Fighting downturn with RIMS

From business process outsourcing (BPO) to remote infrastructure management services (RIMS), the demand for offshore IT services is increasing and offering great business opportunities for Indian IT companies even in this downturn.

Patni's vice president for solutions - Infrastructure Management Services (IMS), Vikram Watave talks to Pankaj Maru of CyberMedia News to give his insight about slowdown's impact on RIM services business and growth opportunities, the cost-cutting trend across industries and benefits of RIM. Excerpts:

The current sluggish business scenario has impacted IT spends leading to the trend of cost-cutting. Will this situation have any impact on remote infrastructure management services business?

Remote Infrastructure Management (RIM) as a concept has been widely discussed in the recent past. According to various studies, the total market for remote infrastructure management services is anywhere between $80 billion to $120 billion. According to NASSCOM’s 2008 Strategic Review after Application Development and Maintenance (ADM) and BPO, Remote Infrastructure Management (RIM) will be next big offshore opportunity for India.

The report also states that India is strongly positioned to capture $13-$15 billion of global opportunity in RIMS by 2013, leading to the creation of 3.25 lakh to 3.75 lakh jobs. In early 2008 RIM services revenue for India stood at $3.2-3.6 billion.

However, a lot has changed over 2008 and global economies are clearly experiencing the effects of the slowdown thus leading to a serious re-consideration and re-engineering of IT investments. IT budgets have been among the first to witness the impact of budget cuts. This has actually opened up further opportunities for Indian players.

More and more global organizations are seriously considering the possibility of opting for remote delivery of infrastructure management services to reduce cost, improve bottom-line figures and gain from the process maturity that offshore service providers offer. Keeping this in mind, the opportunity for RIM has most likely widened with more customers looking to align IT investments closely with business goals and reduce costs.

Do you think cost-cutting trends will give a fillip to sourcing of remote infrastructure management services by large enterprises and organizations?

Yes, amongst many options available to CIOs for cutting operational costs, RIMS is the only option that does not require “Spend more to save more” strategy. CIOs can see direct benefit on balance sheet within a quarter and not wait for three year ROI (return on investment).

Global enterprises leverage remote infrastructure management services like server maintenance, network services, help desk support, and data center operations among others to enhance overall service quality, increase organizational productivity, and reduce operational costs while simultaneously mitigating business risks.

The ongoing economic meltdown has compounded the pressure on CIOs to increase the value of IT to the business by optimizing existing investments. RIMS extends a solution to this challenge. At a time when CIOs are under increasing pressure to improve margins, it offers access to highly experienced, cost-effective resources.

In addition to reduction in infrastructure costs, offshore vendors offer increased efficiency and reduced downtime through its process maturity, and proven delivery capabilities. So the ongoing cost-cutting trend has actually spurred many global enterprises to proactively consider RIM services from offshore locations like India.

What are the key benefits of remote infrastructure management services for large enterprises and businesses?

Enterprises opt for RIMS to leverage a reliable and scalable infrastructure without compromising on quality, security and cost, gain higher operational and financial efficiencies, and free in-house resources to focus on its core competencies.

RIMS help companies rationalize operational spend, minimize risks, and reduce asset/liability mismatches and adapt to the current lean business conditions. Also, enterprises can reduce infrastructure management spend by 20-30 per cent in the first years and continuously improve service quality and cost benefits year-on-year.

In addition to this, enterprises can benefit from access to a highly available, scalable, and flexible IT infrastructure, and increased data center efficiency via delivery of services in accordance with ITIL v3.0 making RIMS a compelling value proposition.

Some of the key benefits include infrastructure availability with 24x7 proactive monitoring, increased flexibility in operations, reduced operational and maintenance costs, improved asset utilization, SLA-based service management and better ROI on IT investments.