In this presentation we discuss the challenges a company faces when the mainframe is outsourced. We will be looking at what should be considered when contemplating an outsource. Rui talks about his experience in working with companies that have been outsourced, drawing on his experience of over 10 years working for outsourcing companies.

1. Challenges
of
Outsourcing
the
Mainframe
Rui
Miguel
Feio
RSM
Partners
Date
of
presenta:on
(04/11/2015)
Session
<FG>

2. Delivering
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Delivering
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best
in
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services,
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and
training.
World
Class,
Full
Spectrum,
z
Services
Challenges
of
Outsourcing
the
Mainframe
Rui
Miguel
Feio
Security
Lead

3. Agenda
• Introduc:on
• Outsourcing
the
Mainframe
• Outsourced
in
1,
2,
3…
• An
Outsourcing
Study
Report
• Is
Outsourcing
a
Bad
Thing?
• References
and
Resources
• Ques:ons?

4. Introduc:on
Rui
Miguel
Feio
is…
– Security
lead
at
RSM
Partners
– Mainframe
technician
specialising
in
mainframe
security
– Has
been
working
with
mainframes
for
the
past
16
years
– Started
as
an
MVS
Systems
Programmer
– Experience
in
other
pla^orms
as
well
– Has
worked
in
both
sides
of
the
fence:
• For
outsource
service
provider
companies
• For
companies
that
have
been
outsourced

5. Outsourcing
the
Mainframe

6. Why
Consider
Outsourcing?
Companies
see
Outsourcing
as
a
way
to:
• Reduce
opera:onal
costs:
– Opera:ons,
maintenance,
labour
• Improve
services,
technology
• Address
problems:
– Security
– Legacy
applica:ons
– Infrastructure
– Re:ring
IT
experts
• Ul:mately
improve
business
landscape,
increase
share
values,
distribute
beber
dividends,
and
pay
higher
bonuses

7. Choosing
an
Outsourcer
• Typically
companies
select
an
Outsourcer
based
on:
– The
Outsourcer’s
name
and
size
– Cost
• Companies
don’t
focus
on:
– Other
companies’
sa:sfac:on
with
the
Outsourcer
– Technical
requirements
– Risks,
challenges,…
– What
the
outsource
encompasses

8. The
Decision
Makers
• The
outsourcing
decision
makers
typically:
– Have
a
short
term
management
aetude
– Don’t
have
a
“feel
the
Company”
Culture
– Are
not
interested
on
aJer
the
facts
– Are
not
liable
for
making
the
wrong
decisions
– In
some
cases
are
egocentric
– May
or
may
not
have
an
understanding
of
what
a
mainframe
is
and
the
importance
of
it
for
the
company

9. The
Focus
• The
focus
of
the
decision
maker
is:
– Pass
the
responsibility
to
a
3rd
party
– Bonus
=
costs
reduc:on
+
increase
share
values
– Pass
responsibility
+
Bonus
• Important
aspects
are
overlooked
or
seen
as
:cks
in
a
box
only
without
actually
considering
if
they
are
real
or
if
they
apply:
– Technical
benefits
– Business
benefits
(performance,
availability,
support)

10. The
Outsourcing
Conundrum
• Companies
see
outsourcing
as
a
way
to
save
money
• On
the
other
hand
outsourcers
want
to
make
money
• Can
you
see
a
problem
here?

11. Let’s
Meet
to
Discuss
• All
par:es
get
involved
but
not
all
of
them
have
a
saying:
– Outsourcer
people
– Decision
makers
– Managers
– Project
managers
– Project
managers
– Project
managers
– And
some
more
project
managers
– Some
technical
people…

12. The
Company’s
Aetude
• ‘Blinded’
with
the
idea
of
saving
money
most
of
the
:me
a
company:
– Assumes
everything
will
be
covered
by
the
outsource
– Doesn’t
read
the
the
documenta:on
provided
– Does
not
review
their
own
documents
(processes,
procedures,
etc.)
– Does
not
consider
proper
knowledge
transfer
– Does
not
ask
pertaining
ques:ons
– Fails
to
listen
– Fails
to
assume
responsibility
(IT
infrastructure
has
a
direct
impact
in
the
business)

13. Technical
Team’s
Input
• The
technical
people
try
to
highlight
poten:al
problems,
risks,
challenges…
• But
they
tend
to
be
ignored:
– Blah,
blah,
blah,
problem,
blah,
blah,
blah,
risk
– Are
you
being
difficult
because
you’re
afraid
you
might
lose
your
job?
– They
can’t
communicate
outside
the
technical
terms
– No
one
understands
them

14. What
the
Technician
Thinks

15. The
“Elephant”
in
the
Room

16. What
the
Decision
Makers
Think

17. Outsourced
in
1,
2,
3…

18. Typical
Issues
AFTER
Outsourcing
• Things
don’t
work
as
expected…
• Deficient
technical
exper:se
• Lack
of
proper
support
• What
happened
to
the
technical
knowledge
transfer?
• “But
I
thought
that
was
included
in
the
Outsourcing”
• Outsourcer
points
out
to
what
was
agreed
between
both
par:es
• Expecta:ons
are
not
met
and
frustra:on
sebles
in

19. What
Tends
to
Happen…
• Most
of
the
:mes
the
Outsourcer
will:
– Provide
technical
and
non-­‐technical
documenta:on
constructed
with
a
greater
emphasis
in
legal
terms
– Technical
documenta:on
does
not
describe
how
things
are
done
(processes
and
procedures)
– Allocate
the
same
technical
resource
to
more
than
one
client
– Charge
for
every
piece
of
work
not
covered
by
the
agreement
(remember
the
lack
of
processes?)

20. Why?
Because
the
Outsourcer…
• In
order
to
make
money
the
outsourcer
will:
-­‐ Save
money
on
training
-­‐ Save
money
on
the
technical
team:
-­‐ Technical
resources
shared
amongst
different
clients
-­‐ Reduce
the
number
of
technical
individuals
-­‐ Replace
experienced
members
by
cheaper
inexperienced
personnel
-­‐ Only
cover
the
minimum
contracted
services
-­‐ Charge
for
any
extra
service
including
security

21. The
Company
Faces
Reality
• Ok,
there’s
a
problem
with
the
Outsourcing
but
we
need
to
reduce
costs…
• Remember
how
costs
affect
the
bonuses?
• So
in
order
to
keep
the
costs
low,
the
company:
– Will
only
address
and
pay
for
what
is
really
required
–
typically
audit
findings
– Will
not
review
processes
(internal
and
from
the
outsourcer)
– Will
not
review
reports
with
the
aben:on
they
deserve
(e.g.
monitoring,
aler:ng,
access)
– Risk
wise
–
“We
have
a
mainframe.
No
one
hacks
the
mainframe.”

22. Where
Have
I
Seen
this
Before?

23. An
Outsourcing
Study
Report

24. Mainframe
Outsourcing
Report
• Study
commissioned
by
Compuware
to
the
independent
research
company
Vanson
Bourne
in
September
2012:
– “Mainframe
Outsourcing:
Removing
the
Hidden
Costs”
• Study
methodology:
– 520
Chief
Opera:on
Officers
(CIOs)
interviewed
– Large
enterprises
across
a
range
of
industries
from:
• U.S.A
• Europe:
UK,
France,
Germany,
Italy,
Benelux
• Japan
• Australia

25. Why
Outsourcing?
• 65%
of
companies
outsource
mainframe
infrastructure
and/or
management
to
reduce
costs.
• 68%
of
companies
outsource
because
their
in-­‐house
team
no
longer
has
legacy
mainframe
knowledge.

26. Sa:sfac:on
With
the
Outsource
• 67%
of
companies
are
dissa:sfied
with
the
quality
of
new
applica:ons
or
services
provided
by
outsourcers
• 71%
are
frustrated
by
the
hidden
costs
• 65%
believe
staff
churn
within
outsourcers
nega:vely
impacts
the
quality
and
turnaround
:me
of
work

27. Interes:ng
Facts
• 37%
of
respondents
do
not
have
comprehensive
documenta:on
for
exis:ng
legacy
applica:ons.
• 80%
of
respondents
believe
knowledge
transfer
issues
impact
outsourcer
quality
• 54%
have
had
to
increase
investment
in
tes:ng
and
troubleshoo:ng
due
to
the
poor
performance
of
work
being
delivered
by
outsourcers

28. Now
What?

29. Is
Outsourcing
a
Bad
Thing?

30. The
BIG
Ques:on!!
• Is
outsourcing
the
mainframe
a
bad
thing
then?
– In
most
cases
Yes!
• Focused
on
the
wrong
things
• Failed
to
look
into
things
properly
• Failed
to
assume
responsibility
• Failed
to
listen
• Failed
to
plan
• Failed
in
almost
everything!

31. But
Does
it
Have
to
Be
Bad?
• Is
there
any
hope
for
the
outsource?
– Yes!
– You
just
need
to
learn
from
other
companies’
experience
– Select
the
right
Outsourcer
with
a
proven
experience
in
mainframe
outsources
– Organise
yourself,
get
the
documenta:on
in
place
– Have
the
appropriate
teams
engaged
in
the
outsourcing
plan
– Listen,
ask
ques:ons,
have
your
saying
and
put
them
in
wriben
and
get
the
outsourcer
to
agree
on
them
– Make
sure
you
understand
what
you’re
paying
for
and
what
you’re
geeng
in
return
– Make
sure
all
processes
are
well
defined
and
described

32. References
&
Resources

33. References
&
Resources
• “Mainframe
Outsourcing:
Removing
the
Hidden
Costs”,
Compuware
• “IT
Key
Metrics
Data
2015:
Key
Outsourcing
Measures:
Outsourcing
Profiles:
by
Industry”,
Gartner
• “Smarter
Outsourcing
for
SI
and
Client”,
Micro
Focus
• Windsor
Group:
www.windzr.com/blog/topic/mainframe-­‐outsourcing
• Compuware:
www.compuware.com
• Gartner:
www.gartner.com
• Vanson
Bourne:
www.vansonbourne.com
• Micro
Focus:
www.microfocus.com
• B.
A.
Baracus:
en.wikipedia.org/wiki/B._A._Baracus

34. Ques:ons?
Want
to
kill
yourself
aJer
this?
Not
just
yet…
Don’t
do
it!!
There’s
more!...

35. Rui
Miguel
Feio,
RSM
Partners
ruif@rsmpartners.com
mobile:
+44
(0)
7570
911459
linkedin:
www.linkedin.com/in/rfeio
www.rsmpartners.com
Contact

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