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So what’s with the increased interest in automation lately?  No doubt you’ve noticed there have been more than a few blogs already written on this site and others espousing the importance and value of automation.  (“Meet the Newest Member of Your Data Center Operations Team,” Tere’ Bracco, November 8, 2010 and “Mad Scientist Alert,” Christopher Kennessey, October 27, 2010) What trends lie behind this demand?  Three come to mind:

1)     Disappearing cost-benefit of offshoring

2)     Increasing skills shortage

3)     Growing adoption of virtualization/cloud technologies

And each of these deserves a bit more exploration. Today, I will focus on offshoring and leave the other two for future blogs.

Moving IT operations to low-cost parts of the world has been a very lucrative exercise for the past two decades.  However, the financial benefits that were obvious 10 years ago are mostly gone thanks to increasing salaries in India, China, and other emerging countries combined with rising hassle costs (compliance, regulations, security, communications, language, and management) associated with off-shoring.  Here is a quote from Sramana Mitra who wrote a very well publicized and much debated article in 2008 titled “The death of Indian outsourcing” (http://www.sramanamitra.com/2008/01/22/death-of-indian-outsourcing/).  She writes “Rising wages in the most popular offshore centers (especially Bangalore), are eroding the cost advantage that drove this business to India in the first place. When the practice began, there was a 1:10 cost advantage. Today, this has dropped to 1:3. Over the next 5 years, perhaps, it won’t make sense to send work to India anymore.”  Further complicating the offshoring play is the 20-40% attrition rates seen in many of these low-cost countries.

So is Intelligent Automation the answer?  Automation will eliminate many of the labor-intensive, back-office functions now being performed in India and other lower-cost countries.  Don’t you want your IT talent to focus on complex new things, new innovations? Growing businesses focus on automation as a way to free their highly knowledgeable workers to focus on value-added activities.  Mature businesses focus on automation as a way to reduce headcount or reduce the skills required to perform a specific function.  While many companies have migrated to near-shoring or smartshoring, intelligent automation offers the potential for a more dramatic and long-term impact on reducing costs associated with many labor-intensive IT processes now being performed offshore.

So you may ask, what exactly is Intelligent Automation?  Well, Cisco Intelligent Automation embeds domain knowledge, analytics, and best practices into the network that connects every aspect of your business.  Why Cisco?  Think about it. The network is the ideal platform for automating IT operations, not only because the network touches and connects every part of your business, but also because it can capture events and information close to the source, enabling rapid, precise response to events and changes. This network-centric approach to intelligent automation takes advantage of the network’s ability to sense and control data center and IT operations.

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2 Comments.


  1. Tere,

    I blogged about a similar topic 2 weeks ago (see http://dcrev.blogspot.com/2010/11/2011-rise-of-automation-tools.html).

    From my perspective there are three key drivers which are contributing to the resurgence in popularity of data centre automation tools.

    1) Cost reduction. There is intense focus in most organisations to deliver significant cost savings and IT is getting hit hard – this is a consequence of the current economic climate. IT needs to do more with less. Automation enables the IT organisation to reduce/avoid operational cost (mainly through reduction in headcount or offshoring of roles).

    2) Increased control. Compliance requirements are hitting organisations hard so increased controls are required. This is increasingly important for organisations that use an offshore model to deliver/support IT services. Automation enables organisations to use their highly skilled onshore resource to define standards and policies which offshore (or onshore) resource can only execute against (they cannot modify). The Audit and compliance capabilities of automation solutions enable organisations to become more proactive in their approach to enforcing these standards and policies as well as proactively identifying and remediating against any-non compliance.

    3)The move to Cloud. There is a significant amount of hype around cloud and the major toolset vendors have noticed and started positioning automation tools as part of a wider service operations and management framework. I am seeing a significant amount of interest from clients that are looking to radically change their approach to delivering and managing their infrastructure. Messaging from the vendors around the management of cloud is certainly a driver behind this as well as pressure from the business on IT to become more agile and move from a cost centre to a value centre.

    However, as I keep telling my clients the toolsets on their own are not the “silver bullet”. Significant investment is required in process improvement and organisational change to maximise the return on investment from data centre automation solutions.

    Regards,

    Jon.

       0 likes

  2. Thanks Jon, for the valuable insight. Toolsets are just that: toolsets. It’s the expertise, planning, and thought that goes into using them that turns them into valuable assets.

       0 likes

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