Successful Offshoring: The Devil Is in the Infrastructure Details

Ask a telecom manager, "How is your offshoring provider's network infrastructure configured?" and all too often the answer is, "Oh, our provider handles that, so I don't worry about it."

What these managers don't know or don't understand is that assumptions we make in the U.S. about communications infrastructure aren't necessarily valid in an offshoring environment.

For example, location matters a great deal. There are technology islands in developing countries, so you have to assess telecommunications connectivity not just at the country level, but down to the city block. Plus, some offshore providers locate their centers in undesirable and disaster-prone locations. (One provider positioned a call center in Baguio, Philippines, which the World Bank cites as one of the top disaster-prone cities in Asia.)

Reliability is another key issue, because single points of failure can exist in places such as central offices, cable landing stations and communications equipment. To hold down cost, some developing nations' telecommunications companies install second- and even third-generation communication equipment. Fiber segments are often not buried; they run aerially on poles. And reliability can suffer from central-office fires, submarine cable cuts and gas explosions that destroy the fiber. For instance, in February 2004, the Sea-Me-We3 cable to India had an availability of just 32%.

So what's a corporate telecom manager to do?

1. Require your offshore contractor to provide detailed information about its communications infrastructure -- from its U.S. point of presence to its offshore facility. For example, this dossier should include the offshore country's rank on the International Telecommunications Union's Global Digital Access Index. (Out of 178 countries, India ranks No. 119 and the Philippines No. 90.) The dossier should also identify the U.S.-based local exchange carrier and central office; the U.S. international provider (AT&T, Sprint, MCI); and what submarine cables are being used.

Then find out which countries these cables run through. (Some enterprises are stipulating that cable infrastructure can't be used if it passes through certain high-risk countries.) Ask whether the service provider has both trans-Atlantic and trans-Pacific paths. In addition, determine the distance between the offshoring central office and the offshoring IT facility and, lastly, the method of connectivity (copper or fiber, buried or aerial).

It's also helpful to collect the following information:

  • Number of customers on the shared infrastructure
  • LAN and WAN equipment used, including revision levels
  • Equipment upgrade plan
  • Total bandwidth capacity
  • Current bandwidth utilization
  • Plan and time frame for bandwidth upgrades
  • Frequency of power grid outages
  • Backup power system and processes
  • Service-level agreements (SLA) with the infrastructure supplier

2. Understand the offshoring provider's business continuity and disaster recovery plan. Specifically, is an alternate fiber path or satellite used for backup? When was the last time the plan was tested?

3. Discuss in detail the provider's information security plans, in particular patch management and procedures for firewall rule changes.

4. Conduct on-site assessments of the offshore central office serving the offshoring provider (this is a common occurrence in the U.S., so why not do it overseas?), as well as the provider's network operations center. Also, meet with the U.S. in-country manager (if one exists) for the international telecom carrier to gain his perspective on the telecom situation in that country.

5. Insist that your contract with the offshoring provider includes infrastructure SLAs and metrics. At a minimum, these metrics should include network availability, network utilization, latency and dropped data.

Unfortunately, the typical response you'll get when you ask for this detailed understanding of the provider's network infrastructure and capabilities is something like, "None of our clients has asked for this data before," or "That information is proprietary." But more companies should be asking these questions, and none of the information is proprietary. In fact, much of it, including submarine cable landing station information, is readily available on the Internet.

Yes, the devil is in the infrastructure details, and he lurks everywhere your data traverses. At the end of the day, you can't make offshoring totally risk-free. But if you're meticulous about understanding your offshore provider's network, then when (not if) a failure occurs and your management asks what happened and where and what is being done about it, you'll be able to respond from a position of knowledge. And that knowledge may save you from some extended time in corporate purgatory.

Scott Warren is a consulting principal in the Irving, Texas, office of International Network Services Inc., where he specializes in offshoring. He lived in Asia for three years, worked in 24 countries and has deployed IT to more than 200 countries.

Copyright © 2004 IDG Communications, Inc.

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