Risks in IT/IS change

by florenzie
Wednesday, September 30, 2009
Concerning on the Assignment 2 that talks about the risks on IS/IT change, we considered the Sky Cable as our adopted organization.

Every organization has a mission. In this digital era, as organizations use automated information technology (IT) systems1 to process their information for better support of their missions, risk management plays a critical role in protecting an organization’s information assets, and therefore its mission, from IT-related risk. An effective risk management process is an important component of a successful IT security program. The principal goal of an organization’s risk management process should be to protect the organization and its ability to perform their mission, not just its IT assets. Therefore, the risk management process should not be treated primarily as a technical function carried out by the IT experts who operate and manage the IT system, but as an essential management function of the organization.

SkyCable is a direct-to-home cable TV and subscription service, established by the Lopez Group of Companies and Central CATV Group Of Companies. It is one of several sister companies of ABS-CBN. SkyCable offers a range of analog and digital Cable Television services, and also offers high-speed Internet services and VOiP services.
SkyCable was established in January 1990. Commercial cable operations commenced on January 6, 1992. By the end of the year, 8,500 strand miles of cable were laid out, bringing in 20,000 subscribers by 1995.

Today, over 500,000 subscribers have made SkyCable the number one cable TV service provider in the Philippines. It has grown to feature the best and most varied cable programs for the whole family.

The success of SkyCable throughout the years enabled the business to expand and go beyond just providing postpaid cable TV service. In 2006, the first ever prepaid cable TV service inh the country was introduced, SkyCable Silver Prepaid. In 2008, SKYBROADBAND, the fastest residential broadband internet service in the land, and SKYVOICE, the lowest-prepaid IDD calling service, were launched.

This foray into innovative information and communication services created the need for the company to evolve its name into something much bigger.

The IT personnel of SkyCable pointed-out some of the risk on associated on IS/IT change and the following are:

New technology, less employees

- Technological advancements brought many advantages, one of which is that it can minimize manpower. This means that as the new trends technology arises, manual works are shortened. Therefore, as we embrace the latest trend in technology it can decrease the number of employees in the company because all the transactions are computerized, it will lessen the paper works and hustle free.

Security of data

- this is associated with the susceptibility of data in the system. Threats of intrusions and other risk associated with the evolution of credible threats

Migrating of Operating System

- These days the most common OS that we have encountered in the Windows Operating System. Since most of the OS in SkyCable are exercising Linux which is a full-fledged operating system, many of the employees find a hard time in manipulating the computer. So, a thorough trainings and seminars must be conducted to fully aware the end-users to manipulate their system.

Reliability and efficiency of the system

- Certainly, when a new system is implemented, the reliability of the system is not well tested. Some bugs might occur that will make an obstacle in the midst of their business transactions. In connection with this, the efficiency of the system is not excellent. It will affect the business flows of the organization since it controls the information.

Competition

- In a business regime, we cannot hide the fact that competition is present. According to the IT personnel of SkyCable, when there is new system installed in the company the employees try there best to adopt immediately the last trend. Since, it is mandatory to have awareness on their system. The administration gives incentives to those whose can assimilate the system and it also might lead to the promotion of his/her position. On the other hand, the employees who cannot comprehend easily will be assigned to different manual works.

Rejection to the staff

- Apparently, not all the employees have the edge on technology. When a new-fangled technology will crop up some of the employees must be fired and the company will hire a new one which has the knowledge of the existing technology. So, it is a threat to the employees especially to the IT personnel’s of the company. They must be updated with the latest trend and they must know how to use it.

Cost

- As a new technology will come in our way, we cannot rebuff that financial factor must be considered. The organization must understand what they really need and not what they want.

System Failure

- A system failure can occur because of a hardware failure or a severe software issue. Commonly, a system failure will cause the system to freeze, reboot, and/or stop functioning altogether.



“Nothing is constant except change”

In most organizations, the network itself will continually be expanded and updated, its components changed, and its software applications replaced or updated with newer versions. In addition, personnel changes will occur and security policies are likely to change over time. These changes mean that new risks will surface and risks previously mitigated may again become a concern. Thus, the risk management process is ongoing and evolving.

Shifting the information system of a particular organization should undertake a profound and systematic analysis on how will it be beneficial to the success of their organization.

Change is inevitable; the organization must have to undergo several changes in the Information System as a whole. As new technology arises there is a need to embrace and cope-up with it. There is a need to upgrade programs and systems and the organization must take the risk in order to be victorious. an appropriate decision-making must be done to give solutions to the existing problem of the organization.

KEYS FOR SUCCESS

A successful risk management program will rely on (1) senior management’s commitment; (2) the full support and participation of the IT team (see Section 2.3); (3) the competence of the risk assessment team, which must have the expertise to apply the risk assessment methodology to a specific site and system, identify mission risks, and provide cost-effective safeguards that meet the needs of the organization; (4) the awareness and cooperation of members of the user community, who must follow procedures and comply with the implemented controls to safeguard the mission of their organization; and (5) an ongoing evaluation and assessment of the IT-related mission risks.

References: http://en.wikipedia.org/wiki/SkyCable
http://csrc.nist.gov/publications/nistpubs/800-30/sp800-30.pdf
http://www.computerhope.com/jargon/s/systemfa.htm

Outsourcing vs. Insourcing: What's best for your Organization?

by florenzie
Wednesday, September 2, 2009
As a student, I am privileged to be invited by the Dean of the Institute of Computing to take my stand concerning on information systems planning specifically on outsourcing and in sourcing issues.

Basically I would start to make a distinction between outsourcing and in sourcing and specify the advantages and disadvantages it entails. Below are the necessary information’s that is essential for the better understanding of the two issues so that we can arrive to a better alternative.

Shocked Exclamation WHAT IS OUTSOURCING?

Outsourcing is subcontracting a process, such as product design or manufacturing, to a third-party company. The decision to outsource is often made in the interest of lowering cost or making better use of time and energy costs, redirecting or conserving energy directed at the competencies of a particular business, or to make more efficient use of land, labor, capital, (information) technology and resources.


Outsourcing became part of the business lexicon during the 1980s. It began in the early eighties when organizations started delegating their non-core functions to an external organization that was specialized in providing a particular service, function or product. In outsourcing, the external organization would take on the management of the outsourced function.

Idea alien The 2 sense of outsourcing

Moreover, it is essentially a division of labour. Out sourcing in the information technology field has two meanings: one is to commission the development of an application to another organization, usually a company that specializes in the development of this type of application.

The other is to hire the services of another company to manage all or parts of the services that otherwise would be rendered by an IT unit of the organization. The latter concept might not include development of new applications.

Arrow Its process. . .

Outsourcing involves the transfer of the management and/or day-to-day execution of an entire business function to an external service provider. The client organization and the supplier enter into a contractual agreement that defines the transferred services. Under the agreement the supplier acquires the means of production in the form of a transfer of people, assets and other resources from the client. The client agrees to procure the services from the supplier for the term of the contract.

Business segments typically outsourced include information technology, human resources, facilities, real estate management, and accounting. Many companies also outsource customer support and call center functions like telemarketing, CAD drafting, customer service, market research, manufacturing, designing, web development, print-to-mail, content writing, ghost-writing and engineering. Offshoring is the type of outsourcing in which the buyer organization belongs to another country.


Arrow Peculiarity between Outsourcing and Offshoring

Outsourcing and offshoring are used interchangeably in public discourse despite important technical differences. Outsourcing involves contracting with a supplier, which may or may not involve some degree of offshoring. Offshoring is the transfer of an organizational function to another country, regardless of whether the work is outsourced or stays within the same corporation/company.

With increasing globalization of outsourcing companies, the distinction between outsourcing and offshoring will become less clear over time. This is evident in the increasing presence of Indian outsourcing companies in the United States and United Kingdom. The globalization of outsourcing operating models has resulted in new terms such as nearshoring, noshoring, and rightshoring that reflect the changing mix of locations. This is seen in the opening of offices and operations centers by Indian companies in the U.S. and UK. A major job that is being outsourced is accounting. They are able to complete tax returns across seas for people in America

Arrow The Benefits of Outsourcing

• Do you want to maximize your revenue and minimize your expenses?
• Do you want to get access to specialized skills and services?
• Do you want to concentrate more on your core business?
• Do you want to save on money, time and infrastructure?


If your answer is yes to any or all of the above questions, you might be interested in outsourcing.

Moreover, organizations who are interested in outsourcing are often curious to know more about advantages and disadvantages of offshoring. By gaining insight about both the good and bad of outsourcing, organizations can decide if outsourcing is right for them. Most organization jump headlong into outsourcing, without actually finding out if outsourcing is good for their business. Before outsourcing, ensure that you are aware about the pros and cons of outsourcing.

The advantages and disadvantages of outsourcing can help your organization decide if outsourcing is right for your business. The following is a list of the advantages and disadvantages of outsourcing:

Mad Laughing The Edge of Outsourcing

• Outsourcing your non-core activities will give you more time to concentrate on your core business processes

• Offshoring can give you access to professional, expert and high-quality services

• With outsourcing your organization can experience increased efficiency and productivity in non-core business processes

• Outsourcing can help you streamline your business operations

• Offshore outsourcing can help you save on time, effort, manpower, operating costs and training costs amongst others

• Outsourcing can make your organization more flexible to change

• You can experience an increased control of your business with outsourcing

• Your organization can save on investing in the latest technology, software and infrastructure as your outsourcing partner would be investing in these

• Outsourcing can give you assurance that your business processes are being carried out efficiently, proficiently and within a fast turnaround time

• Offshoring can help your organization save on capital expenditures

• By outsourcing, your company can save on management problems as your offshore partner will be managing the team who does your work

• By outsourcing, you can cater to the new and challenging demands of your customers

• Outsourcing can help your organization to free up its cash flow

• Sharing your business risks is possible with outsourcing

• Outsourcing can give your business a competitive advantage as you will be able to increase productivity in all the areas of your business

• Outsourcing can help your organization to cut is operational costs to more than half
If you want your organization to stay ahead of competition, concentrate on core competencies and make use of the latest technologies, then outsourcing can help your organization achieve all this and more. In outsourcing, the advantages of outsourcing are more than the disadvantages of outsourcing. The pros of outsourcing have driven more organization to step into offshoring and experience the benefits that it has to offer.

Laughing Mad The Drawback of Outsourcing

• At times, it is more cost-effective to conduct a particular business process, rather than outsourcing it

• While outsourcing services such as payroll processing services and tax preparation services, your outsourcing provider will be able to see your company’s confidential information and hence there is a threat to security and confidentiality in outsourcing

• When you begin to outsource your business processes, you might find it difficult to manage the offshore provider when compared to managing processes within your organization

• Offshoring can create potential redundancies for your organization

• In case, your offshore service provider becomes bankrupt or goes out of business, your organization will have to immediately move your business processes in-house or find another outsourcing provider

• The employees in your organization might not like the idea of you outsourcing your processes and they might express lack of interest or lack of quality at work

• Your outsourcing provider might not be only providing services for your organization. Since your provider might be catering to the needs of several companies, there might be not be complete devotion to you and your company

• By outsourcing, you might forget to cater to the needs of your valuable customers as your focus will be on the business process that is outsourced

• In outsourcing, you may lose your control over the process that is outsourced

• Outsourcing, though cost-effective, might have hidden costs, such as the legal costs incurred while signing a contract between companies. You might also have to spend a lot of time and effort in getting the contract signed

• With outsourcing, your organization might suffer from a lack of customer focus

• There can be several disadvantages in outsourcing, such as, renewing contracts, misunderstanding of the contract, lack of communication, poor quality and delayed services amongst others.

The disadvantages of offshoring give organizations an opportunity to think about what they are stepping into. However the disadvantages of outsourcing are less than the advantages of offshore outsourcing. When outsourcing, you might not experience any of these disadvantages of offshoring, if you find a reliable outsourcing partner. Before outsourcing take the interests of your customers and employees into consideration and then make an informed decision. If your organization is genuinely interested in outsourcing, let not the disadvantages of outsourcing stop you.

Razz Embarassed Outsourcing: A public demand

Most organizations choose outsourcing because outsourcing offers a lot of advantages. When organizations outsource to countries like India, they benefit from lower costs and high-quality services. Moreover organizations can concentrate more on core functions once they outsource their non-core functions. Outsourcing can also help organizations make better use of their resources, time and infrastructure.

In outsourcing, the outsourcer and the outsourcing partner have a greater relationship when compared to the relationship between a buyer and a seller. In outsourcing, the outsourcer trusts the outsourcing partner with vital information. Outsourcing is no longer confined to the outsourcing of IT services. Outsourcers in the US and UK now outsource financial services, engineering services, creative services, data entry services and much more.

Most organizations are opting to outsource because outsourcing enables organizations to access intellectual capital, focus on core competencies, shorten the delivery cycle time and reduce costs significantly. Organizations feel outsourcing is an effective business strategy to help improve their business.

To meet the today's complex challenges, more enterprises choose to refocus on their core business activities. And one way to do this is by outsourcing non-core business functions to acknowledged experts. In simple terms, outsourcing is the transfer of delivery responsibility for certain functions to an external organization. The client still retains control over these functions, but would ask an outsourcing company to get the job done at the proper service levels and within cost and time budgets.

Exclamation Idea Arrow WHAT IS INSOURCING?

The opposite of outsourcing can be defined as insourcing. When an organization delegates its work to another entity, which is internal yet not a part of the organization, it is termed as insourcing. Insourcing is a business practice in which work that would otherwise have been contracted out is performed in house. The internal entity will usually have a specialized team who will be proficient in the providing the required services.

Insourcing is a business decision that is often made to maintain control of critical production or competencies. An alternate use of the term implies transferring jobs to within the country where the term is used, either by hiring local subcontractors or building a facility.Insourcing is widely used in an area such as production to reduce costs of taxes, labor (e.g., American labor is often cheaper than European labor), transportation, etc.

Insourcing often involves bringing in specialists to fill temporary needs or training existing personnel to perform tasks that would otherwise have been outsourced.

An example is the use of in-house engineers to write technical manuals for equipment they have designed, rather than sending the work to an outside technical writing firm.

In this example, the engineers might have to take technical writing courses at a local college, university, or trade school before being able to complete the task successfully. Other challenges of insourcing include the possible purchase of additional hardware and/or software that is scalable and energy-efficient enough to deliver an adequate return on investment.

Organizations sometimes opt for insourcing because it enables them to maintain a better control of what they outsource. Insourcing has also come to be defined as transferring work from one organization to another organization which is located within the same country. Insourcing can also mean an organization building a new business centre or facility which would specialize in a particular service or product.
Rolling Eyes Insourcing as Outsourcing

Insourcing can be viewed as outsourcing as seen from the opposite side. For example, a company based in Japan might open a plant in the United States for the purpose of employing American workers to manufacture Japanese products. From the Japanese perspective this is outsourcing, but from the American perspective it is insourcing. Nissan, a Japanese automobile manufacturer, has in fact done this.


Rolling Eyes Insourcing: A response to diminish finances

Organizations involved in production usually opt for insourcing in order to cut down the cost of labor and taxes amongst others. The trend towards insourcing has increased since the year 2006. Organizations who have been dissatisfied with outsourcing have moved towards insourcing. Some organizations feel that they can have better customer support and better control over the work outsourced by insourcing their work rather than outsourcing it.

According to recent studies, there is more wok insourced than outsourced in the U.S and U.K. These countries are currently the largest outsourcers in the world. The U.S and U.K outsource and insource work equally.

Rolling Eyes Insourcing: Exercised by modern countries

According to PR Web, insourcing was becoming more common by 2006 as businesses had less than satisfactory experiences with outsourcing (including customer support). Many outsourcing proponents responded to a negative consumer opinion backlash resulting from outsourcing their communications management to vendors who rely on overseas operations.

To those who are concerned that nations may be losing a net amount of jobs due to outsourcing, some point out that insourcing also occurs.

According to a study by Mary Amiti and Shang-Jin Wei, in the United States, the United Kingdom, and many other industrialized countries more jobs are insourced than outsourced. They found that out of all the countries in the world they studied, the U.S. and the U.K. actually have the largest net trade surpluses in business services. Countries with a net deficit in business services include Indonesia, Germany and Ireland.

Insourcing is loosely referred in call centres that are doing the work of the outsourcing companies. Companies that outsource include Dell, Hewlett Packard, Symantec, and Linksys.

The call centres and technicians that are contracted to handle the outsourced work are usually over-seas. Customers may refer to these countries as "India" technical support if they are hard to understand over telecommunications.

These insourcing companies were a great way to save money for the outsourcing of work, but quality varies, and poor performance has sometimes harmed the reputations of companies who provide 24/7 customer/technical support.


bounce pale RECOMMENDATIONS:

What is best for your organization?

Outsourcing and Insourcing may be beneficial and would be useless depending on the situation that we are now facing. Primarily, we must know what our university needs before arriving in a conclusion and implement necessary actions for the improvement and benefit of our academe.

If the organization has a number of non-core processes which are taking plenty of time, effort and resources to perform in-house, it would be wise to outsource these non-core functions. Outsourcing in this case, would help you save on time, effort, manpower and would also aid you in making quicker deliveries to your customers.

If it requires expertise services in areas which do not fall under your core competency, then outsourcing will be a good option as you can get access to expertise services. For reducing costs and making faster deliverables, outsourcing is again a good option.

If the work involves production, then it would be more ideal for your organization to opt for insourcing, as you can save on transportation costs and exercise a better control over your project.

It is not necessary to choose outsourcing over insourcing or vice versa. Your organization can outsource and insource at the same time. By outsourcing and insourcing simultaneously, you can have the best of what both offers and your business can get a competitive advantage!

Furthermore, the university must take into the considerations on the things that would be useful for the institution. There are some reasons to outsource and insource depending on the needs of the organization. Moreover, I have found some points to ponder in the virtual library pertaining to the reasons on why we should outsource, and these are:

cyclops Reasons for outsourcing

Organizations that outsource are seeking to realize benefits or address the following issues:

• Cost savings. The lowering of the overall cost of the service to the business. This will involve reducing the scope, defining quality levels, re-pricing, re-negotiation, cost re-structuring. Access to lower cost economies through offshoring called "labor arbitrage" generated by the wage gap between industrialized and developing nations.

• Focus on Core Business. Resources (for example investment, people, and infrastructure) are focused on developing the core business. For example often organizations outsource their IT support to specilaised IT services companies.

• Cost restructuring. Operating leverage is a measure that compares fixed costs to variable costs. Outsourcing changes the balance of this ratio by offering a move from fixed to variable cost and also by making variable costs more predictable.

• Improve quality. Achieve a step change in quality through contracting out the service with a new service level agreement.

• Knowledge. Access to intellectual property and wider experience and knowledge.

• Contract. Services will be provided to a legally binding contract with financial penalties and legal redress. This is not the case with internal services.

• Operational expertise. Access to operational best practice that would be too difficult or time consuming to develop in-house.

• Access to talent. Access to a larger talent pool and a sustainable source of skills, in particular in science and engineering.

• Capacity management. An improved method of capacity management of services and technology where the risk in providing the excess capacity is borne by the supplier.

• Catalyst for change. An organization can use an outsourcing agreement as a catalyst for major step change that can not be achieved alone. The outsourcer becomes a Change agent in the process.

• Enhance capacity for innovation. Companies increasingly use external knowledge service providers to supplement limited in-house capacity for product innovation.

• Reduce time to market. The acceleration of the development or production of a product through the additional capability brought by the supplier.

• Commodification. The trend of standardizing business processes, IT Services and application services enabling businesses to intelligently buy at the right price. Allows a wide range of businesses access to services previously only available to large corporations.

• Risk management. An approach to risk management for some types of risks is to partner with an outsourcer who is better able to provide the mitigation.

• Venture Capital. Some countries match government funds venture capital with private venture capital for startups that start businesses in their country.

• Tax Benefit. Countries offer tax incentives to move manufacturing operations to counter high corporate taxes within another country.

That would be all for my part as a student of the university. The final verdict must still be on the administration. It’s up to them to apply outsourcing and insourcing.

References:

www.businessweek.com/magazine/content/06_05/b3969401.htm
http://whatis.techtarget.com/definition/0,,sid9_gci1185946,00.htmlhttp://www.outsource2india.com/why_india/articles/outsourcing-versus-insourcing.asp
http://www.businessweek.com/globalbiz/blog/eyeonasia/archives/2009/05/philippines_it.html
http://en.wikipedia.org/wiki/Outsourcing
http://www.outsourceit2philippines.com/
http://en.wikipedia.org/wiki/Insourcing
http://whatis.techtarget.com/definition/0,,sid9_gci1185946,00.html
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