7

  2. Benefits of Incremental Outsourcing • Managing the shortage of skilled IT workers • Reduced time to market • The shift to 24x7 operations • Favorable cash flow profiles • Cost reduction in IT service chains • Making applications globally accessible

  3. C U T Benefits Begin To Trend Up O (if project is successful) V E R PURCHASE Time _ Costs Stabilize at Maintenance Level Purchase and Installation · Buy software · Hire consultants · Install and Test · Immediate Benefits (infrastructure already in place) + SUBSCRIBE Time _ Subscription Fees Startup Fee Purchase versus Subscribe Cash Flows + Source: Applegate, Lynda M., Robert D. Austin, and F. Warren , McFarlan - Corporate Information Strategy and Management McGraw Hill/Irwin, 2002. - 1

  4. Hosting Models • Colocation hosting • Shared hosting • Dedicated hosting • Simple dedicated hosting • Complex dedicated hosting • Custom dedicated hosting

  5. Selecting Service Providers • Descriptive information • Financial information • Proposed plan for meeting service requirements • Mitigation of critical risks • Service guarantees • Pricing

  6. Summary Grid for Computing Hosting Providers Comparison Provider 1 Provider 2 Provider 3 Dimension Company Regional hosting and National hosting Re gional telco, Description broadband provider services provider backbone, (backbone, DSL) broadband service service provider provider Employees 1600 3300 28,000 Financial Profile Declined to provide After tax loss $180 mil After tax profit of (private company) on sales of $600 mil; $1.1 billion on sales strong cash position; of $13 billion (most new facilities building not from hosting offered as explanation business). for lac ck of profitability Number of Data 3 data centers, 160,000 28 data centers, 1.6 5 (2 operational), Centers Managed/ sq. ft. million sq. ft. 220, 000 sq. ft. (45,000 Total Square Feet operational) Space offered (RFP 3 8’x8’ cages (192 sq 3 8’x7’ cages (168 sq 280 sq ft enclosed specified space for ft), partitions ft), partitions room six racks of removed to provide removed to provide equipment) contiguous space contiguous space Physical security Fully meets Fully meets Some concerns (see requirement requirement notes from site visit)

  7. Summary Grid for Computing Hosting Providers

  8. Managing Legacies – Difficulties Classification • Technology problems • Residual process complexity • Local adaptation • Nonstandard data definitions

  9. · Legacy Systems How will new infrastructure exchange data with legacy systems? · Will new infrastructure obtain needed real - time interaction with legacy systems? · What workarounds are necessary? - Are they sustainable? · What is long - term strategy for renewing legacy systems? · Legacy Organizations and Cultures How will new infrastructure affect ways of working and communicating? Are anticipated changes acceptable? · Should technology drive organizational and cultural change? · Should organization and culture be protected from technology effects? · What are organizational expectations about common processes in different parts of the organization? · What are criteria for deciding whether systems or process will change when the two are not compatible? Key Questions in Managing Legacies Source: Applegate, Lynda M., Robert D. Austin, and F. Warren McFarlan , Corporate Information Strategy and Management . Burr Ridge, IL: McGraw - Hill/Irwin, 2002. Chapter 7 Table 7 - 4

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