All posts by Darin Archer

Selecting an Offshore Country for IT Services

As an outsourcing consultant working for Accenture, I am regularly presenting on “Why Accenture?”. However, today I was challenged with a new question from a client. Why China? As the IT outsourcing services industry continues to expand in both it’s offerings and locations, many companies are confused as to what locations they should leverage. It is important to keep in mind that location choice should be based on the project requirements. Everyone wants to minimize costs associated with IT. However, there are many more intangible costs outside of the standard hourly labor rates that can dramatically impact your projects success. For example, if you have a small project (~ 5-15 resources) that requires more significant real-time interaction over the course of a year, you will likely want to leverage an onshore or nearshore location. If you attempt to use an offshore location with these project requirements, you will likely find that the increased attrition (due to requirements of people to work grave yard shift) and telecommunications costs could outweigh the labor arbitrage. As the demand continues to rise exponentially, new markets become attractive for mitigating rising costs in the primary locations such as India. Having done some external research on the location topic, I’ve included my findings below for reference. Feel free to contact me directly if you have additional questions.
References:

How much of IT should be outsourced?

As outsourcing has exploded in the last couple of years both in practice and mind share, many CIO’s have more questions than answers. For example:

  • What percentage of my IT organization should be outsourced?
  • How can I cut costs out of my organization while still delivery new capabilities to the business?
  • How can I consolidate the number of vendors I use today, and how many vendors should I work with?

As an outsourcing consultant, I grapple with this question every day. And every day, with each different client or application space, I come to different conclusions. It seems there is a lot of variability to the answer depending on a particular IT organizations process maturity, industry, country, technology platforms and availability of local talent. Yet, today as I was catching up on my reading of CIO magazine, which was discussing the next generation of IT, I challenged myself to come up with a “simple” answer. Below is my first attempt at designing the IT organization of the future, if I were the CIO. I’d enjoy getting any feedback you might have on this idea.
IT_outsourcing_pyramid.jpg
CIO
Responsible for overall IT strategy and operations. This role and supporting team would provide overall leadership and direction.
Architects & Program Management
Managing the needs of the business and the resource bandwidth would primarily be executed by the outsourcing partner that would bring deep program and project management experience. Continuous evaluation of the IT operations technology platforms and future design would then fall primarily on employee architects that would feel ownership of their companies direction and capabilities. The outsourcing partner would then supplement with technology specific architects as needed.
Business & Systems Analysts
Driving the next generation of IT will require more business focused IT workers identifying and designing new ways to do business and generate top-line growth. The outsourcing vendor would provide support in methodology and domain or application specific experts that could rotate in and out to bring industry best practices from other clients.
Developers, Testers and Support Operations
Majority of workforce can be managed more effectively and less costly by a vendor with centralized development centers. Entry level employees would work with the vendor initially to build foundational skills for future roles.

PowerPoint Search

The power of desktop search programs such as those by Google, Apple and Microsoft are impressive. I am a very organized person with a folder structure that usually allows me to find what I am looking for quickly. Yet, I have found myself gradually moving away from the depth of my folder organization structure to using the desktop search to pull up the same files. However, the major gap is non-text content such as images and video files that remain challenging to find over time. Yes, you can spend your life adding enough meta data to your image and video files to allow for better searching later, but I think it would be easier if an application allowed me to quickly scan available images or videos. One specific application I have for this tool is to be able to scan all the PowerPoint slides I have on my machine. Often, when I am putting together a PowerPoint presentation, I have an old design in mind. It could be an old deck that had a similar message or maybe just one slide that had graphics or a layout similar to what I intend to make. I’d like to see this capability today as I need to find the slide that has a pyramid representing different layers of an organization. 🙂

Fun Things To Do “.com”

I am trying to come up with some ideas for some fun things to do outside of my normal itineraries. Similar to my idea about half priced events, it would be great if one could go online and get new ideas for something fun to do. I’ve looked at many of the events listing type sites, but they only show you what is going on with respect to a particular date and type of event. But, what if I just want something new to do that I don’t know about? It could be a place I’ve never been or something as simple as playing tourist and renting one of those three-wheeler scooters (something I’ve been meaning to do). Seems like this should exist (and I’m sure it does somewhere). My first thought was funthingstodo.com. Unfortunately, the owner hasn’t launched the site yet. If I owned it, I would set it up to be a craigslist type moderated list engine that provided a categorical list of fun events by location, type, cost, etc. Then people would have the ability to list their ideas (social moderation would keep it clean, fun and organized).

Product Pricing Strategy

With the advent of the iPod and iTunes, everyone is trying to get into the game of providing instant access to video and music. The one point I want to make is that these companies need to rethink their pricing. I was in a hotel a few weeks ago and was shocked at how much it cost to play a movie on demand. I thought, “Do they realize I have a Netflix DVD in my bag and a couple downloaded movies on my laptop?” Pricing strategy needs to be focused on more. Quantity in this game is the goal.
Let’s take the above example and illustrate my point. If the hotel charges $6 to download a movie, and we assume that 10% of guests take advantage of the service, and you have 1,000 guests, that’s $600 in revenue. Now, change the price to $1 per movie, which would drive more usage. Assume that 80% of guests play a movie on demand (many would start movies that they didn’t even intend to finish at $1). At this rate, you make $800 a 33% increase in revenue (break-even is 60% adoption of service per guest). As you can see, changing the price can have a dramatic effect. Now, this is all basic pricing strategy taught in every business school, but why am I seeing these overly priced services. I mean come on, I realize that Apple has sold over a billion songs via iTunes, but I wonder how many songs would have been purchased (rather then pirated) if the cost was $.25?

Metro Wi-Fi and Mobile Billing

As I walked to the grocery store today, I thought again about the infamous meter maid. It dawned on me that as these metropolitan wi-fi networks are deployed, the city could leverage this network to provide many new services that could either increase revenue for the city or lower costs. One thought is to change the meters to take a credit card (or some form of future electronic payment). The meter could validate the card through the metro wi-fi network and run off a solar panel and battery. They already have an electronic parking meter for the cellular networks, but I’m guessing that a wi-fi version would be cheaper.
Also, imagine all the outdoor vendors that could process credit cards through mobile devices. Making the Internet ubiquitous should prove interesting.
Update 1-11-2007: A few days ago I was in Hong Kong and saw a parking meter that used their ubiquitous Octopus card. This RFID smart card made it very easy to pay for parking, something every city in the world should adopt.
RFIDmeter.jpg
An additional example of use for the Octopus card:
711octupsreader.jpg

Reading Sources

The following is a list of resources I regularly track to gain insight about the latest and greatest.

Newsletters:

Revolution of the Digital Home Entertainment System

After seeing Microsoft’s offering for the living room at the Consumer Electronics Show this year in Las Vegas, I was actually sad when Macworld (held the following week) did not announce a similar “living room experience”. It was anticipated that they would announce a new Mac Mini, but the conference came and went.
Yesterday, on the verge of Apple’s 30th birthday, they finally released the new Mac Mini at a private event. In typical Apple style, it was a secretive, invite only affair that everyone wanted to be at. At it’s core, the future was displayed in the upgrade to the Mac Mini product line, which is less then a year old. The new Mac Mini, not only leverages the new, faster chip set from Intel, but provides a truly digital, home entertainment system at a price point that seems unimaginable (when compared to the stereo components and computer it can replace). The new Mac Mini, smaller than a box of Kleenex, connects to your TV and stereo system allowing you to surf the web, edit home movies, watch DVDs, and email from your couch.
I have the first version, which didn’t include the remote control capabilities or what is known as “optical outputs” for the latest technology in sound output. It’s been the most pleasant computing experience of my life. It simply works. It maintains itself and provides more things for me to play with than I have time for.
For those of you that don’t yet have a computer hooked up to your TV, this is the one you want! While most of my blog entries are focused on my own ideas, I had to write about this event. We are finally to the point where computers are leaving the office desktop and showing up in our living rooms, pockets and cars. They will connect us to everyone and everything in a time frame that will seem faster then the advent of the Internet. I imagine that within a couple of years, most of my dreams of an integrated multi-media lifestyle will be available. Broadband in the homes, Wi-Fi in every coffee shop and soon to be city, third generation cellular networks, all provide the communications platform for these new devices to share all of our personal media with us anywhere we are. Watching your TiVo’d episode of your favorite show will be just as easy on the bus as it is in the home.

Firefly Mobile Phone

Almost a year ago, the little firefly hit the wireless scene with its lively glow and child accessibility. It’s a phone for kids. It makes it really easy to call mom and dad, and for mom and dad to call their kid. It’s got only a few buttons to keep things simple and provides complete parental control. As a wireless geek, I have to comment on what I think is one of the cutest gadgets I’ve seen. It’s got to be one of the coolest toys in Toys R Us now. And with any first generation device, there are a lot of other things this phone could do in the future. While I don’t have kids today, I was one and remember how my over protective mom always wanted to know how I was. Having lived in two households, I also know how valuable it is to the kid to have a way to reach both parents whenever they want. Below outlines my initial thoughts on the current product and ideas for Firefly Mobile’s future.
Safety
The 911 button is a great start. Add a GPS to the phone so that you can offer the e911 service that allows our 911 centers to better determine the callers position without requiring their input, and you’re really set. As I see it, with kids there are a million possibly scenarios of them getting themselves into trouble or it finding them. I’d go beyond 911 & e911 and add an alarm function that blasts a high pitched alarm sound when activated. This could be used for those situations where they’re stuck in something or even worse, someone is trying to take them somewhere they don’t want to go. None of these measures handles all situations a kid could find themselves in, but the more mitigated the better.
Location
Presence has become a popular term and concept with the advent of instant messaging. Most versions now even show when the person is on their computer versus a mobile phone and some are getting smart enough to tell the difference between someone at home and at work. But, what about true presence? This is a valuable concept when it comes to parents. Knowing where your kids are can be invaluable to a little comfort while at work. The next generation firefly needs to better integrate the GPS technology available today. The firefly should not only let parents call their kids, but should let them know where they are and notify them if they leave a predefined safe zone. Learn more. This is the key feature of the Wherifone by Wherify Wireless.
Communication
As our wireless infrastructure and technology advances, so will our abilities to communicate. It seems to me that mom or dad would much rather see their little ones face then simply hear their voice. My bet is that we’ll see versions of these kids phones in the short future that allow video to be sent and received. Imagine what a parent would pay to see their kids smiling face at lunch time. Thankfully, these aren’t for teens! Imagine having your mom trying to see what you’re up to…
Additional Ideas

  • Quick Messages or Alerts – provide parents the capability to send a text message to their child reminding them of something they need to do or where they’re suppose to be; could be SMS or email
  • Calendar Function – kids schedules are almost as crazy as a business executive; keeping track of it all could be easy with a web based calendar that sych’d with the phone similar to Danger’s Hiptop
  • Games – can’t we let them have snakes at least! make them cherish it so it doesn’t get lost easily
  • Lights, Camera, Action! – why can’t they have a way to take pictures and send them with little messages to mom, dad and the grandparents

…more as I think of them.

Mobile Virtual Network Operator (MVNO) Strategy for Carriers and Brands

Mobile Virtual Network Operator, or more simply MVNO. It seems the buzz would have you believe that within a few years we’ll all be carrying Captain Crunch, Corona or Pepsi mobile phones. Maybe we well. Seems kind of fun to me. As our global society continues to be obsessed with promoting the hottest brands on everything we own from our feet to our ears, why not have a branded cell phone that goes beyond just the case! I have two thoughts on this subject. One, I think the carriers need to take control of this more or they’re going to loose out on more revenue then they need to and two, big brand companies out there like Louis Vuitton and Disney could take the experience much further.
Let’s start with the carriers. The infrastructure costs related not only to the networks themselves but also the customer management and billing systems is enormous. It seems a waste to make the MVNO build out this infrastructure or worse yet give up this potential outsourcing revenue to a third party such as Visage Mobile, who will provide these systems for the MVNO to integrate with whatever carrier they’d like. The carriers themselves should setup their systems to be flexible enough to manage these MVNOs and take a large cut of the revenue rather then just the whole sale rates of the network usage. Additionally, economies of scale can be created by leveraging large call centers to support multiple MVNOs keeping the costs down for everyone.
Regarding the MVNO’s themselves I think the big opportunity is integration. Let’s take the Louis Vuitton brand for example. If they were to create an MVNO that was super high end, they could not only drive customers to their stores and product lines, but create a need for increased purchases. For example, if LV setup the service to be high-touch customers would be coming in to their store every time they had a problem or wanted to change their plan. Now, given the market, I’d jack up the price of those cell phones to the point that they were disposable so that when that customer walks in with a problem the store person just gives them a new phone and sends them on their way. Not to mention make sure they have the latest mobile holder that came out this week. Big brands becoming MVNO’s open up lot’s of opportunities to better integrate themselves with their customers. They can immediately increase customer insight on buying habits, etc. by monitoring their calls and or web sites visited from their mobile phone (all in aggregate of course to protect privacy). Additionally, they have a way not to directly contact their customer based on their preferences. For example, Disney could do everything from send SMS coupons for Disney Land to the latest program guide for ABC’s lineup.
I’m still looking forward to Apple coming out with a mobile phone and possibly an MVNO play too, but I’m even more curious about when The Quaker Oats Co. is going to have Captain Crunch cell phones for kids!