Industry news

The rise of India and Asia is underlined this week by the publication of the 2008 Global Outsourcing 100 rankings, by the International Association of Outsourcing Professionals (IAOP).

The chart features 20 Indian firms, five of them being in the top ten: Infosys (ranked 3), TCS (6), Wipro (7), Genpact (9) and Tech Mahindra (10). Accenture is on the top slot and IBM comes in second.

Other Indian companies placed in the 2008 list are HCL Technology (11) Mastek (16), WNS Global Services (19), Hexaware (22), ExlService (26), 24/7 Customer (28), Cambridge (36), ITC Infotech (40), KPIT Cummins (42), Patni (46), Zensar (53), MindTree (54), Mphasis (56), Aditya Birla Minacs (62), FirstSource Solutions (73) and VCustomer (84). Good management figures strongly in Indian companies' selections.

In last year's list, there were five Indian firms in the top 10: Wipro, Infosys, Genpact, Tech Mahindra and Cambridge.

China's hiSoft Technology International broke into the top 20 this year (at 20), after steadily climbing the rankings in previous years.

The full chart rundown is as follows, complete with the reason for each selection and ranking: 1/ Accenture Customer testimonials 2/ IBM Size and growth 3/ Infosys Technologies Executive leadership 4/ Sodexo Global presence 5/ Capgemini Achievement recognition 6/ Tata Consultancy Services Employee management 7/ Wipro Technologies Employee management 8/ Hewlett-Packard Outsourcing experience 9/ Genpact Executive leadership 10/ Tech Mahindra Outsourcing experience 11/ HCL Technologies Outsourcing experience 12/ EDS Outsourcing experience 13/ ACS Balanced performance 14/ CGI Group Customer testimonials 15/ HOV Services Outsourcing experience 16/ Mastek Customer testimonials 17/ SPi Customer testimonials 18/ Colliers International Global presence 19/ WNS Global Services Achievement recognition 20/ hiSoft Technology International Employee management 21/ SITEL Balanced performance 22/ Hexaware Technologies Competency certification 23/ CSC Outsourcing experience 24/ Unisys Competency certification 25/ ARAMARK Size and growth 26/ ExlService Holdings Achievement recognition 27/ Cognizant Technology Solutions Competency certification 28/ 24/7 CUSTOMER Employee management 29/ CB Richard Ellis Global presence 30/ EMCOR Group No. of locations/centres 31/ ISS Facility Services Balanced performance 32/ Syntel Employee management 33/ Headstrong Balanced performance 34/ Sutherland Global Services Employee management 35/ Neusoft Group Achievement recognition 36/ Cambridge Solutions Size and growth 37/ EPAM Systems Outsourcing experience 38/ Inspur Balanced performance 39/ Ocwen Financial Customer testimonials 40/ ITC Infotech Competency certification 41/ Océ Business Services Customer testimonials 42/ KPIT Cummins Infosystems Competency certification 43/ Amdocs Balanced performance 44/ Vertex Balanced performance 45/ Donlen Employee management 46/ Patni Computer Systems Balanced performance 47/ Diebold Global presence 48/ NCS Competency certification 49/ Pitney Bowes Balanced performance 50/ ADP Balanced performance 51/ Outsource Partners International Achievement recognition 52/ Advanced Technology Services Achievement recognition 53/ Zensar Technologies Balanced performance 54/ MindTree Consulting Achievement recognition 55/ Johnson Controls Global presence 56/ MphasiS Competency certification 57/ Convergys Achievement recognition 58/ Cushman & Wakefield Global presence 59/ Luxoft Achievement recognition 60/ Ceridian Achievement recognition 61/ Xerox Employee management 62/ Aditya Birla Minacs Size and growth 63/ ICG Commerce Executive leadership 64/ Stream Balanced performance 65/ Comprehensive Health Services Employee management 66/ Eclipsys Executive leadership 67/ IBA Group Employee management 68/ LogicaCMG plc Outsourcing experience 69/ ExcellerateHRO Achievement recognition 70/ SNC-Lavalin Profac No. of locations/centres 71/ Cartus Employee management 72/ KPN/Getronics Outsourcing experience 73/ Firstsource Solutions Balanced performance 74/ IPT Balanced performance 75 (equal)/ Hewitt Associates Achievement recognition NCR Balanced performance 76/ Summit HR Worldwide Achievement recognition 77/ Bleum Competency certification 78/ Cross-Tab Marketing Services Customer testimonials 79/ Cybage Software pvt Outsourcing experience 80/ Beyondsoft Customer testimonials 81/ LawScribe Balanced performance 82/ MERA Networks Executive leadership 83/ Intetics Employee management 84/ vCustomer Competency certification 85/ Smart Sourcing Customer Testimonials 86/ Datrose Employee management 87/ Ci&T Software Competency certification 88/ Achievo Executive leadership 89/ IST Management Services No. of locations/centres 90/ Auriga Balanced performance 91/ QuEST Achievement recognition 92/ CompuPacific International Customer testimonials 93/ DataArt Achievement recognition 94/ Emerio GlobeSoft Pte Global presence 95/ Symphony House Berhad Achievement recognition 96/ Objectiva Software Solutions Balanced performance 97/ Freeborders Achievement recognition 98/ Hundsun Global No. of locations/centres 99/ Mindcrest Balanced performance 100/ Innodata Isogen Achievement recognition

IT and BPO services company Cognizant Technology Solutions Corporation has joined a host of outsourcing companies enjoying positive results. The company has announced record Q1 revenues, for the quarter ending March 31, 2008.

Revenues for the first quarter increased to $643.1 million, up 7.2% from $600.0 million in the fourth quarter of 2007, and up 40% from $460.3 million in the first quarter of 2007. GAAP net income was $101.9 million, or $0.34 per diluted share, compared to $75.4 million, or $0.25 per diluted share, in the first quarter of 2007. GAAP operating margin for the quarter was 17.4%.

"We are pleased with this quarter, during which we have surpassed our growth targets. The quarter's results, achieved despite the increased economic uncertainty and challenges in the financial services industry, testify to the resilience of our business model which is diversified across business segments, service offerings and geographic regions,” said Francisco D’Souza, Cognizant president and CEO. “Our healthcare, retail/manufacturing/logistics and other segments all demonstrated sequential growth of approximately 10% or greater, and Europe continued to grow well in excess of company average, growing 12% sequentially during the quarter.”

“We have adopted a more cautious view for the remainder of the year to reflect the heightened economic challenges over the past two months," he continued. "However, we believe that the current environment also presents us with opportunities to help clients in industries such as financial services, healthcare and media adapt to the structural changes that are transforming their industries. "In addition, our clients are also seeking cost rationalization solutions in order to compensate for the pressures on their businesses. The investments we’ve made in broadening our service offerings, building deep domain expertise and advanced consulting and analytics capabilities position us well to capitalize on these needs.”

Based on current visibility, the Company is now providing the following guidance: Second quarter 2008 revenue anticipated to be at least $680 million; Q2 2008 diluted EPS expected to be $0.34 to $0.35 on a GAAP basis, and $0.38 to $0.39 on a non-GAAP basis, which excludes $0.04 of estimated stock-based compensation and stock-based Indian fringe benefit tax expense. Fiscal 2008 revenue is anticipated to be approximately $2.95 billion, up approximately 38% compared to 2007.

"We continue to invest across our industries, service-areas and geographies in order to address client needs, enhance our market position, continue to grow and deliver value for shareholders," said CFO Gordon Coburn.

“While keeping these goals in mind, we plan to increase resource utilisation throughout 2008 in order to optimize efficiency and quality and help us remain flexible within the current environment. As we look ahead, we remain confident that despite near-term challenges in the economy, our strategy and execution excellence will ensure that Cognizant’s growth continues to outpace the industry.”

"Our performance is a result of the diversification of our business across multiple industries and geographies," continued D'Souza. "We continue to see demand for our services across a range of industries, geographic markets and solution offerings. We experienced strong performance in the health care sector, which grew 45% year-over-year and 10% sequentially.

"Manufacturing, retail and logistics which grew 40% year-over-year and over 12% sequentially and our other segment which includes communication, information, media and entertainment and technology business areas which grew 11% sequentially and 41% year-over-year.

"And despite turmoil in the financial markets during the quarter, our financial services sector showed growth of three percent sequentially and 37% year-over-year.

"Geographically, Europe continued the strong trend we've seen for several quarters growing 87% year-over-year and 12% sequentially and comprised 19% of our revenues, compared to 14% of our revenues in the first quarter of 2007. It is worth noting there are significant growth in Europe, five full percentage points of total company revenues over a one year period is the result of our focused efforts to increase our presence in this geography."

The rising number of European companies offering human resources outsourcing (HRO) services with attractive service bundles and competitive price points are stealing market share away from HRO suppliers in the United States and elsewhere, according to an Everest Research Institute study of the European HRO market.

Since 2005, European HR outsourcing suppliers have gained 10 percent of the global market, currently hold 30 percent of it, and these numbers will likely continue to increase to meet rising demand in a market that hasn’t been significantly penetrated, according to Institute analysts. The Institute will hold a Webinar, European HRO Market: A Laggard or an Emerging Frontier?, on May 14 at 9 a.m. CDT to present study findings and insights.

While the global market continues to grow at a decelerated rate (15 percent CAGR from 2006-2007 compared to 22 percent from 2003-2005) and the overall number of transactions declined from 2006 to 2007, most of the global transactions occurred in Europe, a strong indicator of buyer maturity, according to Everest’s Pan-European HRO Market report. Annual revenues for HRO transactions originating in Europe reached almost US $750 million in 2007.

”Market penetration across all sectors is low; therefore, we expect to see continued HRO growth in Europe as buyers increasingly realize they must consider outsourcing to remain competitive in a global world,” said Monica Barron, VP research, Everest Research Institute. “Buyers are looking beyond cost savings and are very focused on effectively managing cross-country talent. With the entry of new ‘payroll-led’ and ‘offshore-led’ multi-process HRO suppliers, buyers have more choices and are no longer restricting themselves to ‘brand shopping’ the big-name global suppliers.”

Other highlights of the report include: • The United Kingdom continues to claim a large share of the HRO European market in terms of deal origination and employees covered, holding 56 percent of all European transactions and 82 percent of total contract value.

• West Europe is an emerging market within Europe with different sub-regions having different HRO potential.

• Central and Eastern European locations have become an integral part of supplier strategies to deliver HRO services in Europe, serving as HRO hubs to support European operations.

• Manufacturing, government, and telecom dominate European HRO buyer industries.

• The most transaction activity is with companies employing 15,000 or more employees, and 55 percent of these engagements are global or regional.

• In terms of transaction activity, Accenture, ADP and Northgate ARINSO signed 54 percent of them.

• Accenture and ExcellerateHRO are the current market leaders based upon the Institute’s data; however, buyers have more choices as existing suppliers, including Europe-centric Logica, Capita and Steria, solidify their HRO offerings and offshore-led suppliers, including Caliber Point, TCS, and Wipro, enter the HRO market.

French outsourcing group Capgemini has reported flat Q1 results, impacted by the weak dollar, according to the company. Year-on-year Q1 revenues saw a slight dip from the first quarter 2007 at €2.19bn (£1.7bn) compared with €2.21bn a year ago.

With the US and UK accounting for 41% of the company's total revenues, the decline of the dollar, and of the pound against the euro, have combined to hit the company.

UK revenues fell 4.5 percent, partly linked to the curtailment of Capgemini’s contract with HMRC.

Capgemini confirmed its targets for full-year revenue growth of between 2-5 percent at constant exchange rates.

Although the company is comparatively well positioned among the roster of European outsourcing talent, it is more exposed to the weak dollar and to the pound's weakness against the euro than its Asian rivals, who will be circling for a European buy. That said Asian sales recorded a slight increase.

Sequential growth from Q4 2007 was negative across the board by single digits.

The company said that outsourcing revenue growth stood at a comparatively healthy 3.7% year on year. Manufacturing, retail and distribution remains the largest segment of the company's overall business, growing slightly year on year to 28% of the business from just under 27%. Public sector deals fell to 25.5% of the company's overall business from 27.9% last year. • Capgemini has signed a five-year IT infrastructure management outsourcing deal with bank C Hoare & Co.

NCR delivered year-on-year Q1 revenue growth of 19% and a 45% increase in non-GAAP income from operations, led by what the company described as “robust revenue increases in our Europe, Middle East and Africa and Americas regions”.

As well as making financial processing hardware, NCR provides data processing services to numerous financial services customers, including credit unions and banks.

Revenues in the Americas grew 15% to $487 million; EMEA revenues increased 30% to $493 million, and revenue from Asia Pacific, Japan was $203 million, up seven percent from Q1 2007.

The company demonstrated global growth in its traditional industries, banking and retail, both of which grew faster than 20% year on year. “Despite the very challenging macroeconomic environment, we see opportunities to grow our business,” said president and CEO Bill Nuti.

“Our vision for the new NCR is to lead how the world connects, interacts and transacts with business and in Q1 we experienced increased and balanced demand for our products and services across our major geographies.

“We remain focused on our key management priorities of generating profitable revenue growth, building a sustainable leading cost structure and improving our working capital position. And while we have significant work ahead of us on each of these priorities, the progress we demonstrated in Q1 indicates that NCR continues on the right path,” he said.

CFO Tony Massetti added: “We continue to be somewhat cautious for the balance of the year due to the broader macroeconomic issues. “Given our strong start to 2008, we are increasing our full year guidance as follows. We now expect to report full year revenue growth of 5-7%, up from the previous guidance range of 3-5% growth. We are increasing our non-GAAP earnings guidance to a range of $1.52-$1.57 per diluted share, up from the previous guidance range of $1.48-$1.55 per diluted share.”

The time has come to think strategically about systems management, and how it can be used in a co-ordinated and effective manner to deliver real business benefit. This is one of the key conclusions drawn in a report by Butler Group. According to the report, IT Systems Management (Technology Comparison), as organisations demand the IT infrastructure delivers increased levels of availability and quality of service, the focus for IT managers is shifting towards a business service perspective. "Organisational IT structures are often characterised by many different siloed teams of technical specialists," says Roy Illsley, senior research analyst with Butler Group and co-author of the report. "These silos often drive the technology selection process in organisations, which to a large extent is governed by the existing skills within the IT department. This approach has created tensions between the requirements of the business users, and the capabilities to manage the technology of the IT department.

"The result of this siloed approach is that IT resources are locked into technologies, and organisations face expensive retraining or new hiring cost if technologies new to the organisation are selected."

The market in systems ,anagement has evolved over recent years. The leading vendors have all integrated the ability to monitor and manage a variety of infrastructure components, from virtual servers to network switches, into their solutions. Systems management tools are changing IT from being mainly reactive in its response, to being more proactive and business focused.

The new, more holistic approach to systems management is that of simplification, so that the IT department can manage the technology stack at a higher level, and therefore enable it to manage a wider range of technologies more efficiently.

As IT becomes ever more ingrained in the organisation the need to be responsive to business demand in a controlled approach has increased in significance. In fact Butler Group believes that the approach to this problem will differentiate the good IT departments from the average.

In the current economic climate many organisations are facing a tightening of financial controls and spending, IT is not immune from this recession; a recent Butler Group survey found that 73% of respondents expect their IT budgets to be reduced or remain flat in 2008, as compared to 2007. With this more prudent approach the allocation of IT resources becomes a major factor in how IT departments are perceived.

A different approach is required when it comes to managing infrastructure, says the report.

In order for IT to perform this role a number of fundamental changes are required to its operation and its remit, and these must be endorsed by the executive management team.

First, the IT department must have envoys in the business units/departments who act as the eyes and ears of the IT department, while also representing the department/business unit when it comes to delivery of IT change. This dual role creates a tension that IT must exploit so that it can on the one hand collect the real significance and value of any change requested by the business unit/department, and on the other hand ensure that the requirements are in line with IT strategy. Obtaining this level of intelligence will allow IT to establish the impact on existing services, and cost the change accordingly.

Second, the IT department must act as the arbitrator, and not decision maker, in the prioritisation of business demand; to do this it must be the IT department's role to chair a cross-departmental strategy meeting. This meeting should act as the control body where the decisions are made on which new changes are developed, and which services are of a greater importance than another.

Finally, the IT department must develop a strategy that is intrinsically linked to the business strategy; this is a critical shift for most organisations, as IT is not usually invited to the business strategy table. Butler Group contends that having a CTO with the responsibility for IT strategy, and making some IT staff have dual reporting into the CIO and the CTO, provides not only the independence but also the separation required so that IT can play a significant role in the development and execution of business strategy.

Illsley concludes, "Taking a holistic perspective to managing the organisation?s infrastructure requires a different approach and one which many IT organisations are not equipped to adopt. The concept of business-driven demand is not new. In fact IT has evolved based on this premise. However, currently the IT department responds to the department/business unit that either shouts the loudest, or has the capital to invest in new projects. It is our contention that the landscape is moving, and CEOs are increasingly looking toward the CIO as the guardian of business process prioritisation; in other words the IT department is being asked to police the business units based on corporate prioritisation."

Major opportunities in the Nordic sourcing sector are there for the taking by any service provider willing and able to positively differentiate themselves from their competitors, according to the findings of EquaTerra's Outsourcing Service Provider Study 2008 being launched today.

The study reveals that customers currently perceive very little difference between Nordic sourcing suppliers, and do not recognise any true leaders in sourcing service provision for the Nordic countries. “In general, customers in the Nordic region think outsourcing service providers are doing an OK job, but not a great one” explained Peter Skarendahl, director of EquaTerra Sweden. “This, combined with a relatively fragmented supplier market and a lack of distinction between local and global firms, strongly suggests that the time is ripe for proactive service providers to make a real impact in this region” he continued. The findings also very clearly indicate that the use of outsourcing by Nordic organisations is continuing to rise significantly with 82 percent of study participants intending to maintain their level of outsourcing, including 48 percent who are looking to increase it. In contrast, only 8 percent intend to outsource less. Global sourcing is also on the rise in the Nordic region, with the proportion of respondents using global sourcing increasing from 23 percent in 2007 up to 41 percent in 2008. A further 9 percent of study participants are considering using global sourcing in the future. This increase could be attributed to the threat of an IT skills crunch with over half of those organisations increasing their outsourcing activity doing so to get better access to skills. Of these skills, applications management is the area of most concern, with the average satisfaction level for this service slumping from 61 percent in 2007 to 55 per ent in 2008, well below the average satisfaction scores of 59 per cent for end user management and the 61 per cent for infrastructure management. Cost savings and quality improvements are also seen as important considerations, with quality of work emerging as a higher priority for companies based in the Nordic region, in comparison to elsewhere in Europe.

Keep it in, or outsource it? That’s the question many telcos and operators are asking themselves. Outsourcing is still sometimes seen as a controversial option in any business sector, and doubly so in telecoms, especially when it comes to outsourcing core capabilities such as network building and maintenance. After all, isn’t building and managing networks what telecoms companies are supposed to do?

However, a number of factors have combined to put telecoms outsourcing firmly in the spotlight. First, there’s increased scrutiny and pressure from shareholders, investors and customers to perform. It’s all about targets – target dates for network deployment, target dates for go-live, targets for uptime and service levels. And that’s across all types of network and service, from fibre to cellular, to WiMax and radio.

Second, there’s the increasing business focus on sales, marketing and customer service, with the drive to boost efficiency by stripping out extraneous parts of the business and focusing on revenue-generating activities. This move towards leaner operations, combined with job cuts, has changed the telecoms supply chain, with far fewer resources available in-house for services and support.

Third, there’s the telecoms skills gap to overcome. In the early part of this decade, the comms engineers that were building ISP infrastructure simply moved on to other sectors because suddenly, their services were no longer in demand. As a result, a chunk of the telecoms engineering skills base has migrated to other business sectors – just as the telecoms market is entering a major growth phase with next-generation networks.

These three factors have made outsourcing a high priority for key telecoms players, if they are to deliver on their commitments to building, deploying and maintaining next-generation networks.

There are added attractions too: as well as plugging the skills gaps and supplying vital engineering staff on the ground, outsourcing can also deliver cost savings in areas such as procurement, logistics and maintenance, by taking these costs outside of the telecoms company.

However, when outsourcing you still need to choose the right partners – one that delivers value at all points in the relationship, not just manpower to help in a tight squeeze.

So how do telecoms companies go about choosing the right outsourcing partner? Here’s a checklist of the right questions to ask the prospective partner, to help you make the right decision.

Outsourcing success relies on people as much as technology, but where technology is relatively reliable and predictable, people are not. An important factor to bear in mind is that the individuals who set up the telecoms deals are different from those who then run the actual services.

Entrepreneurial minds are responsible for the first six to 18 months, designing and building the network infrastructure, identifying benefits and fine tuning operations. But following roll-out, a new team will be brought in to manage the outsourced service, and there is a risk that they may lack the experience and skills that lay behind the original success of the project.

So ask the prospective partner for their customer credentials, which is the best evidence of their engineering services and understanding of technologies. Look for long experience and blue-chip customer references: if they’ve succeeded on other high-profile networks, there’s a good chance they will succeed for you.

While opting for in-house telecoms maintenance may, on the surface, save you the cost of outsourcing to a third party, make sure you do the maths and work out the true cost of both approaches.

If you go down the in-house route, you’ll have to factor in staffing and equipment costs, as well and the ongoing time and cost overheads associated with continuous training for your engineers. Add in the necessary accreditations to guarantee your staff are up to speed on the latest skills, and you may well find that the economics add up in favour of outsourcing.

Can the partner manage every phase and aspect of the infrastructure project, from consultation and planning right through to building and maintenance of the network? It’s worth checking that they can substantiate their claims when it comes to the scope and scale of their engineering expertise and industry experience.

If the partner has the project management experience you require, then outsourcing becomes even more cost-effective, as you’ll be able to work together to get the best use of existing resources.

Not all outsourcing partners are equal. While some may provide a perfectly acceptable reactive service and be able to demonstrate and back up their credentials, isn’t your business worth a bit more than 'reactive'?

Choose a partner who will look to actively improve your business, and you’ll add real value to the partnership and ultimately get better service.

Can the prospective partner also work with equipment vendors in logistics, inventory supply, integration and commissioning equipment? If so, this can help solve a procurement headache – especially for companies that operate internationally, which may need the same outsourced services for large-scale, multi-country networks.

Dealing with multiple vendors can be a hugely demanding task, but by ensuring your outsourcing partner has the right strategic vendor relationships, you’ll be able to take advantage of a single point of ownership, and reduce the burden on your organisation’s time and resources.

The contract between the telecoms company and the partner will contain multiple SLAs. To help both parties get satisfaction from this, proper lines of communication should be established to ensure that both parties are working towards the same targets and goals.

A precise brief that defines the aims and technical aspects of the installation is key to matching and fulfilling expectations. Irrespective of what services you outsource to a partner, the relationship is based on trust – and trust starts with defined targets and goals. You also need to know that your outsourcing partner, and the agreement you have in place, will give you the equipment, the engineering skills and the right response, so that you can deliver on your business commitments.

In conclusion, outsourcing shouldn’t just be seen as a way to reduce costs, or to plug personnel gaps – it can replace expertise that has drained away from the telecoms sector, and put dynamism back into the business. It’s a partnership that should help telecoms companies achieve their strategic and operational targets. Now that’s worth going out for.

Document management may not immediately excite everyone’s interest, but there’s nothing more effective at focusing the mind than survival. Make no mistake, today’s compliance landscape is harsh and getting harsher – and the key to business continuity is the ability to manage risk, maintain resilience and ensure recovery. With regulatory regimes and the penalties they can levy expanding to meet the explosive growth in information flow, neglecting document management can be a very expensive and damaging oversight.

There are four factors that combine to threaten business continuity for the unwary in document management. The first is the exponential growth of information in modern enterprise, generated and required by businesses, by customers and by regulators. The second is the regulation of information itself, which in recent years has become ever-more wide ranging and ever-more aggressive. The third is that as information flows between various electronic and physical formats, it is increasingly vulnerable, difficult to manage and protect. Finally, information has to be easily accessible (for business and regulatory needs) while also robustly protected.

It’s an enormously complex and often contradictory equation: better management of more information that has to be totally secure while at the same time being immediately accessible. Regulation is the key component in this equation and the impetus for the need for effective document management. With the raft of legislation currently on the books and just around the corner, this is hardly surprising.

There are key regulatory regimes that impact upon a company’s ability to survive, including Basel II and the Safe Harbor Act. To take some specific examples, the EU’s Markets in Financial Instruments Directive (MiFID) requires the reconstruction of the complex variables of market conditions on any given transaction – to satisfy what is known as ‘best execution’ companies need to gather together the incredibly complex strands of electronic and paper data, including email, as part of the formal business record.

Sarbanes-Oxley in the US is one of the most important pieces of legislation affecting corporate governance, financial disclosure and public accounting – important because it makes corporate executives far more accountable for their companies’ financial affairs. The buck now stops with individuals as well as with companies. Also US based but with global implications is Rule 26 of the Federal Rules of Civil Procedure. This covers ‘Electronic Discovery’, whereby electronically stored information relevant to litigation should be available to US courts at a very early stage, wherever in the world it is held. This means that companies must know where their data is kept, how it is stored and how the retention schedule applies to them – or be in breach of the rule.

Government organisations are sharing in the strain of the regulation revolution too. The UK’s Data Protection and Freedom of Information Acts demand that public bodies square the circle of heightened information security with significantly increased rights of access to that information, within stringent timescales.

The UK’s Financial Services Authority (FSA), the independent regulator of the financial services sector, has an extensive arsenal of powers that can be ranged against any companies that don’t meet its standards. Once again, the time limit given to companies to provide their secure information for scrutiny is exacting, with the FSA classifying ‘readily accessible’ as being a mere 48 hours. The FSA levied over £68 million in fines for compliance breaches between 2002 and 2006. Failures in effective record keeping accounted for over £12 million of this total and 44 per cent of fines over £750,000 related to records management lapses.

It is safe to say that compliance is very much on government, board room and media agendas. The regularity of breaches from organisations large and small shows how easily reputable organisations can inadvertently fall foul of information legislation. So what can they do?

The complexity involved at this level of document management is understandably daunting for companies, simply because it isn’t a core part of the business. Intelligent document management is a highly specialised discipline and not something that can simply be appended to an existing employee’s job description. Businesses need a strategic partnership with a company with extensive expertise. Use of the word ‘partnership’ is deliberate, because a document storage solution simply isn’t enough – enterprises need a partner that truly understands their business and tailors solutions to specific needs.

Records management should be seen as a component of a comprehensive corporate compliance strategy, which will help to reduce legal and financial risk and, importantly, safeguard a business’s reputation. A record management programme must include effective policies and procedures, retention schedules, disposal routines, communications, proof of training and enforcement. Attack is the best form of defence.

With over 50 years of document management leadership experience, Iron Mountain knows that companies need a 360⁰ perspective to deploy a comprehensive and integrated roadmap for compliance. To put it simply, aggressive regulation calls for aggressive compliance:

• Organise a solid infrastructure that will encompass determining the scale of the programme, the creation of effective programme governance, business area specific task groups and sufficient administrative resources.

• Assess and plan with a thorough records inventory, evaluation of existing document management systems, risk assessments, analysis of legal access and retention requirements and the development of a strategic plan.

• Develop key components and metrics which will include a realistic retention schedule and company-wide policies to provide the foundation for a credible, consistent and compliant programme.

• Implementation is critical – the success of the programme will be based on delivery, not its design. As with any project, implementation needs to be applied as a formal exercise containing tailored communication and training components.

• Manage the programme because, no matter how successful the implementation, if it isn’t enforced it will fail.

• Audit and accountability are essential to ensure that everything is working well and the business is consistently compliant.

Let’s go back to the complex equation mentioned earlier to see how a strategic partner can resolve the contradictions that regulation imposes. Electronic information can be stored in a safe online digital records centre – quickly retrievable only by authorised staff from any internet enabled computer – so that it is both secure and rapidly accessible. Physical documents can be held offsite in secure data storage facilities, freeing up expensive office space, data security resources and archive staff – increasing the capacity to manage, store and exploit growing information resources. These documents can then be scanned cost effectively, as they are needed, and accessed with the speed and accuracy of electronic documents – delivering true integration of varying storage formats.

Today, more than ever before, records management compliance is a strategic priority. Document management is often seen as a necessary evil but the expertise of a strategic partner can take away the pain by reducing costs, simplifying business practice and ensuring continued compliance. Enter this environment unprepared and companies will pay the price, but if they enter with a strategic partner with the right expertise they will not only survive, they will thrive.

Software as a service (SaaS) business suite vendor NetSuite Inc. has announced operating results for its first quarter ended March 31, 2008.

The San Mateo-based company has announced Q1 revenue of $34.1 million – a 47% year-on-year increase over the first quarter of 2007, and an eight percent increase over Q4 2007. The company says this is the 34th consecutive quarter of growth. Despite this, Net loss on a non-GAAP basis for the first quarter of 2008 was $(420,000), or $(0.01) per share.

For the full year 2008, NetSuite has issued guidance of revenues in the range of $154 million to $157 million. Non-GAAP net loss, which excludes the impact of stock-based compensation expense, is expected to be in the range of $(2.5 million) to $(0.5 million).