Archive for March, 2009

You Cannot Outsource Risk

With the recession forcing companies to become more competitive outsourcing is going to grow in popularity, but at what cost to your company’s security? Whether you are outsourcing development, services or maintenance, the bottom line is you are allowing others to create code and run services that your customers will perceive as coming from you – meaning that you are responsible for any functional problems or security breaches. Outsourcing security According to Gartner, more than 60% of companies do not do any security risk mitigation when outsourcing development. An example of a simple risk mitigation strategy would be to contractually require outsourced developers to adhere to best practices in secure coding. Allowing outside software developers into your shop and then not demanding that they produce secure code raises the white flag to any malicious or insecurely written code. ADVERTISEMENT Of course it is not easy to guarantee that your programs and data will remain secure once you have allowed outside applications to run on your servers or integrated them into your web presence. But there are practices you can adopt that will ensure, as much as possible, that you maintain control over the security of your company and customer information. Managing outsourcing So what should a responsible chief information security officer be doing? 1. The best time to enforce security at a service provider is before you sign the contract. Make sure you make specific and detailed requirements in the contract for what you will and will not accept. (more…)

March 17th, 2009

Recession a catalyst for legal outsourcing

Smaller law firms that have been reluctant to use legal support services may change their minds in the light of current economic conditions. That was one of the details that emerged from the recent Leadership Forum held by India’s National Association of Software and Services Companies (NASSCOM). As well as attracting delegates from NASSCOM’s core IT-BPO audience, the event drew in a contingent of interested observers from the legal process outsourcing (LPO) field.

Outsourcing expert Mark Kobayashi-Hillary, who attended the event, told IP Review Online: ‘While a number of larger law firms are beginning to explore legal outsourcing, some of the smaller firms don’t have the same scale to be able to launch LPO deals or joint ventures. There are definitely firms out there exploring the options, and the potential for growth is there. The recession could act as a catalyst to bring new firms into the sector.
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March 17th, 2009

Shared Services as a Cost-Cutting Tool Shows Dramatic Expansion

Shared Services as a Cost-Cutting Tool Shows Dramatic ExpansionShared Service Organizations (SSOs) have achieved dramatic improvements in cost and productivity, according to new research from The Hackett Group, Inc. (NASDAQ: HCKT). While SSOs have been rewarded for such good work, business expectations are now forcing companies to drive toward a second wave of value creation utilizing complex operating models.

Hackett’s latest Book of Numbers research finds that companies seeking to move up the value chain are implementing a multi-layer shared services model that incorporates transaction processing centers in low-cost regions, centers of excellence, and high-level onsite support for analysis and decision-making. Many SSOs have also expanded beyond finance to incorporate functions such as IT, procurement, and HR — in fact, an “everything in G&A” approach is leading edge. At the best SSOs executives make sourcing decisions relating to scope and geography within a continuous improvement and customer service culture.

Results from the research, which examines shared service operations at more than 150 global companies, is featured in Hackett’s latest Book of Numbers research volume, “World-Class Shared Services: Expanding Beyond the Transaction.” The research also features case histories on shared service successes at Hewlett-Packard and Royal Philips Electronics.
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March 4th, 2009

Wealth managers move towards outsourcing

Wealth managers move towards outsourcingDrive to cut costs is pushing the sector down the third-party route

The most valued attributes of a good wealth manager, after producing strong returns, are discretion and security. As a result, wealth managers are reluctant to hand over back-office functions to third parties. However, under pressure from the financial crisis, they are considering outsourcing.

Charles van der Merwe, chief executive of Pershing, a subsidiary of the Bank of New York Mellon, said outsourcing has helped wealth managers and asset managers reduce middle and back-office costs. He said: “There is no doubt that costs have been a strong driver for outsourcing.”

A survey of private client wealth managers from consultancy Summerson Goodacre found that the two most important factors that firms take into account when outsourcing are cost and quality and more than half of respondents said outsourcing provided more cost benefits than keeping administrative functions in-house.
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March 4th, 2009

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