Outsourcing of the IT department

Via Rajesh Jain : Economist writes about the new trend in outsourcing of IT infrastrucutre management services :

India's outsourcing boom started with software development and has expanded into a whole range of business services that can be handled a continent away, of which the country's hundreds of call-centres are just the most prominent examples. This takes that trend one stage further, and shifts offshore much of the administration and maintenance of a firm's IT systems. Gartner's Partha Iyengar divides remote IMS work into three categories: monitoring global network operations; providing helpdesk support and maintenance; and administering databases. 

It is as yet a small part of India's IT business. According to NASSCOM, the Indian industry's lobby, the country's exports from the software, other IT services and business-process-outsourcing industries grew by more than 25% to $12 billion last year, of which infrastructure services accounted for just over $300m.

But the potential is huge. A report by Deutsche Bank puts the entire size of the global infrastructure-management market at $86 billion. Firms have been outsourcing infrastructure management for years. Arno Franz, of TPI, an outsourcing consultancy, describes it as an industry created in the 1970s and 1980s by EDS, an American giant that came out of efforts by General Motors to automate its car plants. Along with IBM, EDS still dominates the business. Often these firms would actually buy their clients' computer systems. Or they would have annual maintenance contracts. Either way, their customer had fixed their information-technology costs and were free to concentrate on their “core competencies”.