MIS 524, Assignment 41 Is Outsourcing IT Like Giving the Store Away?

MIS 524, Assignment 42 Agenda Outsourcing(from Chapter 7) Soft Asset Trend Security (from Chapter 6) Security and Assets Effects of Outsourcing on Security

MIS 524, Assignment 43 CHANGING RELATIONSHIPS: Hard/Owned/Proprietary Soft/Rented/Shared Developed by business itself to meet strategic needs Created unique standards that led to mismatches, confusion Lack of interoperability Operators were locked into specific technologies and technology providers Can use others’ infrastructure Common standards mean easy sharing with customers and partners and common interfaces Interoperable (TCP/IP) with cheap software Not locked in; competition reigns among providers; innovation rages; prices drift ever lower Yeah, but what’s the UPside? Yeah, but what’s the DOWNside?

MIS 524, Assignment 44 Access Benefits Don’t need so many IT workers Reduced time to market (no infrastructure to develop or acquire) 24x7 Better cash flow profiles (Figure 7.1) Lowered IT costs and risks (shared) Global access to applications

MIS 524, Assignment 45 Incremental Outsourcing: General Considerations “Strategic” ? Yes Internal No Reliable? Low Cost? No Internal Yes Outsource How shall we handle this system or application? Hmmm. Is it… But this is GREATLY simplified!

MIS 524, Assignment 46 Incremental Outsourcing: More Specific Considerations System Maturity Competitive Role IS Dept. Capability Initiation Low Weak Growth High Average Mature Sustainably Superior High Stage of Application or System or Business: Early stages are riskier since Revenue drivers could be threatened Don’t outsource strategic or competitive systems Ascertain skills market; your IS Dept. may well be capable of insourcing

MIS 524, Assignment 47 Selecting Service Partners SELECTION Description (Size, plans) Whom are we dealing with? Financial Do they have enough resources? Proposal (Plan) How are they proposing to deliver services to us? Service Guarantees What level of service will we get? Risk Management What risks are we exposed to and how will they be mitigated? Pricing Structure What do we pay for certain levels of service?

MIS 524, Assignment 48 Legacies? Technology problems; inherent incompatibilities Residual process complexity; old patches, old solutions, new problems Local adaptations, narrow vision Nonstandard data definition, formats, displays Organizational legacies; implications of older technology, loyalties

MIS 524, Assignment 49 The Hard and the Soft Industrial Paradigm Networked Paradigm Hard goods and products Hard-wired relationships Hard designs Hard production assets Hard and soft goods and products Malleable, flexible relationships Software-based, data- sensitive designs Hard and soft production assets

MIS 524, Assignment 410 The Trend towards Soft Assets Moving towards shared or rented assets Assets now seen as “non-performing” unless employed effectively Soft assets are rented “by the minute” and are governed by contract as well as by specification Soft assets defer technical problems to the supplier but accentuate management role IT makes managing soft assets easier

MIS 524, Assignment 411 Defending Security Policies (before the fact) Firewalls (during the fact) Authentication (during the act) Encryption (during the act) Patching and Change Management Intrusion Detection (after the fact)

MIS 524, Assignment 412 Security Management Make Deliberate Security Decisions Consider Security a Moving Target Practice Disciplined Change Management Educate Users Deploy Multilevel Technical Measures

MIS 524, Assignment 413 Risk Management First Classify Risks Low Probability HighLow Consequences High Minor Threats Critical Threats Problematic Threats

MIS 524, Assignment 414 General Risk Model Threat Awareness, Assessment Avoidance, Deterence Threat has effects Defence Resistance Effects have Implications Recovery Retaliation Reassessment

MIS 524, Assignment 415 Increased dependence on technology increases insecurity about security Intelligent IS risk management means being aware of all problems and responses IS has security implications that are not always immediately apparent One pays for security The Situation with Security

MIS 524, Assignment 416 If done intelligently according to strategic plan, outsourcing IT should pose no new security risks But firms who outsource to reduce their involvement with IT must remain aware of vendor’s security arrangements There are economies of scale, but not for critical operations You pay for what you get. If your business’s IT is enough of a commodity to outsource, it’s probably worthless; conversely, the security problems abound. Outsourcing and Security