Tag Archives: technology

solar_prop

$467 Million For Geothermal And Solar Energy Projects

Sustainability is an ongoing movement that requires commitment from all — from politicians to regular citizens and everyone in between. In my ongoing quest of educating myself about news and events going on in the world of “green” I came across this release from the U.S. Department of Energy.

During the 2008 presidential campaign President Obama spoke of an amibitious energy plan and the first steps have been made to make the plan a reality.

President Obama announced that “…over $467 million from the American Reinvestment and Recovery Act to expand and accelerate the development, deployment, and use of geothermal and solar energy throughout the United States.”

The fact that this much money has been set aside in the name of creating a sustainable future for the United States is a huge step forward. President Obama went on to say that “We have a choice. We can remain the world’s leading importer of oil, or we can become the world’s leading exporter of clean energy.”

Recognizing that the path we’ve been on must be altered is just the beginning. By investing money to discover alternative energy sources, technology, etc., we have made the first step on this long journey.

The funds are going toward several types of green technology: $350 million is being set aside for geothermal energy, a source of renewable energy that uses heat from the Earth for electricity generation and heating applications.

An additional $117.6 million will go toward solar energy technologies. The goal of the various partnerships and developments is to continue to lead our country to a greener future.

It’s encouraging to know that although we are all facing difficult economic times right now, the government recognizes that making this investment is for the greater good of not only the U.S. but the world.

Source:
U.S. Department of Energy

stream of information

Protect Stream Of Information Coming Into Your Company From Multiple Sources

About 2,500 years ago, the Spartans seemingly perfected cryptography by ingeniously wrapping a thin sheet of papyrus around a staff called a skytale. Today, while our encryption and data security methods have significantly improved, the need for securing data is just as relevant. And with the advent of cloud computing, new methods must be refined and perfected in order to compete in the online world of SaaS, PaaS and IaaS.

In case you’re wondering, the above-mentioned acronyms are not part of tech-geek poetry. They stand for the newest methods by which technology is developed and delivered. SaaS stands for Software as a service; PaaS stands for Platform as a service; and IaaS stands for Information as a service. And while we’re at it, let’s make sure we define another hot term right now, cloud computing. This essentially means that the information that used to reside on your desktop, such as most software applications, now resides on a server owned by the company that developed that software. Hence, Software as a service (SaaS). Developing and licensing software or other technology from a cloud environment is a rather new and preferred method. And if you bring up “the newest cloud application to hit the enterprise market” in your next business meeting, you’ll sound very smart.

The common mantra thus far has been “use the cloud only if security is not an issue.” However, if we are truly going to utilize the power of the cloud, the mantra should be “architect your cloud solution around a sound security model.” The cloud offers too many rich opportunities to be relegated into a space where security is an afterthought. But how do you build security into a new and evolving technology like the cloud, thus protecting the flow of your company’s intellectual property?

There are now some tried and true best practices, as well as unique approaches to securing IP data flowing into the cloud. The first is standard SSL (Secure Sockets Layer). For instance, many companies utilize Windows Communication Foundation (WCF) as their preferred method for data encryption. WCF allows the company to implement a robust security layer around all user data flowing into the servers. Through this encryption process, the security layer ensures no one is eavesdropping on sensitive data. In addition, all messages are signed to further ensure data integrity.

Companies should implement security measures that make sense for their unique scenarios. One way to ensure that customer data is secure is through a three-step algorithmic approach. First, all SOA (Service Oriented Architecture) messages are “owned” by the user. For example, if “Jon” uploads data to the servers, that line of communication is unique to Jon and can only be used by Jon. Second, to further ensure data integrity, the unique communication line that belongs to Jon also belongs to Jon’s group, or platform. Therefore, he can access data about his group, but no one else’s. Finally, the user and group binding is not only implemented in the call from the application, but also bound to the databases in the company’s servers. In essence, each user has a “tunnel” to their data that is designed in such a way that no other user can penetrate that tunnel, nor can a user expand out of his or her tunnel. Data is thus very secure.

At first glance, the casual reader may assume a paranoid approach to data security. However, in order to facilitate widespread adoption of the cloud for enterprises, security must be built up front, and continually improved as the software evolves. By employing standard security techniques, coupled with vendor-specific approaches, IP data can be safely secured, allowing enterprises to confidently employ the power of the cloud.

angel statue

New Angel Investment Group Targets Women Entrepreneurs

A new angel investment group called the Catalyst Committee is gearing up to invest in local startup companies that focus on consumer goods such as apparel, high-end furniture and cosmetics. Heading up the new committee is Dee Riddell Harris, president of the Arizona Angels, a group of private investors that has been funding startup, technology-based companies in Arizona for nearly a decade.

“The Arizona Angels have rejected a number of applications from women entrepreneurs over the years because their ideas weren’t technology based or have a patent behind them,” Harris says. “So the point of the Catalyst Committee is to be supportive of entrepreneurs, particularly women, who have good ideas, as well as businesses that are not tech-based.”

Harris started building the framework for the Catalyst Committee about nine months ago. The group met for the first time in November 2008 and now has 35 potential women investors from around the state. During the kickoff meeting, the founders of three local startups talked to the group to provide an idea of the type of companies that could eventually apply for funding. High-end fashion designer Debra Davenport talked about the fashion industry in Phoenix, her couture collection, which she launched in November 2007 during Phoenix Fashion Week, and her hopes of one day raising $1.7 million that would allow her to participate in fashion shows around the world. She also showed a number of garments from her couture collection.

“Being able to participate in key fashion shows in Los Angeles, Miami, New York, Paris, Milan and London is a fashion designer’s primary marketing tool,” Davenport says. “But it’s not cheap. It can run anywhere from $30,000 to $100,000 per show when you figure in pattern making, fabrication, manufacturing and all the specialized notions, materials and threads that have to be brought in from places like Paris and Italy.”

Last year, Davenport was able to show her luxury collection during the Mercedes-Benz Fashion Week in Los Angeles. It’s the second largest and most prestigious fashion week in the United States next to New York Fashion Week. Davenport was also the first and only designer to show from Arizona, according to IMG, the production company that puts on the show. Now, Davenport was invited to show her fall collection during the most recent New York Fashion Week.

“I’m hoping that with the significant achievements we’ve been able to accomplish over the last 15 months, we will catch the eye of some savvy investment people who think this is a winning proposition,” Davenport says.

She is planning to launch her first signature fragrance later this year or in early 2010. She also plans to expand her design offerings to shoes, handbags and china patterns. The 50-year-old fashion designer has already completed designs for china patterns, shoes and luxury handbags that will be manufactured in Italy.

Kathie Zeider, senior vice president of Legacy Bank and a member of the Catalyst Committee, says there are many worthwhile businesses in Arizona like Davenport’s that serve women, or are women owned, and poised for high growth of $5 million to $50 million.

“We’re in a service and tech economy, so for Arizona to grow and prosper we need to nurture both sides of the economy,” Zeider says. “Kudos to Dee Harris for seeing this gap in the Arizona marketplace and developing an initiative to fill this need.”

Committee member Connie Jungbluth also believes early-stage investors are critical to the state’s economic vitality. “It’s important to infuse capital into early-stage companies in our community, especially in this economy,” she says. “Women are also big consumers, so overlooking businesses that serve them is not a good idea.”

The Catalyst Committee is still in search of investors to join the group. Its goal is to have 100 investors and to help one local startup company a month. Investors must meet state and federal accreditation standards. Individual investors need an annual income of $200,000 for the current year and the past two years. Couples require an annual income of $300,000 for the current year and last two years. A net worth of $1 million is also acceptable in lieu of the income standard.

Entrepreneurs can submit their applications and business plans to the Catalyst Committee via the Arizona Angels Web site. Harris says entrepreneurs seeking angel investment need to be well prepared when applying for funding; they need a strong business plan with important information aimed at investors.

“Angels are extremely interested in the management team that gives credibility to the firm, so oftentimes they read the first paragraph of a business plan, then skip straight to the management team because it’s so important,” he says. “They also want to know about the company’s marketing and sales strategy and whether the company has some type of competitive advantage.”

www.arizona-angels.org

Money Crunch

The Credit Crunch Is Leading Many Organizations To Outsource Asset-Intensive Legacy Processes

Market conditions are always a driving force in organizational spending, and the current environment is no exception. But in 2009, in addition to cost reduction, companies are now evaluating whether they can maximize their scarce credit availability by outsourcing capital-intensive IT functions that were traditionally “off limits” to these sorts of exercises or simply not technologically feasible.

Now, leading organizations are addressing not just the effective use of a third party expense platform, but also are evaluating the use of OPA — Other People’s Assets.

As with everything in business, outsourcing moves in cycles. In the early days of enterprise computing, when mainframes and huge computer systems were the only option and the cost to purchase was high, the only model that made sense was to outsource. However, as technology changed and developed — and as credit became more readily available — many organizations spent large amounts of capital to build and manage their IT infrastructure.

IT infrastructure comprises the data center, servers, routers, switches, firewalls and more — all of the components that make up the back end of your e-mail, CRM, ERP, Web sites, Blackberry servers, file servers, print servers, etc. IT infrastructure is core to every organization and it is not cheap, especially when you want to ensure you are doing it right.

Technology is a powerful enabler of these considerations, and nowhere can this more clearly be seen than in industry of outsourced IT infrastructure and hosted IT infrastructure. Technology has developed to a point where now the highest performance infrastructure can be allocated to multiple users. Companies such as VMware and Cisco have pioneered virtualization. This technology now allows hosting to go to the next level. No longer are hosting companies providing low-end servers and storage to their customers. With virtualization hosting, companies are now providing Fortune 100 quality infrastructure. Access to this type of technology can be a game changer, but at a minimum provides end users with the best opportunity to leverage their IT infrastructure.

Hosted infrastructure is very simply utilizing the above mentioned resources that are owned by someone else. There are multiple benefits to hosted infrastructure, including: specialization by your hosting provider (hosting is their core business), access to typically better infrastructure, newer infrastructure, higher performance, etc. And in times like these, perhaps the most relevant benefit is no capital outlay. In a time when capital is scarce, spending on only what you need and not making a major asset investment in infrastructure could be the difference between being buried in debt and fighting to the top of your market.

Emotion is perhaps the most difficult obstacle to overcome when evaluating an outsourcing decision. Wehave already touched on the fact that the job can be done internally. But another emotional aspect is tied to a person’s job, and if something isoutsourced then someone, maybe even the person doing the analysis, might put themselves out of work.Outsourcing has always been associated with people losing their jobs. But in reality, just the opposite istrue. If an organization is using capital to grow instead of building its IT infrastructure, more people will have opportunities and more jobs will be available.

Outsourcing of IT infrastructure and the use of hosted infrastructure are being utilized by nearly every large organization, and it is growing in the small and medium business sector. In the next five years, nearly every organization will benefit from outsourcing, whether it is their Web sites, e-mail, file servers, offsite storage or their entire data center. Organizations are realizing very quickly that it is more efficient to allocate their capital to grow their business than to buy servers and routers.

Steven Lockhard TPI Composites

Steven Lockard – President And CEO, TPI Composites

When the goal is to carve out a spot on the cutting edge of green-energy technology, it helps to be in the business of making blades.

That’s the case with TPI Composites Inc., a privately held company now headquartered in Scottsdale that devotes a significant portion of its business to manufacturing massive wind-turbine blades used by such clients as Mitsubishi Power Systems and GE Energy. TPI Composites, which is also involved in the transportation and military vehicle markets, employs about 2,800 worldwide and operates facilities that house about 1.1 million square feet of manufacturing floor space in the United States, Mexico and China.

“Wind energy is our largest business,” says Steven Lockard, president and CEO. “It’s the business that is expanding at the most rapid pace.”

That expansion, which represents around 80 percent of the company’s annual sales, is indicative of an industry that has experienced unprecedented growth in recent years.

Lockard sees wind energy as a clean, reliable source of electricity and job creation, two areas addressed frequently in recent election campaigns.

“Three or four years ago when we had meetings in Washington, oftentimes we were trying to convince people that wind could become big enough to matter one day,” he says. “And that’s no longer the case.”

It matters now. In 2007, the domestic wind-energy industry expanded its power-generating capacity by 45 percent, installing 5,244 megawatts of wind power, according to the American Wind Energy Association. That accounted for about 30 percent of the nation’s new power-producing capacity and represented $9 billion injected into the economy. Through three quarters of 2008, wind power was on pace to add 7,500 megawatts by year’s end.

And when it comes to job creation, TPI Composites plays a vital role. A newly opened 316,000-square-foot manufacturing plant in Newton, Iowa, is expected to employ about 500 workers when it reaches full capacity. That is a welcomed development in a town hit hard by job losses when its Maytag Corp. plant closed down in 2007.

Although Lockard is optimistic about the long-term prospects for wind energy, he is also realistic about the short term, suggesting the industry may continue to be impacted by the capital crisis through, at least, the first part of 2009. His observations are exclusive to wind energy, an industryenjoying record gains of late, but there may be a warning here for other high-tech businesses dealing with current financial conditions.

“We would expect to see perhaps more modest growth (in 2009) … not the same degree of growth that we’ve been experiencing the last few years,” Lockard says.

www.tpicomposites.com

Cloud Computing

Cloud Computing: Better, Faster, Cheaper?

Cloud computing is the latest buzzword in information technology (IT), and depending on who you talk to, you will get a different answer as to what exactly cloud computing really means.

Some refer to cloud computing as SaaS (Software as a Service), utility computing, managed services, Web services, outsourcing, etc. The term is so hot as a marketing tool that every business wants to somehow be associated with it, making it that much harder to define. While a popular buzzword, cloud computing also has very real and beneficial practical applications.

Cloud computing is not the first and it will not be the last buzzword used in IT. The one constant in IT is change and it occurs at a rate much faster than in most other industries. Ultimately, the drive behind the spread of cloud computing as both a marketing term and practical business application is the bottom line. Better, faster, cheaper is always something that technology providers and consumers want.

Efficiency and performance are touted with cloud computing because they are two of the key metrics in every business decision. They are critical measurements of success in any process/technology improvement or investment. No organization should invest in a project if it does not measurably improve the status quo, and efficiency and performance are two quantifiable ways to track this. In IT, servers, disk (storage), memory, space and power consumption are all easily quantified, and gains or declines in efficiency and performance can be measured down to the second.

Historically, many organizations have failed to look at these IT components individually or even at an aggregate level to measure the true cost of their IT infrastructure. Now, organizations large and small are determining that building, owning and operating their IT infrastructure is one of the most significant operating expenses they have. A principal reason for this is that most organizations operate their IT infrastructure very inefficiently, as IT is not their core competency. This inefficiency can be tracked from their internal data center (typically a small space in their office) through their individual servers. The data center is the heart of an IT infrastructure providing power, conditioned air, and telco connectivity, all to support the server and associated infrastructure. Independent studies have shown that the average server utilization is less than 20 percent. Even if the server is only using 20 percent of the resources, it is using 100 percent of the power. This type of inefficiency is very common.

Directly associated with cloud computing and its expanding recognition is virtualization. Virtualization, like cloud computing, has many definitions depending on who you are talking to, but the simplest explanation is that virtualization allows the resources of various types of hardware to be shared.

Virtualization has exploded in no small part due to VMware’s ESX software. ESX is software that allows organizations to run multiple different operating systems on the same computer. These operating systems run separately and securely from the others, but allow for utilization of the same memory, processor, storage and power, based on the individual operating system needs. This is an example of how increased efficiencies and performance can be gained with virtualization and, by proxy, cloud computing. No longer is there a one-to-one relationship between an operating system and a server. Individual servers running on a server with virtualization software can run optimally, utilizing resources from the pool as needed and giving them back when they are not.

So what is cloud computing, and is it truly better, cheaper and faster than a traditional architecture? Cloud computing is so nebulous at this time there is no clear answer.

The answer to the second part of the question is a little more straightforward, and that answer is yes — but a qualified yes. Consumers need to be aware of the “pretenders” that are offering cloud computing services and also be aware of the level of service they can expect. Whether they are working with a large provider that is trying to sell subscriptions to their unused space or a small cloud computing provider that is pushing very poorinfrastructure, they need to understand exactly what they are getting. Consumers need to know that they are receiving better efficiency and performance per dollar spent. It is beneficial to work with providers that are exclusively operating in this segment who do one thing extremely well.

Web 2.0

Web 2.0 Offers Companies A New Way To Conduct Business

Those unable to offer a clear definition of Web 2.0 are not alone. Even computer industry experts have a hard time agreeing on exactly what it is.

“The reason why there are so many different opinions is because the term is so comprehensive,”says James Windrow, director of interactive strategy for Scottsdale-based I-ology, an Internet strategy firm. “It’s misused so often to include absolutely everything, all new technology that’s been developed for the Internet for about the past four to five years.

“The way I define it, and I use Web 2.0 and social media interchangeably, I define Web 2.0 as just technology that’s used to facilitate communication or collaboration amongst different people.”

David van Toor, general manager and senior vice president for Sage CRM Solutions North America, a business software company with offices in Scottsdale, looks at Web 2.0 technology from a business perspective.

“It’s describing, really, the concept that it’s the way that businesses can derive value from treating the Internet as a technology platform and as a business platform,”he says. “To me, it’s a way of conducting business – a different way of conducting business.”

Although the term implies some major redo of the Internet experience, “in reality, it’s just the next version, it’s the next step, it’s an evolution of the process,”according to Tyler Garns, director of marketing for Infusionsoft, a business software company in Gilbert.

The tools that come under the vast Web 2.0 umbrella have led to online communities and social networking, video sharing, blogging and wikis. If you post a page on MySpace or Facebook, watch and comment on a YouTube video, review a product on Amazon or glean information from Wikipedia, you are taking advantage of Web 2.0 technology.

Some businesses have fully embraced Web 2.0. When General Motors stock took a major dip in October, CEO Rick Wagoner appeared in a short YouTube video to state his company’s case. Cable giant Comcast is effectively using the social networking and micro-blogging site Twitter as an element of its Comcast Cares program. Go to Sage’s Web site for ACT! (www.act.com), its popular contact and customer management software, and you can join discussion forums, access an executive’s blog or suggest a feature for a future product update.

“I don’t need a marketing team to communicate with customers now,” van Toor says. “I can do it directly on the blog. I don’t have to force my customers to go through a service department to reach me.”

That’s part of the big change brought about by Web 2.0. In the past, the Internet experience was pretty much a one-way conversation. There was some modest interactivity, but many companies were satisfied using their Web sites as online brochures. Today, businesses are able to engage customer and employee collaboration as never before. Corporate executives are instantly accessible. Active participation results in lightning-fast dialog and feedback.

Another important point is there is now a type of corporate transparency never available before.

“The way that businesses today are leveraging that is they’re opening up their companies and being fully transparent,”Garns says. “What that allows the customer to do is to have a direct view into the company. And when they see things they like, they then trust the company much, much more.”

Windrow points to a change in the way Web 2.0 impacts a company’s ability to control its brand message. In the past, he says, businesses sought complete control.

“In today’s Web 2.0 world, that’s just not the case,”Windrow says. “Now the brand message has left the control of the company and is firmly with the consumers. They are controlling what’s being said about companies. They’re controlling what information is being shared. And they’re actively seeking ways to punish companies that they feel are socially irresponsible in one way or another, or reward companies that they feel are acting in the best interest of consumers.”

That’s why it’s especially important for businesses to offer consumers direct communication options.

“If you invite them to your business and to your sites, and allow them to communicate there in the way they want to, then you can respond to them in a way you can’t if they do it on other people’s chat rooms or places like Amazon,”van Toor says.

Selling, in particular, has been dramatically impacted by the Internet and Web 2.0 technology. According to Garns, today’s consumers educate themselves. They read reviews, hop into forums and find out what others are saying.

“By the time you go to purchase a product or service, you know exactly what you want and you know the price you want to pay,”he says. “When you walk in the door, you’re ready to negotiate. And so the business that you’re buying from has now been cut out of the sales process.”

Mobility is part of a larger trend in technology called "unified communications."

Make Sure Your Mobile Work Force’s Technology Is Secure

Business mobility seems to be the wave of the future and that future is now. Besides just being “cool,” business-managed mobility systems may be the answer to quite a few of your business challenges.

Mobility is part of a larger trend in technology called “unified communications,” which is bringing voice, video and data communications together in new ways to improve productivity, efficiency, and customer interaction, driving satisfaction. The new trend of mobility allows employees to connect to the office from just about anywhere in the world. More than just e-mail, employees can now securely access company files, open documents, complete forms and submit new items for record.

But to allow all of those things to happen, business grade mobility systems today must be secure and reliable. Advances in security encryption technologies and device durability are allowing mobility enabled devices to sky-rocket employee productivity and customer satisfaction, positively impacting the bottom line.

The key to implementing mobility is understanding who will be using it and how they will be using it. Executive and managerial-level staff have been using e-mail enabled PDAs for a while now, but the new age of mobility is much more than e-mail on a cell phone. The new age of mobility brings in a whole new group of users whose daily job relies more on process than communication. These users are diverse with very specific application requirements driven by their job duties; they may be able to use hand-held devices or may require full-size computing devices. It is important to note that mobility is not exclusive to users working outside of the office, but includes any non-desk bound user that requires continuous connectivity while working free of wired connections.

Software applications such as Microsoft Dynamics, which includes Microsoft CRM and Sharepoint, offer companies the flexibility to develop systems that match the individual employee’s requirements, even as they vary between types of mobile workers. Mobile sales staff can enter opportunity information on site through Web-enabled customer relationship management (CRM) applications, while mobile technicians can complete service tickets online with custom forms accessible through company intranet portals. In either case, duplication of data entry is eliminated, reducing the chance of error, increasing the speed of information transmission and providing a faster solution to the customer. Of course, CRM and service tickets are only two examples of productivity enhancers available with mobility applications.

Security should be a primary consideration by a business before deploying a mobility solution. When transmitted data is no longer limited to the cables connecting one device to another, additional measures should be employed. Virtual Private Networks (VPNs) allow any device connected to the Internet to create a secure connection with the business network. VPN technology requires multiple, continuous authentications between the device and the base network. However, the authentication process is mostly behind the scenes and unknown to the user.

There are two primary kinds of VPN connections — IP Sec and SSL. IP Security (IP Sec) VPN connections require pre-installed client software on the accessing device. Secure Sockets Layer (SSL) VPN connections use the accessing device’s native SSL encryption and do not require pre-installed software. This allows any Web-enabled device in the world access to controlled parts of your company’s network after providing qualified credentials. Of course, the quality of the remote connection will be reliant upon both the wireless connection and the company’s base network. Both offer specific access controls and should be discussed with an IT professional before making a selection.

Despite the effort required to determine a proper mobility solution for your organization, the rewards are numerous. With continuous connectivity, employees have access to your company databases of information so they can find answers to difficult questions without leaving the customer. Online forms reduce the amount of time required to complete a single task because information is only entered once. Also, being connected to your company’s network in real time can keep the field worker instantly apprised of up-sell opportunities and promotions. Employees have greater flexibility to get the job done, whether in the office or not, possibly answering the question of what to do with rising gas prices. And customers receive the service they expect in the time they want, leading to continued business and revenues, even in a tightening economy.

Business mobility options are diverse and vast, but can take your business to new heights in customer satisfaction, employee productivity and overall efficiency. Before deploying a mobility solution, talk with a mobility solutions expert who can provide guidance on the best solution for your business needs today and into the future.

Sommer Decker is a marketing specialist for Network Infrastructure Corporation, www.nicweb.com

Shore Leave 2008

IT Offshore Outsourcing Is Getting Competitive

These days, one is more likely to hear a politician or corporate executive use the term “offshore” than a sailor. That’s because offshore outsourcing and the more general offshoring have become common and controversial business practices — especially when it comes to information technology.

First, the controversial part: When you hear politicians griping about companies shipping jobs overseas, they are talking about offshoring.

Simply defined, offshoring is the practice of relocating certain aspects of a business to foreign countries primarily to take advantage of lower-priced skilled labor. This can involve manufacturing or services. Plus, it comes in many forms, including one where parent companies sets up an offshore operation.

shore leave 2008

Offshore outsourcing, a practice more common to IT, involves shipping certain business operations or processes to third-party providers that utilize overseas locations. This can involve multinational service providers such as IBM, Unisys and EDS, which is scheduled to become part of Hewlett-Packard this year. Or it can involve foreign companies, such as India’s Tata Consultancy Services, Wipro Technologies, Infosys, Cognizant and HCL Technologies.

You’re more likely to hear candidates talk about offshore outsourcing than business leaders.

“It’s still a very popular business practice nowadays,” says Benjamin Shao, associate professor of Information Systems at Arizona State University’s W.P. Carey School of Business. “But I think U.S. companies now have learned from their own experience or from their competitors’ experience over the last few years. So now they also try to be a little bit more discreet and careful when it comes down to the idea of offshore outsourcing.”

TechsUnite.org, a high-tech workers union site, claims 528,478 U.S. jobs have been offshored since Jan. 1, 2000 through early August of this year.

The main reason for offshoring, according to Shao, is cost reduction, which may equate to a savings in salaries alone that ranges from 30 percent to 50 percent. Other considerations include incentives from foreign governments and access to highly skilled technical employees in such countries as India, China and Malaysia. Also, the move overseas has been facilitated by advances in technology.

“It makes it easier now for companies to manage an IT project on the global scale, which was not possible before the Internet era,” Shao says.

Ross Tisnovsky is vice president of ITO research for the Everest Research Institute, a subsidiary of the Everest Group. The global consultancy organization serves a number of Fortune 500-level buyers of outsourcing services, including several with interests in Arizona.

He separates IT outsourcing into three main categories: infrastructure outsourcing, application development and maintenance outsourcing, and IT consulting. The first deals with running such operations as servers, networks, etc. The second includes writing code for new applications and maintaining code for existing applications. The third ranges from setting up data centers to consulting on infrastructure.

IT offshoring offers two choices.

“I would loosely break down offshoring into two components,” Tisnovsky says. “One, you outsource to an external supplier that has major operations offshore. And then, if you go with a multinational supplier … then you are likely to get a lower percentage of your resources offshore. But if you go with an offshore supplier … then you will get a much larger percentage of your work force located offshore.”

Tisnovsky says the worldwide pool of developers serving the United States in application development and maintenance amounts to about 25 percent located offshore.

When it comes to outsourcing IT operations and infrastructure, Tisnovsky says there are two components: the asset-heavy model where a supplier takes ownership of a company’s IT assets and the asset-light model where the service provider merely manages and controls a company’s IT assets.

“If a U.S. company would like to consider the use of offshoring as a value lever in infrastructure outsourcing, there’s a more important decision for them to make before that, which is what they plan to do with their IT assets,” Tisnovsky says.

Multinational providers are the most likely options for the asset-heavy model, while foreign providers become a viable option in the other case.

Neither of these options is without risk and that’s where a company like Jefferson Wells comes in. Jefferson Wells is a professional services firm with an office in Phoenix. MacDonnell “Don” Ulsch is its director of technology risk management and author of the new book, “Threat! Managing Risk in a Hostile World.”

His company helps clients make informed judgments when it comes to IT offshore outsourcing. For example, it’s important to make sure a providercan protect data. Don’t choose one based on price alone.

cover october 2008

When selecting an offshore service provider, considerations include knowing a country’s history, investigating a company’s hiring process, understanding physical and geographic risks, and documenting a company’s security-related policies and procedures.

Ulsch says IT offshore outsourcing is a reality of business.

“Clearly there is a certain amount of work that is going to go offshore. I don’t even think that’s a question,” he says. “To be competitive in a global environment, there’s probably no other solution.”

wpcarey.asu.edu
www.everestresearchinstitute.com
www.jefferson-wells.com

Custome Fit EDU 2008

A Custom Fit EDU

By Don Harris

From two hours to two years, customized education programs are being offered to boost the performance and expertise of executive-level employees — and as a result improve a company’s bottom line.

Often, businesses struggle with putting the right person in the right leadership position. Even then, there might be gaps between what the person knows and needs to know. Customized programs are designed to fill those gaps.

cutome_fit_edu 2008

The focus of universities is on education, not necessarily training. There is even an executive education program that puts upper-level employees directly into community service through nonprofits as a way to help those in need and at the same time generate new skills and ideals that will benefit the employee’s own business.

Andy Atzert, assistant dean of the W. P. Carey School of Business at Arizona State University, and director of the school’s Business Center for Executive and Professional Development, says the center aids companies by expanding the knowledge and skills of managers and leaders, but doesn’t do tactical training, such as how to write a business plan.

The types of industries that utilize the center, Atzert says, include financial services, health care, technology, semiconductors, automotive, agribusiness, supply-chain services, information systems, and two major out-of-state oil companies.

“There is a demand outside Arizona for the expertise that we have,” Atzert says. “In fact, a majority of the companies are from out of state, and many of those are engaged in our online program.”

When Atzert says customized, he means customized.

“Some companies want a two-hour seminar, others want a customized MBA program that will take two years,” he says. “We deliver the program at company locations, at ASU or online.”

Because many companies have global work forces, the online option is getting increasingly popular. It’s more costly to send a person to an off-site location, not because of the travel expenses, but because of the time involved in being off the job, Atzert says.

Many of the courses offered focus on supply-chain management, which is a business discipline that has to do with how goods and services are bought and moved from one location to another.

For example, Toyota faces several supply-chain challenges in obtaining all the parts and materials needed to build an automobile. Atzert identifies questions the ASU program helps answer, such as what is needed, where does it come from, how do they buy it, how do they decide what to buy, how do they work with their designers, and what’s the best way to optimize their efforts and expenditures?

At the University of Phoenix, AZ LeaderForce is a program that pairs key business leaders with local nonprofits in a yearlong project to help improve the various organizations’ services and train those executives seeking leadership guidance.

Rodo Sofranac, University of Phoenix curriculum developer, says the program benefits businesses in a number of ways, including quality-of-life awareness, increasing leadership skills, and ethics.

“The issue is for participants in a project to take what they have learned and experienced back to their workplace and incorporate it in their personal life,” Sofranac says.

The University of Phoenix, which provides classroom facilities, produces a curriculum and donates its services for AZ LeaderForce, works with the Collaboration for a New Century, an organization formed about 10 years ago through the efforts of Phoenix Suns Chairman Jerry Colangelo. Topics covered include ethics, integrity, leadership, critical thinking skills and the social responsibility of business.

Steve Capobres, executive director of the Collaboration for a New Century, says the organization targets poverty issues and enlists the business community to work with human service agencies.

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“At the same time,” Capobres says, “we have an executive leadership development program going on. We not only want their time, we want to mold them, cultivate them to become the next generation of business leaders. It’s a yearlong curriculum that takes them through the issues of what a good corporate citizen is. What does it mean to work in the community? What is your own leadership style, your ethics? It’s all about building good corporate leaders who are going to replace our older, retiring leaders.”

Among the corporate participants are Salt River Project, Bank of America, UBS Financial Services, State Farm Insurance, Lennar Homes and American Express.

“By taking people outside the world of business and putting them in the community to deal with the issue of poverty,” Capobres says, “those employees are going back to the company to be a better manager.”

wpcarey.asu.edu
www.phoenix.edu
www.thecollab.org

AZ Business Magazine October 2008 | Previous: Big Money… | Next: At Your Service
Proxies

The SEC Catches Up On New Technology In Proxy Solicitations

A quick tutorial: Proxies are the means by which public shareholders vote. The Securities Exchange Act of 1934 governs the solicitation of those proxies. The act and the regulations adopted by the Securities and Exchange Commission under the act are designed to ensure a fair process with adequate disclosure to shareholders so they may make an informed voting decision in a timely manner.

In the past year, the SEC has adopted significant rules intended to simplify, clarify and modernize proxy solicitations by use of the Internet.

In July 2007, the SEC adopted amendments that modernize the proxy rules by requiring issuers and other soliciting persons to follow the “notice and access” model for proxy materials. Soliciting persons are now required to post a complete set of their proxy materials on an Internet site and furnish notice to shareholders of their electronic availability. The Internet site must be a site other than the EDGAR (Electronic Data Gathering, Analysis and Retrieval system) maintained by the SEC. The site must be publicly accessible, free of charge and maintain user confidentiality. In addition, the materials posted must be in a format convenient for printing and for reading online. Companies must provide paper or e-mail copies, as specified by the shareholder, within three business days of a shareholder’s request.

Notice to shareholders can be provided in one of two ways: the “notice-only” option, which is simply notice of electronic availability; or the “full-set delivery” option, which is a full set of paper proxy materials along with a notice of Internet availability. Under the “notice only” option, a notice must be sent at least 40 calendar days before the date that votes are counted. Under the “full-set delivery” option, notice need not be made separate and the 40-day period is not applicable, so the notice can be incorporated directly into the proxy materials.

Under both options, the notice must include certain specific information and must be filed with the SEC. The options are not mutually exclusive, so one option can be used to send notice to a particular class of shareholders, while the other option can be used to send notice to others. Intermediaries and other soliciting persons must also follow the “notice and access” model, with some exceptions. Specifically, intermediaries must tailor notice to beneficial owners, and soliciting persons other than the issuer need not solicit every shareholder. Most large public companies were required to follow the “notice and access” model for proxy materials as of Jan. 1, 2008. All others, including registered investment companies and soliciting persons other than an issuer, can voluntarily comply at any time, but must fully comply by Jan. 1, 2009.

Effective Feb. 25 of this year, the SEC adopted further amendments that encourage use of the Internet in the proxy solicitation process by facilitating the use of electronic shareholder forums. These amendments are intended to remove some of the legal ambiguity resulting from the use of electronic shareholder forums by clarifying that participation in an electronic shareholder forum is exempt from most of the proxy rules if specific conditions are met. The new rules also establish that shareholders, companies and other parties that establish, maintain or operate an electronic forum will not be liable under the federal securities laws for any statement or information provided by another person participating in the forum.

Specifically, any participant in an electronic shareholder forum is exempt from the proxy rules if the communication is made more than 60 days before the announced date of the company’s annual or special shareholder meeting, or if the meeting date was announced less than 60 days before it was scheduled to occur, within two days of the announcement, provided that the communicating party does not solicit proxy authority while relying on the exemption. Solicitations that fall outside these relevant dates continue to be subject to the proxy rules.

Further, if a solicitation was made within the relevant dates but remains electronically accessible thereafter, the solicitation could then become subject to the proxy rules. In this regard, the SEC suggests that forum operators give posting users a means of deleting their postings or having their postings “go dark” as of the applicable 60 day or two day cut off.

While the amendments exempt solicitations from the proxy rules, they do not exempt posting persons from liability for the content of their postings under traditional liability theories, including anti-fraud provisions that may require a participant to identify himself and which prohibit misstatements and omissions of material facts. Further, the amendments extend liability protection only to shareholders, companies and third parties who create, operate or maintain an electronic shareholder forum on behalf of a shareholder or company. These persons receive protection against liability for statements made or information provided by participants in the forum, so long as the forum complies with federal securities laws, relevant state law and the company’s charter and bylaws.

Karen C. McConnell is partner-in-charge of the mergers and acquisitions/private equity group; Adrienne W. Wilhoit is a partner; and Brooke T. Mickelson is an associate at Ballard Spahr Andrews & Ingersoll, www.ballardspahr.com.