IT outsourcing: across the barricades

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    Topic inspired by arguments xldsakamrhahn System administrator or outsourcing? about the quality of service by outsourcing IT companies. This article would like to show how IT outsourcing for small and medium enterprises is a difficult and highly scalable business. Today, technologies have become much more complex and capricious than before, and every year the situation becomes even more complicated, old technologies are replaced with more new ones, the knowledge and experience of a specialist without constantly updating them and monitoring trends quickly lose their relevance and become unnecessary. It’s not for you to fix TVs; in the IT sphere, devices are much more advanced and complex.

    The costs of most customers for IT services are equal to the costs, for example, for utilities, i.e. the cheaper it is, the better, the greater the profit and it is no secret that a small business, like no other, counts every penny. However, you should not set the price of services as the main criterion for making decisions on cooperation with an outsourcing company and after reading this opus to the end you will understand why. Also, at the end of the article, a small IT company (up to 10 people) is waiting for a tasty bonus.

    But let's look on the other side of the barricades, for the service company it’s the other way around - the more the client pays, the more profit.

    In fact, by providing services, outsourcing companies sell their time / time to their employees. Consider that in a workweek 8 hours * 5 days of the workweek = 40 hours of the system administrator’s work at 100% load, but it is unlikely that the employee will work hard for all 8 hours a day without regaining consciousness. The likely return in the region of 50-60% (if you successfully establish a workflow), i.e. Subtracting your arrival at work at exactly 9:00 a.m., coffee, breaks and transfers will leave about 20-25 effective hours of work per week. We multiply, say, by 4 administrators, and now you have at your disposal fixed working capacities not exceeding about 100 man-hours per week. With, say, 20 clients, there will be about 5 hours a week for each client. Many? Few? Keep in mind that at this time also includes time for trips and equipment delivery,

    And here is the task, how to make the ratio of time spent / quality of service / cost optimal? How to parallelize processes?

    Here are the following approaches:

    1. Most of the outsourcing companies working in this market prefer to limit the number of visits and take money for additional visits over the limit. Everything is fine, how to increase the profit of an outsourcing company? The first way is to make more additional trips, more trips in excess of the tariff plan limit - more money. In this case, it is beneficial not to treat problems, but to provide a service for patching holes. More admins - more clients can be served in this way, more profit. The disadvantages are obvious, admins have no reason to make qualitative changes to the infrastructure, it’s more profitable just to come again and treat another incident.

    2. But the second approach is so far our know-how, and among all the companies in Kiev, for the time being we only offer exactly this approach from the very beginning. We thought, is it necessary to increase the number of trips to increase profit? And if you try to increase the cost of a specialist’s work? Then, after all, you can hire more qualified personnel and provide better services. How to make it beautiful and unobtrusive? It turned out that with an unlimited tariff plan at about the same tariffs as in the first case, it makes sense to set up work as efficiently as possible, so that at the same fixed rate for the client, the number of calls / departures is minimized. And then with fewer departures and the same fixed rate, the cost of an hour of work automatically increases! And this is exactly what what the client needs is less problems and what we need is a higher rate of an employee’s work hours while maintaining high quality work. Conversely, if a large number of incidents occur, the cost of an expert’s work hour automatically drops. Looking ahead, I’ll say that in practice this approach works with many reservations for a spherical client in a vacuum.

    That is why a poor-quality employee not only does not make a profit, but also indirectly creates losses, as it requires control and “cleaning him”, creating additional time costs.

    3. Net hourly hours, taking into account the difference in rates for the qualifications of the contractor required to solve the tasks. This is probably one of the most correct approaches, however, there are significant difficulties at the start with the availability of the necessary specialists, criteria for assessing qualifications and determining the cost of expenses. As an exercise, you can try to estimate the cost of an hour of work of an expert in Exchange, Sharepoint, and enikeyschika.

    Separation of functional responsibilities.


    Unix? Yeah. We can do it, but better not.

    Case number one.
    A year ago, talking on the phone with the director of a competitor, I heard the phrase “not without pride,” and here we are starting to deploy servers on clients on Linux. ”

    Case number two.
    Six months ago, a potential client called us with an unusual problem: “we have such cybernetics here, we can’t get away with our incoming system administrator, since no one knows these technologies except him and we are afraid that we won’t be able to work when he gives us everything will break remotely, he began to interfere in the affairs of the company and this is not good. ” The client subsequently did not dare to cooperate with a serious alteration of the infrastructure.
    But according to the results of our audit, it turned out that two Linux servers worked as a cluster, running in a virtual machine under xen and a company web server and a domain controller under samba and VPN with a remote branch and other amazing things.

    Yes, we have freebsd servers on colocation and other interesting technologies on * nix systems in the farm, and the same asterisk telephony, however, we try to implement reinforced concrete, life-tested, simple as a nail and clean as a tear of a virgin, solution. Instead of a linux router, we would prefer the installation of linksys wrt54gl, or dlink dir-300 (400) not because we are not able to configure Linux, but because the client will continue to live with it. And even if the client prefers to switch to servicing to any other company, specialists with even a not very high skill will be able to maintain life in windows servers and box-routers.

    The introduction of new technologies is a useful and necessary thing, but it is preferable to think 10 times, is it worth it? If we introduce, for example, a server for citrix, then we need to think about whether there are at least two specialists of decent qualifications who can replace each other on vacation, or, God forbid, injuries? Is it worth it to take the additional burden of accompanying the decision if there is no clear answer to the question “what if it goes wrong as planned”? And surely the introduction of additional technology will entail our additional time costs for solving problems.

    To assess the feasibility, we also save money for the client, for example, if there are no strict requirements for the availability of a mail server inside the company, we do not implement the mailer inside, do not install an additional server, do not charge an additional fee for its maintenance and periodic adjustment of the anti-spam filter, but just deploy the mail on google hosted services and everyone is happy.

    Clone your brain.


    I am deeply convinced that the outsourcer should be run by a person who knows the pitfalls of the profession and has grown out of the pants of a self-organized, disciplined and responsible system administrator. For me, there was a real revelation when considering the purchase of a competitor who decided to close the business. Surprisingly, it is a fact - the company was run by a person who has no relation to IT! The model of work is the departure of a specialist from morning to evening for customers, one can say "like a mouse in a circle." Perhaps we would be interested in buying a customer base, but it consisted mainly of customers such as government organizations located outside the city. There is a separate conversation about state-sponsors in general, people don’t come to work there, so we are going to avoid cooperation with such clients.

    Handling calls and calls.


    Obviously, the best thing when calling us is not to get to the robot with a voice greeting (everyone loves human communication) and not to the office manager who will only record the appeal, in most cases not going into details and not specifying, but immediately to a competent specialist who, if possible, will immediately try to give a qualified answer remotely, either remotely solve the problem or delegate its solution with the necessary clarifications. But what if the specialist on duty went on a trip, or went on a smoke break, because often their workload and employment are high? In this case, digital telephony comes to the rescue, with which we:
    1. If there is no administrator on duty, the call will be forwarded to the mobile numbers in a chain.
    2. Each call is recorded in the log automatically with the caller’s number, and if suddenly the call was not processed, we will call the client back with a clarification.
    3. In the future, there will be a finalization of the internal web-based application accounting system with asterisk integration like CRM (there are difficulties with the cost of the GSM-SIP gateway and the time to finalize the system).

    About business processes of customers.


    Not all companies understand their mission and in general what it is. In our country, it sounds something like this: relieving a client’s IT headache with reasonable savings. In most cases, IT has the function of ensuring the uninterrupted production business processes. Therefore, a deep understanding of the business processes taking place in the client’s company ensures success in the provision of services. Knowing what is critical to production and what is secondary allows you to concentrate on what is really important and not to waste time on the “search for the grail”. We do not have the right to implement unverified solutions, we do not have the right to play games on customer’s equipment with a self-taught bias if this jeopardizes the reliability of business processes. For someone important is the application for working with customs declarations and mail, and some of the clients do not use mail at all, and most importantly - 1C stable operation. The secret of success, simple as a door, is just revealed - each client has his own, individual approach. This does not always work, and not everywhere, very often in small companies business processes have not yet been formalized, in other words, it happens that “they themselves don’t know what they want” and the organizational structure (hierarchy) can be quite blurred, for us this translates into the fact that we don’t know with whom to solve financial or organizational issues, so we decided to simply add a clause to the contract, which indicates the contact persons and their area of ​​responsibility.

    It must be clearly understood that the system administrator not only provides computer treatment services, but also builds interpersonal relationships with each of the client’s employees, so the appearance of a new administrator is accompanied by varying degrees of complexity.
    A typical company with 15 jobs usually has 15 employees, which means that the specialist will face 15 different characters, behavioral patterns and possible manifestations of psychological disorders of the client’s employees. Add here the knowledge of the nuances of the work of the technique (someone has mailboxes more than 7GB, yes) and it becomes clear that transferring knowledge from one administrator to another becomes completely difficult. Therefore, “in the subject” should be a cluster of at least two specialists who know the entire situation of the client, so that, in the event of force majeure, the new fighter could pick up the banner that fell out of the hands of his colleague and proudly carry it further.

    Knowledge Exchange.


    The introduction of a knowledge sharing system is not only desirable, but also essential in the work. The wiki mechanism is just what we need in our case. However, the wiki also requires control over filling and updating (should someone draw client network diagrams?). The principle of documenting everything and everything should become fundamental in the work, otherwise the knowledge will go away with your employee.

    Solving the problems that arise among users is also worthy of a separate verse in our service song.

    The following communication chains are possible to solve problems:
    1. Client employee - admin. Perfect chain. Other interaction options will add a “spoiled phone” effect.
    2. Client employee - client secretary - admin.
    3. customer’s employee - client’s secretary - leading manager of the outsourcing company - admin
    4. Since we use a self-written application registration system. You can add a ticket to this link on the website.
    client employee - website - admin with their variations.
    5. and so on. The

    number of interaction combinations you can calculate yourself using combinatorics skills based on the data: client employee, client secretary, client guide, admin, website, admin guide. Slushy, how is it, wah?

    Problems of a communicative nature.


    One administrator can speak well, the other is good at listening, the third is good at diagnosing and solving IT problems, the fourth writes beautifully. How many people can you find with all these qualities for an adequate salary? Experience shows that the task from the series of searching for needles in a haystack, which once again gives reason to think about keeping the specialists found (keywords: lunches, mobile phones, transportation, general microclimate in the office, salaries).
    Do you want to tell me what the mistakes in choosing an employee lead to? He got angry and rude, for example, or imagined himself to be God, or did not close the problem in time, emphasize the necessary. The client’s employee goes to complain to his management, the management passes the complaint to me, I pass the pill to the administrator, in case of relapse, separation should follow.
    Why is this all? All this leads to the loss of the client, and as a result, the source of income for the content of the same admin.

    Fixing the work performed. SLA


    Axiom: every customer request should be recorded. Everyone who faced the need to report on the services provided understands the value of this axiom. It is also extremely useful to record the time spent on solving the problem in the reports for internal use and optimization of business processes. How much time does it take to close a ticket, how much time is spent on a client, how many tickets a client has created and analysis of cause-effect relationships, what is the efficiency of each system administrator? How much to give bonuses and based on what criteria? All these questions must be sought and given reasonable answers.

    Typical problems in working with a client.


    1. Not all users are able to clearly and clearly explain the problem by phone or in another way, which complicates operational diagnostics.
    2. The problem that a client employee has encountered is already initially positioned as VINA SISADMINA.
    3. Viruses. There is an eternal war of good and evil and the problem is as old as the world, in any case, first a new evil A1 / H1N1 appears, and then the antiviruses learn to catch and neutralize. Mandatory measures are the closing of port 25 for all hosts except the mail, and rolling windows updates by installing an office WSUS server, which, however, should be closely monitored and selectively approve updates (additional time costs), because everyone knows the situation with licensing products, when with the next update the product is no, no, and it will start asking for money for activation (vendors, excuse me, how will the country's policy change - we will buy everything).

    PROFIT.


    Today, the regular expenses of the company account for 70% of staff salaries, 20% of office and utility costs. Once I decided to create a company in which I myself would like to work, and therefore we have free lunches for employees, albeit small but white salaries, payment of expenses for mobile communications, motor vehicles for the summer (but often breaks down, infection) . With the growth of the client base, the ratio of office expenses to income decreases faster than salary expenses.
    In profit, there is about 25% of irregular income - a one-time client, laying a network, design work, purchasing equipment on order.

    Growth and scalability issues.


    Here the average client brings income in the amount of UAH 2500-3000 (about $ 300-350), however, you yourself can come to this figure by calculating the cost of service on our website on a tariff calculator (most companies make a secret of their prices). 10 clients will bring about $ 3000- $ 3500 per month, of which $ 500 for salaries of 3-4 administrators will be about $ 1500-2000. Add the cost of lunch, office, mobile phones and so on and it will become clear that the tariffs on the site are currently underestimated. Because in most cases, the client is primarily interested in the price of the issue, frequent cold calls with questions from the series “How much will it cost to service xx computers and yy servers?” And not a word about HOW it will be serviced. Based on the foregoing, the value for the company of each employee is understandable, as well as how difficult it is to find and educate the right one, and as a result, if 4 new clients come to us in one week, we physically will not be able to take them all into service! So it turns out that a large client comes to us - we are not ready to serve due to lack of hands, actively expanding the staff does not work out due to a small profit, here comes a smooth and slow growth with the arrival of new customers while honing the edge of our business processes.

    And this is fundamentally different from "bought 5 boxes of fish, sold, profit."

    I also fully understand the fullness of the market with students who “have enough for beer, okay” with a service price that is two times lower than ours and with appropriate quality, but at least 3 clients came to us after “tasted such a service”.

    Are there fakapy?


    There are, but, fortunately, this is more likely a rarity than a rule. This is practically the only case that I don’t even want to recall about, which took place just recently, due to the negligence of one of our employees, the chief accountant of the client lost part of his work in the 1C database, because the database was located in a ball on the server, and the virus from the Kido series dropped the “network browser” service on the server with enviable regularity, i.e. access to the ball fell off, DBF database was not recorded. The problem was not diagnosed by the employee in a timely manner (there was not enough qualification to understand why services on the server for no reason fall) and was not closed for quite some time. Such an incident led to the involvement of a third-party IT specialist who, with the help of two patches, became a national hero. Our image was trampled below the plinth and led to a breakdown in relations with the client with a refund on our part for the entire period of cooperation (4 months) plus “penalties”. Well, we swallowed it, made the right conclusions, and, having picked up the snot, we work further.

    And finally, comrades, do not forget about the criminal liability for installing "unlicensed software", which may well be the reason for closing the business. And, if you carefully read the license agreements, you must “knock where you should” when you discover the use of unlicensed.

    To summarize, let me note the idea with which the narrative began, how difficult and weakly scalable the business is with such an organization of the process. Often you want to raise your right hand up and drop it sharply with the words "well, it's all on ... it's IT", but, fortunately, it goes away. We’re doing what we love, aren’t we?

    Because, ladies and gentlemen, if not us, then who?

    Promised Bonus: Microsoft has a special bonusMicrosoft Active Pack Subscription licensing program for small IT companies , the issue price is $ 300 per year, and for this you get licensed for your organization 10 copies of windows (including 7k) and licensed each server product released by Microsoft in a single copy for 1 year validity plus getting automatic licensing per unit of each new server product. Licensing can be renewed at $ 300 each year.

    Good luck to you and your customers, and may strength come with you.

    Sincerely, Maxim Prokopov
    IT-Premium company,
    Kiev, Ukraine

    Links:
    our site
    RTFM book of a successful outsourcer (Moscow)
    Microsoft Active Pack Subscription

    Used jargon:
    skill - English skill,
    profit skill - from English
    Fakap profit - from English. fuck up, screw up
    comrade - from English. comrade, comrade

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