The flattening continues… Is the paradigm shifting? — Vacation Reading – Part 3

So on my last night of my “official” vacation I thought I would conclude the series with a post that refers back to my inaugural post from July 5th as well as pose some questions about what it could mean from a broader perspective. I just finished an article in the September 18th issue of BusinessWeek outlining how DuPount outsourced legal services to OfficeTiger a Business Process Outsourcer (BPO) recently acquired by R.R. Donnely & Sons Co.

According to the article DuPont aims to save 40% to 60% on document related work and cut $6 million from is $200 million dollar legal budget. Of course there is some associated risk but on the outskirts of Manila DuPont now has 30 Filipino attorneys, including three who have passed the U.S. bar exam. The attorneys sit elbow-to-elbow with 50 staff employees, working three shifts seven days a week they read, analyze, and annotate digital images of memos, payroll and medical records, old engineering specifications, and other documents that might be used as evidence in DuPont legal cases.

As a technologist working in the storage sector I spend a significant amount of time talking with customers about compliance and the need to facilitate e-discovery. We leverage software technologies like enterprise content management applications, Email archiving applications and full-text indexing to facilitate this. As software and hardware vendors we have a major hurdle to overcome, we have a fundamental inability to create meaningful metadata. Is it possible to automate the creation of meaningful metadata that eclipses the simple taxonomy we are capable of today? Does a BPOs ability to read, analyze, annotate, index and retrieve eliminate or decrease the need for such software products? With Asia also being a software development hotbed how long will it be before a BPO like OfficeTiger teams up with or organically grows a software development business to automate their processes hence lowering consumer cost? Where does this leave the software only vendor? Will they be at a disadvantage, with only the ability to offer a component of the total solution.

The obvious goal of outsoucing/offshoring is to cut cost but DuPont also hopes to reduce the evidence collection and processing time from 18 months to 3 months. This will be enabled by leveraging a global legal team operating 24/7. Office tiger will convert millions of archived paper records to digital format, code and index them; dramatically reducing the effort required to analyze the evidently data. It is not hard to see the cost benefits when the average salary for an attorney with five years experience in the Philippines, who has a very similar legal system to the U.S. is ~$30,000 including benefits. To put this in perspective that is about half what a veteran U.S. corporate paralegal earns and one-fifth what a first-year attorney can earn in in New York.

OfficeTiger believes that corporations are looking at more cost effective ways to buy legal services so cost does not become a variable when deciding to whether or not to defend a case. The need for alternative legal service could push OfficeTiger to ~1000 employees and hundreds of lawyers by the end of 2007. It looks to me like the paradigm is shifting in many of the markets where software vendors have focused, globalization will continue to morph the marketplace and the nimble will be best positioned to take advantage of the changes.

Read the full BusinessWeek article here .


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Netscape? Who?

Microsoft has opened up the Netscape playbook! Virtual PC 2004 is now free and can be downloaded from here. If history teaches us anything the desktop attack is the first move in a campaign focused on world domination. It was the goal in the with the Internet Explorer campaign that Microsoft ran against Netscape, why should we believe this will be any different? I remember back in the day running Netscape on the desktop and server (Netscape Communications Server). First the switch came on the desktop (after all it did save corporations a ton of money), next the server switched to either Microsoft IIS or Apache. Will the world once again end up with two alternatives Open Source (XenSource) and Microsoft?

Should be interesting to watch!


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The Code (Linux)

Just arrived at my hotel in Boston an I am preparing to deliver “The Evolution of? Disaster Recovery” seminar in our sixth city tomorrow morning.? I put my new video iPod (that Cisco so graciously awarded me after passing a certification exam) to good use on the way up from Newark.? I watched the “The Code (Linux)” a Swedish Linux documentary.? As a long time Linux hacker and a technology history buff I was already familiar with most of the content that was presented in the film but there were a couple of concepts that got me excited, so excited I needed to blog on them.? The first was a statement by Linus Torvalds, for those of you who don’t know who Linus is, he is generally recognized creator of the Linux kernel.? Linus has arguably directed one of the most complex collaborative software development initiatives in the history of computing.? We can learn a lot from him and the Linux development effort on how to motivate and extract the most from people.? Linus discusses how the management of Linux kernel development project morphed from a hierarchical management structure to a what he describes today as a “web of trust” where developers are empowered to act.? Eric Raymond the author of “The Cathedral and the Bazaar” and all around open source czar also has some phenomenal words of wisdom.? Eric talks about what motivates open source engineers outside of monetary gain.

  • Artistic pride, the satisfaction derived from good craftsman like work
  • An idealistic feeling that you are part of something larger than yourself
  • A general desire to help and deliver good solutions
  • Increasing ones reputation and statue within the community

I found these points to be interesting because I have always embraced the philosophy of empowerment and mentoring over dictating policy and managing to that policy.? In my opinion the difference between a good organization and an insanely great organization is the ability to apply concepts such as the ones discussed above, so everyone participates in a culture where free thinking, innovation, empowerment, reputation, recognition, and responsibility are allowed to flourish.? The concept of totalitarian rule is ignorant and stifles innovation.? Empowerment is the key to innovation and ultimately greatness!


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Just when we though we had the model nailed…

I just finished reading an article about how Tata Consultancy Services (TCS) is investing 12.6 million in the Chinese market.? It appears the Maharashtra (literal translation: "Great Nation"), India based consulting firm is leveraging the even lower cost of labor in China.? With tech salaries rising at 15% a year in India the consulting company is looking to cash in on the low wage labor in China.? This should not be hard to do with monthly salaries for programmers in high-tech hot spots like Beijing, Shanghai and Shenzhen between $600 and $960.? TCS already has a secured the first China based contract with Microsoft for $2 million.? Is this the beginning of a trend where the proven low cost outsourcer is looking to move up the food chain and play middle man while developing technical expertise in low wage markets?


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The need for a new paradigm…

Almost a year ago I started the process with a group of my peers focused on identifying the infrastructure challenges that organizations are facing today. This process morphed itself over time into a detailed thesis on how we got here and the actions required to close the “Infrastructure Chasm”.

We started the process by identifying how we got to where we are today. The evolution of the modern infrastructure was broken down into six distinct eras:

  • ERA 1
    • Monolithic Computing
    • Single Vendor Infrastructure
      • i.e. – IBM UNIVAC I
  • ERA 2
    • Distributed Computing
    • Single Vendor Infrastructure
      • i.e. – DEC PDP-8
  • ERA 3
    • Dawn of the Multi-Vendor Infrastructure
    • Micro computers begin to arrive
      • i.e. – Commodore, Apple, Atari, Tandy, IBM, etc…
  • ERA 4
    • Technology specialization
    • Focused companies build more specialized devices and software
      • Gives way to companies like Cisco, SUN, Microsoft, Oracle
    • Technology interoperability and integration become paramount
  • ERA 5
    • Technology Sprawl
    • Infrastructure Segmentation
      • Complexity and required skill sets forces organizations to segment infrastructure and management
        • i.e. – Server, Storage and Network
  • ERA 6
    • Convergence
      • The whole is grater than the sum the parts
      • The ability to leverage knowledge capital across disciplines
      • Increased ROA (Return on Asset)
      • Holist Strategy

During this exercise we realized that while the potential technology capabilities have increased exponentially it has become more difficult to extract the maximum potential. Many technologies exceed market requirements and complexity forces the need for segmentation making it nearly impossible to develop a holistic strategy. While we continue to increase technology potential our ability to realize the value is diminishing.

This gap between the relative realized potential and potential technology value is what I refer to as the “Infrastructure Chasm”.

The term infrastructure is defined as the set of interconnected structural elements that provide the framework for supporting the entire structure. I propose that information technology infrastructure is more appropriately defined as an umbrella term commonly used to define segmented, heterogeneous, disparate technology components.

Our need to solve tactical information technology infrastructure issues causes us to further propagate a lack of organizational strategic relevance. In order to begin to address this in todays’ mature information technology infrastructure organizations must begin to add strategic relevance to their information technology infrastructure, remove management segmentation and drive convergence.

To begin this process each element of the information technology infrastructure must be dissected and optimized to the fullest extent possible. Once element level optimization is complete we can begin to map the discrete information technology elements into a true converged infrastructure. Once the the convergence process is complete optimization must once again be performed on the infrastructure as a single entity.

At this point you we have forged the “Ultra-Structure”, a paradigm where segmentation and tactical behavior cease to exist, all behavior within the “Ultra-Structure” has strategic relevance and elicits positive business impact.

The “Ultra-Structure” is best defined as a paradigm that shifts conventional technology thinking from reactive point solutions to a holistic strategic foundation.

Why is a paradigm shift so critical? For years organization have been implementing and maintaining tactical infrastructure solutions. The “Ultra-Structure” paradigm provides a model to optimize, architect, design, implement and maintain superior solutions by applying strategic relevance to tactical infrastructure.

The “Ultra-Structure” cannot be compartmentalized or segmented, the intrinsic “Ultra-Structure” value is far greater than the sum of its discrete elements.

I am very interested in your thoughts.


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