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.

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Tags: application performance, automation, business operations, cost control, data center, intelligent automation, IT, job scheduling, outsourcing, productivity, workflow

So it’s more or less official: the recession ended in June 2009. Anyone watching IT departments this year could have told you that. When the economy ramps up, there’s a shift in focus from cost savings and maintenance (back when I was an IT manager, we called it “bunker mode”) to innovation that moves the business forward. And in 2010 we’ve certainly observed that. IT departments are concentrating not only on streamlining operations and lowering costs—an absolute mandate of the recession—but also on innovation that leads to better business operations, greater productivity, and increased revenues—a clarion call of recovery.  Now, this innovation can be in business practice or improved technology—and most likely both—but it almost always begins with IT. Streamlining IT functions, managing assets carefully, and ensuring uninterrupted operations can lower costs, increase reliability, and free resources for research, development, and innovation.

 So it’s back to business as usual running IT departments and data centers in an expanding recovery, right? Wrong.

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Tags: application performance, automation, business operations, cost control, data center, intelligent automation, IT, job scheduling, outsourcing, productivity, workflow