Shared and Dedicated Delivery Models

All traditional IT infrastructure service providers (like IBM ,EDS etc.) have over the years built competency and infrastructure to deliver IT Infrastructure Services through a shared delivery model. Most of the "commoditized" activities like monitoring and service desk (rather helpdesk as in case of many) are shared across multiple customers with the delivery team. This helps them lower costs, build their own processes to deliver services, very importantly have their own set of tools to monitor and troubleticket ( and so reduce cost and have a focused tools strategy across engagements).

Most offshore based (India based really in that sense) IT services companies jumped to the Remote Infrastructure Management (RIM) bandwagon more recently. In the last 3-4 years since their focus they have tried to get into mid-sized and now trying to even get large deals to bid. However their delivery model (for most of them) is a dedicated delivery model where each engagement has a dedicated team, a dedicated tools deployment and runs on processes varying for each customer. This is a big difference from what the traditional players do but is often missed out by clients and not effectively highlighted by these companies.

The India based IT Infrastructure Services or RIM service providers do not have a shared delivery strategy because:

• Most still have an application development and maintenance hangover which really is still their bread and butter. Those engagements have for most parts for most of them being Time & Material (T&M) contracts where the services were delivered and paid on the basis of number of consultants assigned to a contract. Essentially it is a "body shopping" work that most have been doing and so that hangover has continued to now where these large deals are Fixed Price managed services contracts.
• With the exception of couple, none has yet the long term investment horizon to invest in a shared delivery model in advance so that those can be proposed for new engagements. Those that have realized are waiting for a critical mass of engagements before making that investment but that does not happen fast unless they win large deals with a shared delivery model's cost effectiveness and process maturity. Classic chicken and egg!
• Some do not have the maturity and experience to set up one. This applies to some, where the intent is there, need understood but the efforts have not been focused and time-bound.
• The Indian offshore based players have still won many mid-sized and some large deals despite not having a shared delivery model. This has been primarily because of existing relationships on the application side which offered synergy and because they were still cheaper in a dedicated model from offshore than onsite based shared services model of most traditional IT outsourcing service providers. So their present success is jeopardizing their future success.

This move to a shared services model is inevitable. The traditional players realized that few years back and are mature on that front. The sooner the Indian based IT infrastructure service providers realize it, the earlier it would take them to those coveted tables where $1B+ deals are done.