Outsource Magazine

This month's column is guest-authored by Yann Souillard, Director, LDC. Yann is responsible for sourcing and completing transactions in the £2m-£100m equity range. He has a BSc in Economics from The Wharton School of Business and grew up in Spain and Japan.

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In light of the government’s internet crime report published earlier this year, which estimated that the cost of cybercrime to the UK economy is more than £27 billion a year, the importance of effective information storage, handling and security is clearly critical. We now exist in a world in which every company, big or small, has to deal with a flood of information on a daily basis. Therefore it is essential that businesses have a robust strategy in place to manage the handling and storage of data, from an operational, commercial and security perspective. Outsourcing this important function is an increasingly attractive option.

 

The huge amounts of data that businesses generate has been growing for some years and the task of managing this data in such a way as to add value to a company, or at least not to hamper operations, is a considerable challenge. For SMEs, and start-ups in particular, which are unlikely to have the necessary skills inhouse to handle this, outsourcing the task is a sensible decision. In addition outsourcing non-core services such as information management can deliver much greater levels of efficiency and a lowering of staff costs compared to wasting time and resource attempting to master the task internally.

Outsourcing is not just about costs, however: it is a wider operational imperative as well. For example, one sector in which the efficient gathering, collation and handling of records is operationally critical is healthcare, where in extreme cases it can be a life or death matter. The volume of data generated by today’s healthcare providers presents an immense challenge. For example, a patient’s healthcare record has on average an active life of 80 years over which it must be managed and different parts may be held by different organisations, creating a fragmented mosaic of information from which clinicians may struggle to extract vital details.

Health services are already overburdened with administrative and logistical tasks so it makes sense for them to outsource the problem, to enhance information storage, management and retrieval capabilities in order that information is always maintained in its most usable form for clinicians. Clearly, the healthcare sector is also a good example which highlights the importance of focusing on the direct implications of information management for the customer as well as the business.

Today the internet is one of the most critical tools to the running of businesses and so data loss is a real risk and its protection should be a priority. Out of the estimated £27 billion cost to the UK economy of cybercrime each year, £21 billion of this is  directly borne by businesses. Recent research by Hiscox, a specialist small business insurer, revealed that nearly a quarter of SMEs are concerned about e-risks and cybercrime, showing that there is growing awareness of the problem. In many cases, the security of data can be better ensured by outsourcing the function to a specialist firm.

Outsourcers in this area are also pioneering new approaches. For instance, Sala International, one of LDC’s portfolio companies, is developing an Integrated Records Management outsourcing solution consisting of three main activities that cover the whole life cycle of a document: Archiving, Paper Process Outsourcing (“PPO”)  and Destruction. 

The customer benefits from an IRM solution come from bringing together a selection of interrelated services, that have traditionally been sourced and provided by a number of different suppliers to form a ‘one-stop shop’ solution, which delivers customer advantages from cost savings and increased efficiencies gained by integrating the services, and the continued innovation of new services. 

The outsourcing of information and data management is no longer just a tool of simple convenience, but is increasingly becoming a central element of a company’s business strategy. It has the ability to enhance a firm’s operational and commercial performance  and can provide an additional level of security hard to create for one’s own firm. Data and information management companies are also becoming increasingly sophisticated in their solutions – and SMEs should embrance the benefits.