43% of decision-makers now see it as a critical element of BPO
Half of today’s enterprise buyers are disappointed with the innovation they have currently achieved
The potential to achieve innovation across many core business processes is huge. This was notably cited in industry-specific process and analytics areas, in addition to some maturing BPO domains, namely procure-to-pay, supply chain and recruitment
So why aren’t half of today’s enterprise buyers achieving innovation?
When we asked those executives with significant influence over BPO decisions their prime concerns for failing to achieve innovation in BPO, they cited the following reasons:
It is abundantly clear that enterprises buyers recognize that the blame lies a lot more in their camp than their provider’s, with well over a third citing poor change management and communications as a great concern, coupled with the fact that their current governance team has little juice internally to drive an innovation agenda. If they were going to blame primarily their provider’s lack of innovation prowess, much more than a fifth of buyers would have cited “the wrong composition of skills among their governance team and the provider’s relationship team” as a major concern.
In the next installment of this innovation saga, we will reveal what buyers are planning to do to achieve innovation, but here are a few clear areas they can work on:
Create a aggressive innovation agenda and a plan to keep that agenda fresh over time. Buyers need to stipulate the need to explore new and creative ways to improve productivity and top-line growth as a core element of their BPO endeavor and communicate this aggressively, on a repeated basis, to their entire retained operations organization.
Communicate this innovation agenda to both governance and provider teams. Talk to any buyer beginning to achieve some innovation success with their engagement, and they will tell you the same thing: “We recognized what we needed to do internally, and communicated aggressively with our provider to start delivering it with us”. Until buyers take the bull by the horns internally and communicate to their partners the new direction they are taking, they will never escape from innovation purgatory.
Create an innovative contract with their provider. Buyers need to incentivize their provider financially to help them achieve gains in both productivity and growth. This is already beginning to happen with several recent BPO engagements, where the provider has demonstrated the confidence to insert productivity incentives as high as 20% in some of today’s recent contracts. Providers will step up to the plate with the right approach, if they have the financial incentive to do so.
Stop playing providers off in a low-cost bake-off. If the buyer simply squeezes the life out of their provider with a cost bake-off, they are unlikely to get much in return beyond operational delivery to meet the contracted service levels. Some of the leading BPO providers are now inserting gain-sharing elements into their deals in order to beat off competitors dropping their prices, because it is desperate to win the deal. The better providers now have the advantage of knowing where they can offer innovation incentives to gain ground in tough pursuits. In any case, most of the providers are now operating within a similar price band, so focus needs to move away from simply price, and more to which ones are better prepared to be incentivized financially for driving innovative results.
All-in-all, we are encouraged that many enterprise buyers have recognized the need to get their act together and start driving the innovation agenda. The future for innovation is bright, and many of today’s enteprises are figuring out how to make some progress towards it.
*For the purposes of this study, Innovation was defined as “the customer going beyond transactional / operational work to achieve new productivity gains and /or new revenue streams by implementing new practices through unique, creative methods.”
Zach Nelson, CEO of NetSuite, a.k.a The Admiral of Cloud BPO
“First gain the victory, and then make the best use of it you can.” Admiral Horatio Nelson, before the Battle of the Nile, 1st August, 1797
“The cost of managing IT infrastructure is four to five, or even ten times the license cost. It’s enormous. We’ve eliminated all the cost to manage this stuff, so that’s a huge advantage for BPOs.” Zach Nelson, CEO of NetSuite, before the Battle of Cloud BPO, 25th May, 2010
So without further ado, let’s do Part II…
Phil Fersht: Zach, there’s been a lot of talk in our industry around business-process-as-a-service, or business as a utility, with an entire business process being accessed by a pay-by-the-drink model, hosted in the cloud. How do you see BPO, SaaS and cloud all coming together? Is it going to be a reality?
Zach Nelson:I don’t think there is any question that service providers will have to move their infrastructure into the cloud just as end users are starting to do. There’s no stopping it from a cost and productivity standpoint. Also – and what I believe is really driving this revolution in how IT services are delivered – is that customers are demanding it. So the Tata’s of the world and the people that are really tied to the SAP boat-anchor will begin to acknowledge that even though they have a lot of business with SAP, the customer wants a cost reduced environment, and something that is faster to deploy, SAP is a bad answer, and they have to transition their business model. We all saw IT budgets shrink during the downturn, and more was spent on the Cloud because of the cost reduction capabilities. Now the Genie is out of the bottle, they saw the benefit they got from the Cloud, so the Genie isn’t going back into the bottle. The customers are beginning to demand services like what Genpact and NetSuite are aligning to provide. That’s the shift you see going on now.
Phil Fersht: We’ve seen a lot of SaaS/BPO partnerships spring up in the last year, but some of them just don’t make sense. We’ve seen, for example, some providers partner with PeopleSoft to deliver it in some form of pay-by-the-drink environment, but it simply doesn’t work because getting to multi-tenant scenario with PeoplSoft is just too challenging. What makes your partnership with Genpact a game-changer?
Zach Nelson:Our model is very different than theirs. We are effectively replacing an on-premises instance of Oracle or SAP with a BPO-enabled offsite version of NetSuite. This is a new and different way to replace those Stone Age on-premises applications.
The reason the other model doesn’t work is that it’s the same model that failed in 1998. You take an application that wasn’t designed to be hosted or managed in a hosted environment and you do it anyway. It’s just too expensive. So you’re just shifting all that from the customer’s premise to the provider’s premise, and now the provider has to deal with the cost. It doesn’t go away. And as you know, the cost of managing IT infrastructure is four to five or even ten times the license cost. It’s enormous. We’ve eliminated all the cost to manage this stuff, so that’s a huge advantage for BPOs.
And from the customer’s standpoint – the challenge with serving the mid-market is how to deliver SAP-like complex functionality with a few zeros missing off the purchase order. We figured out how to do that, and we’re transferring that knowledge to Genpact so they can deliver the same sort of efficient, streamlined implementation that we’re delivering to our customers. That’s a very important part of the equation. By transferring that knowledge, Genpact can take it to the next step of adding BPO capabilities on top of NetSuite.
I can’t really envision a future where this isn’t the dominant way BPO is done, but the legacy approaches and legacy relationships definitely hamper the rate at which this stuff is being taken up by clients. Now with that said, a client that Genpact enables on NetSuite with their business process knowledge built on top of it, will have a mass advantage over someone, such as Tata, may implement with the same old SAP methodology. The cost model will be completely different, the productivity model will be completely different. So what you’ll see is the companies moving to Genpact will have an enormous competitive advantage over their competitors that are stuck in the traditional outsourcing model, and that could accelerate the way in which companies demand a solution that looks more like Genpact’s.
Phil Fersht:One of the biggest issues we’ve seen with the software-to-market channel has been with the value added resellers which see BPO as a threat to their business, where they make all their money supporting finance applications, etc. Are you seeing this dynamic in play where the VARS are very nervous about the BPOs coming into their domain? Is this something you think is going to be a conflict, and will it impact your relationship with the VARs with whom you work?
Zach Nelson:The VARs we deal with are not that worried about it, because most BPOs have not moved down market to the point where they threaten that classic mid-market VAR. Now, with Genpact’s strategy, that collision may happen at some point. But this sort of mid-market VAR spans a 10- person company to maybe a 1,000 person company, so you’re talking about a big market there.
I think the mid-market VAR is more concerned with two things: first is how they make money in the Cloud, and second is who the new competition in the Cloud for that dollar. What they are looking at, is how they transform their model from this on-premise, one-time license to this new sort of recurring revenue model. That’s their big issue today. And we’ve put together a number of programs that assuage that part of the equation so they can first make the transition and then worry about who they compete with.
Phil Fersht: Zach, it’s been a real treat to have you guest on Horses for Sources – our readers will really enjoy hearing your story.
Zach Nelson (pictured above) is President and Chief Executive Officer for NetSuite with more than 20 years of leadership experience in the high-tech industry, where he has held a variety of executive positions with leading companies such as Oracle, Sun Microsystems, and McAfee/Network Associates. Zach has been CEO of NetSuite since 2002. One of top 10 visionary CEOs in the Silicon Valley, he led NetSuite’s successful IPO in 2007.
“Gentlemen, when the enemy is committed to a mistake we must not interrupt him too soon”.Admiral Horatio Nelson, 1795
“This is a new and different way to replace those Stone Age on-premise applications.”Zach Nelson, CEO of NetSuite, 2010
Hot on the heels of its recent alliance annoucement with Genpact, we caught up with NetSuite CEO Zach Nelson to get his take on Business Process Outsourcing delivery, and how he intends to leverage that channel to oust incumbent ERP platforms from midmarket businesses with his Cloud Computing business management software suite.
Zach is a legendary figure in Silicon Valley, where he held exec positions with Oracle, Sun Microsystems, and McAfee/Network Associates, before taking NetSuite to IPO in 2007. He now finds his firm at the forefront of this new movement to leverage on-demand applications in a BPO model, or what we term at HfS “Business Process as a Service” (BPaaS). Anyhow, we dragged Zach away from the love of his life (his job, not the golf course) to get a few soundbites on how they are approaching the BPaaS model…
Phil Fersht: Good morning Zach. Let’s get straight to the point here…Fill us in on your alliance with Genpact.
Zach Nelson: The real starting point of our relationship revolves around enabling Genpact to take NetSuite and customize it to provide a platform for clients’ financial business processes around procurement and some of the other core processes Genpact is really proficient at. Our target market is upper mid-market companies, or divisions of large enterprises, which are legacy version-locked on ERP platforms such as SAP or PeopleSoft. And I believe that’s how we came together with Genpact. I think Genpact realized the inefficiencies of the traditional BPO model for the mid-market, and had a vision to change the market and the delivery model with a rich, cloud-based enterprise management platform on which other applications can be built.
Phil Fersht: Which of you will lead discussions with prospects? You with an outsourcing-interested client, or Genpact with a client it feels may benefit from the NetSuite platform?
Zach Nelson: Due to our joint target market, Genpact will be pulling us in, more than we will be pulling it in. While our companies have some overlap in the mid-market, Genpact will have more opportunities to court organizations that want to outsource their business processes. NetSuite, as a separate provider, will continue to secure opportunities from companies that want to deliver their services in-house.
Phil Fersht: One of my philosophies in BPO is that if you are focused purely on running processes at lower-cost labor, another provider will always come along and do it cheaper, and yet another cheaper, and you ultimately get down to the lowest cost denominator. We’ve seen it with some service providers offering SAP BPO services, for example, where they were simply processing invoices and paychecks at lower prices than their competitors. My stance has been if you can build some underlying software IP into your service delivery, that’s going to give you a whole new level of value capability. So,Genpact pushing NetSuite sounds great to me on paper, but my concern is what happens if you get every Genpact competitor doing the same? Is Genpact protected with any form of exclusivity in this alliance, or will you work with any provider that comes along?
Zach Nelson: Genpact has a “natural” exclusive in that I don’t think most BPO providers actually want to change their business model to give their clients a more efficient and cost-effective cloud-based solution. They want to stay on the SAP gravy train and keep harvesting that revenue. But again, I think Genpact has a different vision and strategy which will be able to deliver three-fold client value from NetSuite…cost reduction due to cloud-based delivery, the ability to embed existing IT software into the NetSuite SuiteCloud platform, and multi-country consolidations that can be achieved in as little as three months.
Phil Fersht: How will licensing of your software work?
Zach Nelson: Customers will have a single contractual touch point with Genpact. Genpact will in effect pay us for the NetSuite application and build it into the service it provides to the customer. Our initial implementations will likely be jointly managed to ensure successful knowledge transfer. But since Genpact is an extremely high quality organization, NetSuite will very quickly become part of its packaged offer.
Phil Fersht: How many client engagements are currently in discussion or underway with this partnership at this point, and what sort of energy are you sensing with the alliance?
Zach Nelson: Today, at the beginning of our alliance, we have about 10 active, big, opportunities. And of course we have to get the first ones under our belt and successfully service them. We’re seeing a lot of energy on Genpact’s side. It’s seeing great opportunity in the cloud/BPO-marriage space, and is betting on us to get them there. A great thing you’re going to see, and we’ve seen it in the mid-market VAR channel, is the companies who bet on this early have a huge competitive advantage over those who join in later. There is no stopping SaaS as the future of the way all applications will be delivered, including outsourced applications. The faster you engage, the sooner you’ll gain an insurmountable competitive advantage.
Phil Fersht: When you look down the road at your own go-to-market strategy, are you hoping the outsourcing services channel will be your next big outlet, or do you still think it will be primarily through direct sales, and this alliance with Genpact is just a little incremental play?
Zach Nelson: NetSuite has always believed the channel would be important to deliver our application’s value to the customer. When we started the company we created a program that enabled service providers of all types to deliver NetSuite as we felt strongly about giving others the ability to gain from recurring revenue. That said, the services channel has historically been reticent to fundamentally transform how they run their businesses. The direct channel is something we had to build early on because the channel was not very excited about SaaS, but we have always had in place a rich series of partner programs, and we’re very flexible in terms of how we deal with partners. Genpact is a one-off relationship in which we felt we could both alter how we market to our mutual advantage, and that of our shared customers.
In the second part of this interview, Zach will discuss how this new BPaaS model will be a game change in the industry. Stay tuned.
Zach Nelson (pictured above) is President and Chief Executive Officer for NetSuite with more than 20 years of leadership experience in the high-tech industry, where he has held a variety of executive positions with leading companies such as Oracle, Sun Microsystems, and McAfee/Network Associates. Zach has been CEO of NetSuite since 2002. One of top 10 visionary CEOs in the Silicon Valley, he led NetSuite’s successful IPO in 2007.
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Sue Marks, Chief Executive Officer, Pinstripe Talent Acquisition Solutions
Without any doubt, the best known figure in the world of Recruitment Process Outsourcing is the all-tweeting, i-pad-wielding, champagne-supping, serial entrepreneur herself, Sue Marks, CEO of high performance talent acquisition solutions firm, Pinstripe.
As we ready ourselves to produce the results of our new RPO study in conjuntion with Human Resources Executive magazine, who better to have a conversation about the future state of RPO than Sue herself? So we sent our roving HRO analyst, Mindy Blodgett, out to catch up with Sue the other day…
Here at Horses, our research reveals that C-level executives are showing heightened interest in the potential of Recruitment Process Outsourcing (RPO). Prior to the deep economic downturn, many enterprises resisted handing over their recruiting functions to a third party to manage – many saw recuiting as something they could manage better themselves. However, the demands of a fast moving, post-recession economy are nudging business leaders towards exploring RPO as a means to add talent acquisition expertise and flexibility in a fast, cost-effective way. Many are faced with the need to scale their operations faster than they had envisaged, and they simply to do not have the internal resources to cater for these requirements in this market.
However, misconceptions about what RPO actually is continues to muddy-up the marketplace and confuse the buyer. We talk with Sue Marks, the CEO of RPO provider Pinstripe, about trends in this slice of the HR universe and whether it might even be time to retire the phrase “RPO” in favor of something that might better describe what companies get when they outsource their recruiting process in all or in part.
An unabashed workaholic and gadget geek (she loves her new iPad, we at Horses can attest to that) – Sue Marks is the founder and CEO of Pinstripe, Inc., a privately held, venture backed HR and Recruitment Process Outsourcing firm serving large and mid-sized domestic clients, as well as the Global 5000. She sits on several profit and not for profit boards and is President of Competitive Wisconsin, Inc. She literally grew up in the recruiting business, as her Dad was a recruiter for Management Recruiters (now MRI). She is an evangelist for the RPO model, a thought leader and frequent speaker and can honestly be called one of the industry’s pioneers. Take it away Sue!
Mindy Blodgett: Is the increased interest in RPO due to the new realities of the financial explosion and the slow recovery?
Sue Marks: It’s certainly a big factor. What we are experiencing now is a period of relentless change. This economy compels organizations to adopt very agile structures. I think that when you dissect some of your functions into components, and are able to plug those pieces into a service delivery model, you can be more flexible and scalable – up as well down. This allows the operating cost structure to better align to the customer’s business needs. You can also respond better to market forces That is what well-designed RPO does the best – rather than being a monolithic outsourcing model that does not allow users to use the pieces they need, when they need it – a good RPO deal,provides flexible, scalable components.
Mindy Blodgett: While there is increased interest in RPO, there is also a good deal of confusion out there about what RPO means and what it does. Why is that?
Sue Marks: What we call RPO (and what I like about the term) is that it distinguishes us as firms that are reengineering the process with technology, rather than just providing volume recruiting services. Unless the combined BPO and technology piece is there, it’s not truly RPO. A lot of people confuse RPO with volume recruiting. In reality, though, I think we should be talking about HR and Talent Acquisition Service Delivery Models that are architected to be “plug and play”, or componentized, both domestically and globally. Because in today’s world of relentless change, we have to be architects of flexible, rather than one sized fits all, monolithic service delivery models.
This gets me back to the right “components” of a company’s Talent Acquisition Service Delivery Model. I think the suppliers who will be successful in this RPO space are those that have flexible modules with some capacity for customization. One size doesn’t fit every client but there has to be an effective way to customize within that service delivery platform while also retaining consistency at a high level.
Mindy Blodgett: Back to the term: RPO…should we be coming up with a better phrase or acronym?
Sue Marks: I am hearing more strategic thinking on the part of companies looking at their recruiting needs. It’s not just about “this project” and the need to get human resources support– it’s about “resourcing” and the supply chain of talent. Perhaps we could call it Human Capital Supply Chain or Talent Sourcing Supply Chain… but then you wouldn’t have RPO fitting nicely in with the other ‘O’s’.
Mindy Blodgett: What else are you thinking about these days?
Sue Marks: I’m disappointed by little process improvement has occurred in our space. Think about recruiter requisition loads … most people I talk to still have about 20 reqs per recruiter as their standard. If American manufacturing and service industries had spent the last decade with zero productivity gains, we’d be at the bottom of the global food chain. If you think about HR and look at “broadbanding” in terms of talent acquisition, that may help. You also have to look at the entire system and not just the applicant-facing pieces of it. How do you reduce demand on the system the way you reduce pressure on a call center by not having software that breaks down? We need to be working on these things.
I’m also hearing a lot of “change fatigue” from all levels of staff. The best organizations are really worried about how they can help their employees to recharge. This gets us back to the pace of relentless change: how do you help your organization regenerate now that things seem to be improving? People are also talking about the “invisible competition”, which refers to the unpredictability of competitive forces in every aspect of our profession and our business. One of our roles is to help our clients “think around the corner” to be anticipatory, rather than reactive. To get ahead of the wave, instead of being drowned by it. It’s what keeps me up at night on one hand, and keeps me excited and optimistic about our business and our future on the other.
Mindy Blodgett: Thanks so much for your time, Sue.
Sue Marks (pictured above) is Chief Executive Officer for Pinstripe. You can access her full bio here, and follow her on Twitter at @SueMarks.
If you’re an HR practitioner with recruiting responsibility, your opinion is vital for our research. Horses for Sources and HRE have teamed up to run the following survey assessing whether HR departments are using RPO, your current experiences and attitudes towards RPO, and whether you plan to explore RPO as a recruitment enabler in the future. Please click on the following link to share your views and experiences with us:
Forgive me father, for I hath missed gain-share opportunities…
While there’s a lot of puff coming from several providers, expectations are not being met when it comes to the actual achievement of innovation within many Business Process Outsourcing (BPO) engagements. Consequently, this improves the options for the first-time BPO buyer to select a provider that can demonstrate a proven track record of innovation, but what about the second-time buyer, firmly-rooted in BPO purgatory?
Our brand new survey* of 588 shared services and outsourcing executives, studying the current achievements of innovation within BPO, serves up a major does of realism to the global sourcing industry: buyers want it, but they are not working effectively with their providers to achieve it. And many buyers and providers are pointing the finger at each other. So why should we care?
Innovation is becoming a critical component when it comes to BPO
In the past, many buyers shied away from innovation because they were so laser-focused on achieving operational stability within their BPO environment. Many claimed that they would have to sacrifice meeting service levels if they tried to tinker with their processes to find new ways of achieving better outcomes. However, when we look at how those buyers with significant influence over BPO decisions are viewing innovation today, the importance being placed on innovation is distinct:
Close to half of enteprises’ operational leadership today now view the achievement of innovation as a critical component of their BPO strategy. With most providers operating within a similar price-band today, this is clearly becoming the major differentiator for the first-time BPO buyer, as we first discussed in our “New Normal in Outsourcing Delivery” study, ealier this year.
First time BPO buyers can select proven innovators, but the second-time buyers have a challenge on their hands to escape BPO purgatory
As the following data illustrates, both buyers and service providers of BPO services are equally disappointed with each others’ provision of resources and technology to meet their expectations of achieving innovation. Considering 38% of enterprise customers view innovation in BPO as critically important to their operational leadership, with a further 50% viewing it as quite important, this is becoming a major concern for the future of BPO services:
While the present disappoints, hope for future innovation is abundant
While buyers are clearly not seeing a lot of business value beyond operational delivery today, they see abundant potential for innovation in both generic processes and industry-specific domains.Major findings, which will be featured in a forthcoming HfS Research report, include the following dynamics:
More innovation has currently been achieved across industry-specific, analytics, supply chain and general accounting processes. Customer care, recruitment, payroll and management reporting are noticeably failing to meet customer expectations.
The potential to achieve innovation across many core business processes is huge. This was notably cited in industry-specific process and analytics areas, in addition to some maturing BPO domains, namely procure-to-pay, and payroll and recruitment.
Major impediments to buyers achieving innovation included unempowered governance teams, and ineffective change management and communications.
The Bottom-line: escape-plans from BPO purgatory are bring hatched, but the hard work starts now
All-in-all, an increasing majority of buyers are aware they can achieve innovation, and know the potential is there to do exactly that. Moreover, most realize the blame doesn’t always sit with their service provider – it rests with both parties to work together to a well-crafted plan that introduces innovative goals and milestones over time, that do not derail from meeting service levels that actually matter. This involves developing more partnership-oriented relationships with their service providers, increased IT-enablement of business processes, and developing gain-sharing metrics based on business outcomes.
Stay tuned for Part II, which will take a look at the specific processes where innovation is currently being achieved, and – perhaps more importantly – where their is real innovation potential in the future…
* The survey, entitled “Are you Achieving Innovation in BPO”, was conducted in May 2010 by HfS Research, in conjunction with the Shared Services and Outsourcing Network’s (SSON) network of senior finance and operations executives. It received 588 participants that encompassed senior decision-makers within buy-side enterprises, BPO service provider executives and outsourcing advisors.
For the purposes of the study, “Innovation in BPO” was defined as “the customer going beyond transactional / operational work to achieve new productivity gains and /or new revenue streams by implementing new practices through unique, creative methods.”
Whenever you mention the world “Cloud” to an experienced IT infrastructure professional, he or she will likely talk up the dreaded “S” issue as a major obstacle that will derail Cloud ever really being widely adopted across enterprise processes.
Quite simply, Cloud computing represents one of the biggest opportunities and threats to IT professionals today. However, spend some with the CTOs at the likes of eBay, Amazon, Salesfore.com etc., and their eyes will light up talking about their intense development programs, where they are training young IT talent to learn how to Cloud-enable applications that can underpin many different types of business processes.
Cutting to the chase, where industries such as IT services are rapidly commodotizing, don’t they need a new wave of innovation to drive new development, new thinking and new energy to create new levels of productivity and top-line growth into enterprises? Having business processes enabled to be provisioned on-demandin the Cloud is a massive disruptive opportunity for both providers and buyers of global business/IT services. Our forthcoming research wave on Business Process as a Service (BPaaS) is fleshing out the potential versus the reality of this happening (stay tuned).
Anyhow, we did want to get the “S” issue firmly on the table for discussion, so asked our new expert contributor, Andy Milroy, to weigh in with some of his perspective here…
Cloud Security – A Pleonasm?
The IT industry successfully generates billions of dollars each year by selling us security products and services. Security always plays a major role in any corporate IT purchasing decision. But, we are still a very long way from securing our IT environments.
Most security breaches are caused internally by employees or other authorized users of corporate systems such as contractors. It is these groups that are most likely to compromise the integrity of our systems, not external hackers. In spite of this, much more focus tends to be placed on external threats. Each time I work on a client’s site, I am struck by how easy it would be for me to compromise their systems. All I would need to do is insert a thumb drive with malicious code into a USB port and, hey presto, I’ve undermined hugely expensive security investments.
It is reckless to allow employees and contractors to carry highly sensitive data around with little consideration of the consequences of losing the laptops and smart phones that house the data. Amazingly little focus is placed on addressing this particular security threat.
Indeed, enterprises do not sufficiently focus on changing the behaviour of their users by making them aware of security policies and the reasons for those policies. Few ensure adequate control of basic access to their physical premises and to end points that form part of their network. As mentioned earlier, it also seems as though few enterprises track the location of sensitive data that physically moves around with employees and contractors.
Ensuring that everybody who accesses enterprise networks is trained to follow appropriate security policies is an extremely challenging task. For this reason, it is necessary to consider other ways of mitigating the risk of an employee or contractor from compromising security.
One way of doing this is to source as much of the enterprise’s computing resources from the cloud as possible. Managing the security of heterogeneous on-premise IT environments is a highly complex and almost impossible task. Minimising the amount of on-premise resources that a corporation manages mitigates risk associated with security breaches enormously. Ensuring that data is stored in a secure environment (in the cloud) rather than on portable devices such as laptops and smart phones also enables corporations to mitigate risk.
Cloud computing, and I mean public cloud computing, allows us to mitigate risk and in many cases offer greater security that can be provided by spending millions of dollars in an attempt to secure on-premise resources.
Multitenancy and virtualization do indeed add a lot of complexity to providing levels of security that many enterprises require. However, public cloud services providers such as Google, Amazon, Microsoft and Salesforce.com focus heavily on ensuring that their datacenters follow best practice security policies and are using the most up to date security tools. Security can also be tied into service levels.
So, using public cloud services can offer more security than keeping data and other computing resources on-premise. These services can also reduce the amount spent on security massively. Perhaps this is the reason why many in the IT industry are keen to dissuade us from using cloud computing.
Andy Milroy
Security is always a challenge. But, there is little evidence to suggest that using the public cloud is less secure than the traditional on-premise form of computing. In fact, there is more evidence to suggest that using public cloud services can, in many cases, mitigate security risks that exist with on- premise computing alternatives.
The cloud model of computing is much better positioned to address today’s security challenges and concerns than alternative models. So, will the term cloud security soon be considered to be a pleonasm?
Andy Milroy, pictured here, is Expert Contributor for Horses for Sources Research. You can access his bio here. He likes to be tweeted at @andy1994
We’re delighted to announce two new experts who will be adding their tuppence to the HfS agenda.
As part of our new research alliance with EquaTerra, Stan Lepeak will be contributing on a broad array of global IT and business process areas (view Stan’s bio here). Stan leads global research for EquaTerra.
In addition, Andy Milroy, already famous for his recent blog contributions (see here and here) joins us to add his spin on Asia/Pacific IT and BPO dynamics. Andy currently leads Frost & Sullivan’s Australia and New Zealand ICT Practice (view Andy’s bio here).
Due to unprecedented demand for research, (plus the fact we’re kinda new and trying to do some), we’re actively looking to bring on some additional analyst talent.
If you have some excellent experience in global sourcing, love to write, have an opinion and a bit of an attitude, we’d love to hear from you, whether it be as a contributor or full-time analyst.
Drop us an email if you’d like to be considered. All resume submissions will be treated with the utmost discretion.
