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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