Compliance Regs and Small Service Providers May Not Mix


    According to this article in ComputerWorld, US government regulations such as SOX may force more companies to stick with bigger providers to “ensure that their outsourcers comply with the laws.”

    Says one CTO in the article, who works for First Horizon Bank in Memphis, TN, "My biggest concern right now is that it's almost impossible for us to do business with small companies, especially small innovative companies that aren't well financed. This is going to be a problem for us as an industry and as a company over time, because a lot of innovation comes from them."

    The same article quotes the director of operational risk management at Regions Financial Corp. in Birmingham, AL, as saying that her company has reduced the number of service contracts from 500 to 30 “to reduce risk.”

    By centralizing management and contract information, the company can better keep track of its outsourcing efforts, [Landy] Dutton said. "When you manage outsourcing in the business units, you never know how many contracts you have," she said.