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Why is the IT cost in Japan so expensive?
The breakthrough for Japanese economic revival
lies in the review of maintenance contract [Summary]
<Introduction>
For many years, the contents of IT maintenance service contract system in Japan were cloaked in mystery. In fact, most IT users had misunderstood that their IT manufacturers laid out the most appropriate and reasonable maintenance service framework within the provided contract. That is why IT users continued to pay a total amount of one trillion yen a year as their IT maintenance service cost with no doubt,
Consequently, IT manufacturers did not have to commit themselves to develop a new system nor product as the annual maintenance cost provided them a constant profit. This situation led to the fact that Japanese competitiveness in international market to be 17th despite the fact that the amount of Japanese IT investment is 2nd with 12 trillion yen a year.
The 20th century was known as the glabor-intensive societyh in which mass production and mass consumption were the mainstream. However, from the 21st century onwards, it will be the gknowledge-intensive societyh in which superior system quality is pursued with knowledge and technique being the mainstream.
Therefore, in order to reconstruct Japanese IT market, evaluating the contents of IT maintenance service contract and visualize IT service cost are need to be executed. The IT maintenance cost reduced after audit of IT maintenance contract can be capitalized on cultivation of high-quality IT professionals. I believe that this approach leads to a establishment of impartial IT competitive society in which superior products are provided at a lower price. As a result, Japan will be recognized as the top global IT leading country again.
<Chapter 1: Why is the IT Maintenance Cost so Expensive?>
Despite the fact that the annual amount of 12 trillion yen has been invested on IT technology development, Japan has become an IT developing country in terms of competitiveness in international market. Additionally, unlike the United States, there is no user-led free maintenance service market in Japan. Instead, the structure such that the IT vendors and the system integrators provide maintenance for the installed system without usersf choice has taken root. The IT manufacturers had installed the beneficial system for themselves and userfs convenience was ignored.. This was how the annual system maintenance service cost became their stable profit.
In the worldwide IT market, new service called gUtility Computingh, packaging of computing resources including CPU and storage, is becoming popular. Users can rent computing resources without actually installing hardware, and only charged for the actual amount of usage like public utility such as electricity. In order for Japan to stay abreast of the times, innovative transformation of maintenance service such as gUtility Computing Serviceh (service can be received when necessary with amount needed) needs to be launched. For this transformation to be accomplished, both service provider and service receiver have to recognize the principle ; gthe receivers create the needs for society and not the providersh.
<Chapter 2: Mechanism and Gimmick of IT Maintenance Contract System>
Maintenance contract system is ae system to pay only fixed maintenance fee when productsarepurchased or leased. This system also stipulates the provision of maintenance service when any trouble occurs after installation. At the time of first machinery production, maintenance contract system was introduced by incorporating its repairing cost in its rental cost. However, this system has turned into a unilateral profitable system for service providers earning fixed amount of maintenance service cost as breakdown or failure of machine which are uncommon in these days. The annual maintenance contract fee is essentially meant to be decided from the service level (eg. correspondence time) based on operation rate, which is calculated from failure rate, mean time between failures (MTBF) and mean time to repair (MTTR). Nevertheless, this logical process is seldom-utilized and that is why the contents of maintenance cost are yet to be elucidated.
To date, users hold a wrong assumption such asgthe product maintenance must be made by the product manufacturer and not the othersh. But from now on, we should aim for establishment of service system that only provides needed support when necessary.
<Chapter 3: IT Maintenance Cost can Definitely be Reduced>
For a certain period of time after installation, all the maintenance made with free of charge. After this fee-charging period, users need to shoulder all the cost. In order to receive the service with the same level provided during the period, users were required to conclude the maintenance contract. The problem here is that the agreements are too technical to understand that users could not compare them with that of other service providers nor question about services before concluding the contract. The necessary factors to solve those problems are 1) weight the contents of maintenance contract with the ones of other service providers; and 2) receive gsecond opinionh evaluation of the actual service after execution of the contract.
The best methods for IT operation/maintenance cost reduction are 1) the investigation of an goperation reporth submitted to users from service providers; and 2) the extraction of issues and vulnerable problems in relation to maintenance management through visualization of maintenance service contents and cost structure. JTP, as the first company in Japan, has launched the practical solution called gExternal Audit of IT Maintenance Costh. Within this service, we as a third party investigate the maintenance service cost and evaluate whether the cost is appropriate or not. If any issues are found, we submit gan audit reporth with improvement proposal to users, rate service providers, and release a report if necessary. Since the launch of this service, we have achieved several remarkable successes.
<Chapter 4: Audit of IT Maintenance Cost>
The purpose of our gExternal Audit of IT Maintenance Costh is to get the IT system operation and maintenance into the optimum and appropriate condition. JTP does not have any vested interests with IT manufacturers nor IT vendors, and that is why we are able to execute audit from the view of users and facilitate gthe optimizationh without interfering favorable relationship between users and IT vendors.
The first part of current status analysis is gthe audit based on the ideal modelh. In this audit, the existing maintenance contract contents are compared with the ideal. The second part of the analysis is gthe audit based on the past record of service provided for troubles and failureh. In thispart, the contents of the service reported are checked and evaluated whether the provided service is appropriate based on maintenance contract contents. In order to evaluate the service level, the Service Level Agreement (SLA) is vital as the SLA assures and officially acknowledges the contents, the range, and the quality level of service to be provided between users and service providers.
If any difference with maintenance contract contents is found, it will be visualized and rated in an easy-to-understand manner. Moreover, the solution for the extracted vulnerable problems will be proposed in order to achieve cost reduction. As a part of the successful cases, annual cost reduction of five billion yen was achieved in a major office automation machinery manufacturer after undertaking our proposed solution gthe owned-operated maintenanceh. Additionally, annual cost reduction of more than one billion yen was accomplished in a life insurance company, when the operation cost of help desk was shifted to be charged based on actual calls and not on fixed cost.
I believe that the reveal of the actual picture of maintenance service contents leads to formation of mostly needed custom-made-type maintenance service system and stimulates the qualitative transformation to provide high-quality products at low price.
<Chapter 5: To Become the Top Global IT Leading Country>
From the 21st century, the flow of era has shifted from glabor-intensive societyh to gknowledge-intensive societyh although the establishment of human resource cultivation system has not caught up. Recognition of gvalueh and gruleh of the new era and adaptation to changes in value and social system are essential for Japan to become the leader of the new era.
In fact, the most important task in IT cost reduction is human resource cultivation. Cultivating the user engineers to be familiar with onefs system helps to elucidate the contents of IT operation/maintenance cost. It also promotes the advancement of technological quality of the customer engineers. As a result, introduction of the most needed system and provision of the most required service become viable. With the resulted international competitiveness, I believe that Japan will be recognized as the top global IT leading country again.
With the qualitative advancement of IT engineers and the development of IT society, gsecurityh will be the most vital factor. Until now, anyone known as a system engineer was allowed to enter the centre of information system without disclosing onefs identity. However, since the September 11 attacks in the United States, vicious attacks via network have frequently been conducted and construction of the secure and safe IT society has become necessary. I believe that IT engineers called gEthical Hackerh will be the pioneer to construct the secure and safe IT society. The Ethical Hackers take countermeasures towards hackers in order to construct the secure and safe IT society. As the era of cloud computing starts, security will become considerably important. We as IT engineers have the responsibility to see through the IT society development as we are the one who brought machines into our society as a tool.
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