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

Delivering  the  best  in  z  services,  soJware,  hardware  and  training.  Delivering  the  best  in  z  services,  soJware,  hardware  and  training.  

World  Class,  Full  Spectrum,  z  Services  

Challenges  of  Outsourcing    the  Mainframe  

Rui  Miguel  Feio  Security  Lead  

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?  

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  

Outsourcing  the  Mainframe  

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  

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  

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  

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)  

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?  

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…  

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)  

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  

What  the  Technician  Thinks  

The  “Elephant”  in  the  Room  

What  the  Decision  Makers  Think  

Outsourced  in  1,  2,  3…  

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  

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?)  

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  

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.”  

Where  Have  I  Seen  this  Before?  

An  Outsourcing  Study  Report  

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  

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.  

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  

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  

Now  What?  

Is  Outsourcing  a  Bad  Thing?  

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!  

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  

References  &  Resources  

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  

Ques:ons?    

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

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