Proj410 Bpo Cloud Computing Case Study

Topics: Data management, Outsourcing, Data Pages: 7 (1950 words) Published: June 9, 2013

BPO and Cloud Computing Case Study 1
PROJ 410 Contracts and Procurement

Purpose
Smith’s Information Services is in the process of implementing a corporate overhead reduction program. This is due in part to the increasing costs of operating and maintaining an in-house data center, as well as flattened sales and reduced profits. For these reasons Smith’s Information Services is looking to outsource the company’s data center to an outside vendor. The increasing overhead costs include personnel costs to operate and maintain the data center’s servers, data center cooling costs, and electrical utility costs required to run the data center. Reducing these overhead costs, by outsourcing the data center, will help Smith’s Information Services to maximize profits in the face of increased growth potential for the organization. Current Situation

Currently Smith’s Information Systems operates and maintains an on-site data center for the collection and sales of consumer information. The data center must be operated and maintained 24/7 to stay relevant and competitive. As the company has grown since its inception, the data center has also grown forcing the company to hire more staff members to run the data center. These increased personnel costs, along with increased utilities costs, are beginning to cause the company’s overhead to skyrocket out of control. Outsourcing/In-house

In-house services are becoming too expensive to maintain, so they are not being considered for retention in this cost analysis. There are three services being considered for outsourcing; a local data center, a well-known data center, and an overseas data center. Consideration of which option to pursue must include the following issues: * Data security (#1 concern)

* Service Level Agreements
* Human Resources Issues for both Local and Remote Staff Members * Notice to customers of the decision to outsource the data center Cloud computing utilizes clusters of services that are not dependent on the physical location to provide processing and/or storage of electronic data. Moving the operation of the data center to an outsourced vendor can provide considerable overhead cost savings to the company. Outsourcing of the data center and data processing activities to third-party organizations can improve efficiency, reduce personnel costs and improve services to the company all while maintaining superior client services. In order to meet the company’s needs, the outsourced data center must be able to provide the following services (this list is not all-inclusive). * High level data encryption and security

* 24/7 access
* Daily data back-up routines
* Secure access to the data through VPN or other measures * High rates of data transfer
* Contingency response plans for natural and man-made disasters * Scalable to meet increased “high peak” demand and increased company growth Each of the proposed types of outsourced data centers has pros and cons associated with it. They include but are not limited to: TYPE| PROS| CONS|

Local Data Center(s)| * Close interaction and collaboration with vendor * Response Times * Same time-zone * Easy workforce moves (if required) * Potential transfer of current employees to vendor * Cost * Technology| * Size of data center and ability to store all of our data in one location * Collaboration between data centers if multiple vendors are required * “Local” refers to same geographical location (i.e. continent): may be very distant * Cost * Non-dedicated servers| Well-known Data Center| * Reputation * Size * Cost * Security * Multiple Storage Sites * Response Times * Dedicated Servers * Transparent business operations * Technology| * Cost * Location (may be overseas)| Overseas Data Center| * Cost| * Location (time zone, infrastructure, etc) * Language barriers * Data Security * Data...


References: Halvey, J. K., & Murphy Melby, B. (2007). Business process outsourcing: Process, strategies, and contracts (2nd ed.). Hoboken, NJ: John Wiley & Sons, Inc.
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