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Outsourcing IT Services EXECUTIVE SUMMARY
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Added on 2020-04-07
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IT functions that Aztek is considering outsourcing include application development and management, desktop management, data or managed security roles and network development.This IT functionality can expose the organization in extreme cases of IT risks such as cyberterrorism, cybercrimes, computer fraud and cyber espionage if the outsourcer is a greedy untrustworthy individual (Wang et al, 2015). The main goal of Aztek at the moment is expansion, growth and development and outsourcing some resources to focus on this objective will be worthwhile in the long run
Outsourcing IT Services EXECUTIVE SUMMARY
Added on 2020-04-07
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NAMESTUDENT IDINSTRUCTORAFFILIATE INSTITUTIONSUBJECTTOPICDATE1
RISK ASSESSMENT FOR OUTSOURCING IT SERVICESEXECUTIVE SUMMARYKey Information Technology (IT) functionality comprises a set of the major tasks performed by the latter in the organization. These functions include planning, communication, application and network development and technology support (Galliers et al, 2014). Outsourcing is the act of procuring these IT functionalities from an outside vendor especially if the organization’s IT teamcan carry them out. Aztek is a financial institution that is responsible for accepting deposits from the general public and issuing out loans. It has a strong IT team that carries out all the roles of IT.Lately, however, Aztek’s management has been considering outsourcing IT services to give the IT team enough time to concentrate on other more demanding issues. This has been as a result ofthe organization’s fast growth.Outsourcing IT functionality is a very beneficial step to Aztek as it leads to risk sharing between the institution and the outsourcer. It is also a cost-effective way for the organizationto have a functioning computer system and allow sufficient time for its IT team to concentrate on other functions such as planning. Also, it has a tax advantage since the expenses of outsourcing are deducted from that period’s earning. It also increases the cash flow from thetransfer of software passes and staff to the service provider. This means that the institution is not liable to that group and the expenses they incur. These expenses become the organization’s gains. Increase in cash flow may also stem from the lease of the equipment that is no longer in use. IT functions that Aztek is considering outsourcing include application development and management, desktop management, data or managed security roles and network development.This IT functionality can expose the organization in extreme cases of IT risks such as cyberterrorism, cybercrimes, computer fraud and cyber espionage if the outsourcer is a greedyuntrustworthy individual (Wang et al, 2015).These risks are however avoidable if the organization carries out its outsourcing activities diligently and cautiously by ensuring that the agreement is in written form and signed by the outsourcer. Based on the various advantages of outsourcing IT functionality and the results of therisk assessment, it would be prudent for Aztek to take up the decision to outsource key IT roles (Clark, G. L., & Monk, A. H., 2013).2
The main goal of Aztek at the moment is expansion, growth and development and outsourcing some resources to focus on this objective will be worthwhile in the long run.The institution should conduct regular inspection of the outsourcing process to avoid any misconduct from the outsourcer and to tackle any problems that may arise without delay.Additionally, after outsourcing the organization should take measures to ensure that the outsourcer did not tamper with its crucial information or delete it. It should carry out a thorough analysis of the computer system and networks to clarify that the components are in order and the system is still functioning the right way (Lacity et al, 2017).Aztek should take serious data security measures to avoid any leakage of information to the public and competitors. The financial sector is a very competitive industry and a single wrong move can set the institution off its game. Employees should be alert and cautious all the time to avoid forgetting their devices in communal places. The organization can use encryptions, digital signatures as well as biometric identifiers in securing their data, especially that which is exposed to the public could pose serious risks to the institution.Table of Contents3
INTRODUCTION.......................................................................................................................................5Main functions of IT................................................................................................................................5OUTSOURCING IT SERVICES................................................................................................................6Introduction.............................................................................................................................................6Outsourcing Regulations.........................................................................................................................7Reasons for outsourcing..........................................................................................................................7IMPACTS OF OUTSOURCING ON AZTEK’S SECURITY....................................................................8CYBER RISKS.......................................................................................................................................8Cybercrimes.........................................................................................................................................9Cyber Espionage or Cyber Spying.......................................................................................................9Computer Fraud...................................................................................................................................9Financial Crimes................................................................................................................................10Cyberterrorism...................................................................................................................................10Cyberextortion...................................................................................................................................10Cyber Risks Mitigation......................................................................................................................11Counterparty Risks................................................................................................................................11Exit Strategy Risk..................................................................................................................................11Country Risks........................................................................................................................................12Contractual Risk....................................................................................................................................12Access Risk...........................................................................................................................................12Lack of Ownership................................................................................................................................12DATA SECURITY...................................................................................................................................12Data classification.................................................................................................................................12RISKS TO DATA.................................................................................................................................13Theft..................................................................................................................................................13Data loss or Accidental loss...............................................................................................................14Imperfect or Improper data deletion..................................................................................................14EFFECTIVE DATA RISK MANAGEMENT.......................................................................................14Encryption.........................................................................................................................................14Authorization.....................................................................................................................................14Use of Digital Signature....................................................................................................................15Biometrics.........................................................................................................................................15CONCLUSION.........................................................................................................................................154
INTRODUCTIONMain functions of ITIT is an essential component of success in the financial sector. Financial institutions all over the world are trying to come up with new and improved ways of making their services more desirable and efficiently available to their customers. Their efforts have led to theavailability of internet services in the banking sector such as telebanking, internet banking, self-inquiry facilities and anywhere banking-everywhere banking (ATMs). Aztek company has not been left behind in these developments. The organization has incorporated IT in most of its operations with the aim of achieving a competitive advantage (Terlizzi et al, 2017). The major IT functions in Aztek include planning, communication, technology support, network development and data management and security.Planning is mostly encompassed by Enterprise Resource Planning (ERP), which is a cross-functional technologicalapproach that takes care of all the roles undertaken in an organization. Aztek’s IT team works with the executive management to come up with an IT strategy that supports all the organizational departments as well as its objectives. The team is also responsible for ensuring that there are enough IT resources in the organization (Peppard, J., & Ward, J., 2016).IT enables efficient and instant communication within and without the organization hence increasing collaboration among the employees and between the management and the workers. This enhances the efficiency and effectiveness of the work done.Technology support is provided by the IT team whereby they attach manuals for user support on every part of a new or improved technology to enable all employees to make effective use of the new resource. This service is also extended by theprovision of ongoing support to users through a helpdesk in the organization’s intranet.It is essential for Aztek’s IT team to provide Data Management and Security measures. They should protect the company’s data from viruses and cyber-attacks such as hacking which could result to altering or destroying of crucial information permanently. Critical information should also be encrypted to avoid leaks. Data management is achieved via the use of databases that store, manage and control access to the organization’s data (Chi et al, 2017).5
Network Development entails coming up with a new network that supports communication and teamwork within the organization as well as enabling the outside stakeholders such as customers to have easy access to its services. For example, Aztek’s IT team deploy Internet Protocol (IP) networks that can carry data, voice and video messages in a single network.OUTSOURCING IT SERVICESIntroductionThere has been an increase in the rate at which financial service providers all over the world have been obtaining IT services from outside sources even when their IT team can undertake the obligation (Verwaal, E., 2017).Surveys carried out in the Financial industry in the past have shownthat financial institutions outsource substantial portions of their regulated and even unregulated functions, sometimes across a country’s boundaries (offshore outsourcing).Some organizations move their operations to other countries or have foreign subsidiaries in a foreign country carry out their functions for them (offshoring).The IT services that Aztek is considering to outsource are; desktop management, application development and maintenance, Managed Security Services(MSS)and network development.Application development and maintenance: this includes coding which should follow a laboriousSoftware Development Life Cycle (SDLC) created as part of the service provider’s standard quality process. The suppliers should therefore strictly follow the specifications given to them bytheir clients. The organization’s management should monitor the procedures to compare the actual performance with the expected levels of service provider parameters.Desktop management: this entails physical hosting of servers and other IT assets, continuous monitoring and capacity management of the latter,server builds and application software installation and upgrading, backup and restoration and recovery of server systems in case of a tragedy. Local Area Network (LAN) establishment and maintenance is also includedinthis category.Managed Security: this takes care of the safety of the entire IT infrastructure and all data assets in the organization.6
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