Infrastructure Outsourcing and

Your Business

The growth engine of any organization depends onrelentless focus on customers and business innovation. ITplays an important part here in ensuring smooth functioningof this business growth engine.

The IT infrastructure that makes the business run is a welloiled machinery that goes into a change mode whenbusiness decides to focus on the customers and businessinnovation. Essentially it means three things: shift spendingfrom operations to innovation, enabling agility/flexibility, andmanaging risk.

The goals of IT cost reduction include freeing up resourcesto focus on core competencies: enhancing solution/servicecompetitiveness, generating revenue from new businessdevelopment, and streamlining existing business processes.

So what does it mean for enterprises?

As enterprises return to expansion, they will prioritizerevenue growth over cost cutting by focusing on maintaining

competitive advantage, retaining and growing customers,attracting and retaining talent, and improving efficiency tointrinsically reduce costs.

To accomplish these goals, businesses are seeking ways tooptimize their infrastructure by trying to avoid two extremes:wasted capacity, which results in excess spend; andinsufficient capacity, which directly impacts their ability torespond to market demands.

The CIO Paradox: Do More With Less

The challenge of making crossroad decisions falls into thepurview of the CIO.

The key to achieving business objectives is businessefficiency - Efficient operations, efficient financialmanagement and efficient IT. And successful chiefinformation officers (CIOs) know they must focus on ITefficiency to enable rapid response to changing businessrequirements.

Infrastructure Outsourcing and Your Business

How do you reach that goal?

With approaches like IT virtualization, consolidation and IToutsourcing, which help CIOs achieve IT efficiency. ITefficiency can help CIOs improve their resource utilizationand reduce costs while streamlining their IT operations.

It is here that CIOs are constantly faced with challengingdecisions, as to whether to:

� Upgrade existing computing infrastructure with morepowerful servers and software or lease infrastructurefrom hosting providers?

� Build a new datacenter, lease space in one or more co-location centers or move to the cloud?

� Opt for Self-Managed or Service Provider Managed?And so on

Now, the organizational point of view. These challengescompliment those faced by organizations in order to runsmooth operations and lead the business on the path ofgrowth.

Some of the challenges facing Indian as well as globalorganizations today can be categorized into the following:

� The challenge of ensuringhigh quality servicestandards while constantlykeeping costs in check byproviding scalable, secureand highly availablecomputing infrastructure

� Business growth demandsever changing and everexpanding IT infrastructure.CIOs constantly facechallenge of complexity innetwork and systems andtechnology obsolescence

� Challenge of ensuringsmooth running of mission-critical applications bymanaging bandwidths andtraffic loads

� Ensuring IT is always on top of business needs such asexpanding geographical reach as well as faster time tomarket

� Ensuring that the business responds to changing marketdemand by making work environments agile and flexible

� Challenge of managing multiple stakeholders fromvendors to suppliers and ensuring highest degree ofservice delivery

� And last but not the least universal challenge of hiringand retaining skilled IT staff

Outsourcing IT Infrastructure

How does the CIO address these challenges effectively?

IT Outsourcing can be a very effective alternative to usinginternal information technology and resources, but a fullunderstanding of the objectives and options are required tomake that decision. The key to a successful outsourcingdecision is the cost-benefit analysis, a mixture of the harddollar costs and the less tangible soft costs, qualitativemeasures of needs, risks, and benefits.

The decision of when, how and what to outsource is also anessential part of the equation. Organizations evaluating theiroptions for moving complex applications or functions,selective pieces of their IT environment, or their entire ITinfrastructure to an external service provider - shouldconsider how each option delivers on strategic businessgoals.

Business success depends on ability to aggressively seekand seize opportunities to propel the business forward -Outsourcing can be the means to get there.

According to Forrester's report on strategic outsourcing thefollowing are the pressing needs for any business toconsider the change:

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� Need for rapid, strategic change � Fast-path to such change by enabling them to tap into

new business-enabling technologies � Expand their internal skills, and acquire and deliver new

services quickly Dynamic enterprises are moving decisively to connect withcompanies that can help them achieve what they cannotachieve alone. By shifting some of the IT burden andassimilating new skill sets and services from externalpartners - in everything from datacenter operations toapplication development to desktop management - CIOsand other IT leaders are meeting their companies' mostpressing needs while laying the groundwork for futuregrowth.

The First Steps

But how does one start with outsourcing? What are thesteps that one takes in ensuring that the decision ofoutsourcing does not go sour?

After you have considered to evaluate outsourcing as astrategic path to business growth, there are some specificsteps that can help in taking you through process easier andbeing well-informed as you take this important step.

The first steps towards a positive outsourcing decision areto set those organizational goals and determine the desiredsuccess criteria for the outsourcing decision:

� A sound understanding of the needs and limitations ofthe organization

� Identifying and prioritizing the goals of the sourcingengagement

� Developing appropriate measures for internal andexternal operations

� Conducting a cost-benefit analysisof the internal and external options

Outsourcing Goal Setting

That's not all…. It is key to set clearlydefined goals that are strategic as wellas tactical.

Every organization has a different set ofrequirements and expectations whenoutsourcing all or parts of their IT/ISinfrastructure and functions. SomeCIOs take a tactical approach forinfrastructure outsourcing to achievemore effective global operations orspeed time to market. Others decide ona complete Infrastructure Outsourcing(ITO) option as an opportunity totransform and re-engineer their

technology and processes for greater effectiveness andagility.

It is important to create a matrix of what the goal setting isfor your organizations that answers the specific challengesthat you have. The move and change of the tactical tostrategic is detailed in the diagram that you see on thescreen.

Outsourcing IT Infrastructure - Key Drivers

In the last module of this series, you heard about tactical vsstrategic goal setting of a good outsourcing strategy.Alongside the matrix, it is also important to understand thekey drivers leading to outsourcing your IT infrastructure.Some of the drivers that are key and generic are:

Driving High Performance

Business agility is not an option, but a necessity in today'sglobal markets - driving higher performance from ITinvestments is a key for businesses today.

Flexibility to Focus

Outsourcing providers can manage the day-to-day IT tasks,and "free up" corporate IT professionals who need to focuson higher value responsibilities. The ultimate benefit formany CIOs is the ability to focus their own internal ITresources on key strategic initiatives that positively impactthe future of the business.

Agility to Compete

Companies often need "speed to market" and the ability to

Infrastructure Outsourcing and Your Business

Infrastructure Outsourcing and Your Business

respond quickly to opportunities. Outsourcing providersoffer fast provisioning and IT support and agility toimplement or upgrade applications quickly and securely, orto launch a product, especially when a separation is requiredbetween internal and external IT functions.

Scale Cost and Capabilities

The peaks and valleys of business activity can add someuncertainty and inconsistency to operations. Outsourcingproviders can reduce risk by offering scalable resources andreliable performance for business continuity.

Adapt and Protect

Businesses adapting to the changing global businessenvironment often have need for time-sensitive ITseparation, integration, consolidation and transformation. Areliable outsourcing provider will know how to handle the ITchallenges during mergers, acquisitions, and divestitures tomaximize value and minimize risk.

Future Proof

Outsourcing helps in future-proofing your infrastructure bytransforming your IT for instant delivery. By letting you focuson your core business area, outsourcing your ITinfrastructure helps in creating new business and marketopportunities.

Accountability

A business can leverage provider Service Level Agreements(SLA) to ensure that IT infrastructure andapplication availability, performance, andsupport sync with business objectives.

Improved reliability

Availability is everything. Business usersdepend upon their applications, and theenterprise depends on round-the-clockoperational integrity of all infrastructurecomponents: servers, network, andsecurity. Outsourcing IT Infrastructurewith a trusted provider can guarantee ashigh as "five 9s" availability (99.999%uptime), with robust redundancy and fail-safe disaster recovery capabilities thatminimize mean time to recovery (MTTR),as well.

Outsourcing IT InfrastructureVs. In-House

So what are the challenges of insourcingvis-à-vis outsourcing?

The benefits of IT application and infrastructure outsourcingcan be significant. Financial and human resource limitations,the growing complexity of technology, and cost and risk ofdeploying new technology can present challenges to anorganization's internal IT operations. By outsourcingselective pieces of the IT environment, CIO's can leverage aservice providers expertise, economies of scale, highperformance, and enhanced IT service delivery to addresssome of their most pressing issues - and remove barriers toinnovation and value creation.It is important to understandthe inherent benefits of outsourcing versus in-house veryclearly before you step into the game.

Key among the benefits or differences is the cost and humanresource aspect. While numerous out-of-pocket expensesand unpredictable cost of management and upgrades are aninherent in-house peril, it can be mitigated by outsourcing ITinfrastructure. In an outsourcing deal, costs are predictable,easy to budget and one derives cost savings fromeconomies of scale.

Global challenge of hiring and retaining IT staff is a keychallenge faced by CIOs and again in an outsourcedenvironment this can be mitigated to a large extend. Bylowering cost of management and operations of HR hiringand retention, companies will have access to experts withhigh technology know-how.

Another inherent benefit is mitigating huge capex that oneinvests into buying of hardware wherein an outsourcingenvironment helps save this capex to invest into newprojects and innovation thus triggering business growth.

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Transformative Tool for Business

That understood, what is the key benefit that makes itbusiness friendly?

Outsourcing truly becomes a transformative tool forbusinesses. This table shows key business challenge andhow outsourcing solutions can deliver best benefits for theorganization.

For example, if you are facing poor application performancedue to choked network or insufficient network capacity,network application optimization solution from a trustedoutsourcing partner will help deliver return on investmentwithin one month and over 10-fold increase in linkcapacities.

Consolidation, virtualization and green datacenter solutionsfrom your outsourcing partner can help you transition togreener IT environment with over 25% reduction in energyconsumption and CO2 emissions.

The Strategic Partner

So it becomes important that the vendor you choose tooutsource your IT infrastructure is a strategic partner to yourbusiness.

Control over their IT assets seems to be a major worry

among CIOs who are contemplating outsourcing. The keyhere is to choose a partner who has necessary skills andtrack record of helping organizations grow.

In any outsourcing contract it is crucial that the serviceprovider and the customer should have the same set ofexpectations from the outsourcing contract. It is importantto ensure that the outsourcing partner is reliable andtrustworthy. Choose a partner that respects the need fortransparency, and who take the time to understand your ITneeds.

So that it will enable them to reduce costs of getting theirproducts to market and assist with market feedback toenable successful creation, launch, and sustenanceactivities for their products

Netmagic's infrastructure outsourcing services/solutionshelp the organization to achieve all this. Netmagic is astrategic and reliable partner that brings expertise,automation and flexible pricing strategies to drive downcosts. The company provides flexible, adaptive technologyand multiple sourcing options to help you respond tochanging business demands. It enables compliance,security and business continuity to reduce risk. And whenthe organization needs to move quickly on new initiatives,Netmagic backs it up with their team of experts andtechnology partners.

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Infrastructure Outsourcing and Your Business

marketing@netmagicsolutions.com www.netmagicsolutions.com1800 103 3130

About Netmagic Solutions (An NTT Communications Company)

Netmagic, an NTT Communications company, is India’s leading Managed Hosting and Cloud Service Provider, with 8 carrier-neutral, state-of-the-art datacenters across the country. Established in 1998, Netmagic has been a pioneer in the Indian IT Infrastructure services space as it was the first to launch services such as cloud computing, managed security, Disaster Recovery-as-a-Service and software-defined storage. An IT Infrastructure Partner to more than 1400 enterprises globally, Netmagic, also delivers Remote Infrastructure Management services to NTT Communications’ customers across Americas, Europe and Asia-Pacific region. Netmagic is the recipient of several industry accolades and was recently chosen by India’s CIO community as the best service provider of Datacenter Managed Services and Cloud services, at the CIO Choice 2015 Awards.NTT Communications has subsidiaries and offices in 43 countries / regions, with over 21,600 employees worldwide. It had total operating revenues of 1230bilion JPY for year ending March 31, 2014 and has infrastructure worldwide, including leading global tier-1 IP network, the Arcstar Universal One™ VPN network reaching 196 countries/regions, and 130 secure datacenters.

NTT Communications is a part of NTT Corporation, Japan – one of world’s largest telecommunications companies and ranked 53 on Fortune Global 500 list (2014).

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About NTT Communications Corporation

NTT Communications provides consultancy, architecture, security and cloud services to optimize the information and communications technology (ICT) environments of enterprises. These offerings are backed by the company’s worldwide infrastructure, including leading global tier-1 IP network, Arcstar Universal One™ VPN network reaching 196 countries/regions, and over 150 secure data centers. NTT Communications’ solutions leverage the global resources of NTT Group companies including Dimension Data, NTT DOCOMO and NTT DATA