November 12, 2001

The Perfect Balance

A message brokering approach may be the best way to give IT decision makers the realtime information they need to manage services efficiently

By Kemal Delic, Laurent Douillet, & Umeshwar Dayal

People, technology, and processes are the principal ingredients of any outsourcing business, and maintaining a delicate balance among them is crucial for success. Reducing inefficiency - lack of speed; waste of resources such as time, space, and bandwidth; or the sloppy execution of processes - is a common objective in managing those ingredients.

One solution is to give IT decision makers access to realtime information that will help them take timely business actions such as reorganizing processes and reallocating resources. In this article, we'll describe an architecture that enables realtime decision making for a typical IT outsourcing business as well as any IT department, taking into account complexity and size (the price-benefit ratio being the critical decision-making factor here).

Outsourcing Business Landscape

The estimated size of the outsourcing market today is between $120 billion and $160 billion, with business-process outsourcing having the strongest growth rate. The business takes three principal forms: management of IT infrastructure (networks, servers, applications, and help desks); leased processing services (transaction processing, email, payroll, and back office); and management of business processes (supply chain, logistics, and human resources).

The essence of outsourcing is to take advantage of economies of scale by sharing infrastructure and resources among many customers. Sharing infrastructure and resources generates interesting implications:

• It enables the virtualization of tools, systems, and resources, thereby aiming to create the illusion for each customer that he or she is the exclusive user of the services and is not affected by the presence of other customers. An analogy would be an operating system, which virtualizes hardware resources and enables the transparent provisioning of services to a multiplicity of users and applications.
• It requires balancing possibly contradictory deal and performance requirements; for example, the service must be both inexpensive and secure, or both inexpensive and scalable. Architecture decisions have to be made based on the size and requirements of various deals.
• Because direct competitors may have to be supported on the same deal, the protection of their intellectual property must be guaranteed. In particular, this goal requires that reverse-engineering of partners' services be disabled, and that the security of data and processes of the various partners be ensured.

Outsourcing offers the "magic" of transforming enterprise assets and goods into services (and vice-versa), thereby giving rise to the "information utility" industry. Outsourcing represents an important element of today's world economy, enabling computing power, storage capacity, and application execution to be offered and bought as services in the same manner as commodities such as electricity, gas, or water. The key benefit for the customer lies in the rapid business-rescaling capabilities (up or down). In the case of a rapid surge or drop in the market, the customer can easily fulfill needs without buying new equipment, more bandwidth, or hiring new, skilled personnel. Similar reasoning can be applied on the downscale side.

In this article, we will limit our discussion to the responsiveness dimension of the outsourcing architecture. Keep in mind, however, that reliability, scalability, dependability, and security are other important dimensions of this architecture.

Outsourcing Business Management Platform

Managing any system entails establishing closed-loop control, in which the managed system is monitored, and optimal corrective actions are taken to keep key operational parameters within prescribed ranges. (See Table 1.)

As we discussed earlier, managing an outsourcing business involves efficiently and effectively managing people, processes, and resources. Doing so requires a management platform that enables the monitoring of the whole business domain, while providing the means to interact quickly and appropriately with the managed domain in response to various real-world circumstances.

A decision-support system for the outsourcing domain enables human decision makers to know more, to know better, and to know sooner. The first two aspects are tackled by using middleware to integrate various enterprise systems into an orchestrated decision-support system (DSS). The last aspect essentially introduces time constraints into various layers of the DSS aimed at minimizing the overall propagation time for relevant information to be delivered.

Most outsourcing business management platforms support operational centers and help/service desks that respond to events and calls from the managed domain. (See Figure 1.) Equipment, operating systems, servers, applications, and desktops are all instrumented in providing continuous data and information streams. These streams are captured in realtime databases. In addition to the operational data stores, data warehouses may be created for decision support, reporting, and data mining. Problematic events are detected, correlated, filtered, and finally transformed into workflow trouble tickets. Operation center analysts are responsible for closely inspecting the trouble tickets and dealing with the problem until the case is closed.

Similarly, users who have problems call the help desk analyst, who creates a case in a workflow system, works on the user's problem until it is resolved, and then closes the case. These activities are usually supported with knowledge bases that contain solutions to the large variety of problems experienced by customers. Significant investments are necessary to create, deploy, and maintain such knowledge base systems. Customer information is typically stored in a centrally accessible database.

In the managed IT domain, the outsourcing vendor typically provides system and network management and hosts various applications such as Web servers, database servers, file servers, email servers, and so on. In certain cases, desktop management is outsourced as well, so that the vendor provides desktop software distribution, upgrades, daily maintenance, and troubleshooting.

Managing the outsourcing business involves deploying several intricate technologies and involving people who participate in well-established and well-managed processes. In this complex, expensive, and uncertain domain, decisions about IT architecture are critical. Within the conceptual architectural framework for IT outsourcing, the realtime decision-support system mediates between the running business and various decision makers. The complexity of the system derives from the nature and scope of the supported business and the information needs of the human decision makers supported by the system.

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