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Maintaining Control Over Outsourcing

Utilities can transform the business while managing risk.

Fortnightly Magazine - September 2005

over information technology and related processes. The existence of an SAS 70 should reduce the time and cost associated with auditing a vendor.

In conclusion, the prospect of increased financial returns and higher performance targets proffered by outsourcing vendors, combined with powerful examples of success stories, presents a very attractive argument for many utilities to outsource. However, delegation of responsibility to an outsourcer introduces a broad range of changes and challenges. Thus, while the need for strong controls remains integral for any business environment, the variety and intensity of controls must change significantly to thrive in this new and more complex setting. A proactive control strategy that touches all dimensions of the outsourcing arrangement has the power to make the promised benefits an attainable reality.

 

Endnotes:

  1. John T. Brock and J. Christopher Perdue, “The Evolution of Outsourcing in the North American Utility Business,” UtiliPoint, 14 July 2004: 4.
  2. Dan Sullivan and Diane Shelgren, “ Business Process Outsourcing: Myth or Reality? Public Utilities Fortnightly , September 2004, p. 56.
  3. Deloitte Consulting, LLP, “Calling a Change in the Outsourcing Market,” April 2005: 7.
  4. Diane Shelgren, “Outsourcing HR in the Power Utilities and Energy Industry,” Utility Automation & Engineering T&D Online , 23 August 2004.
  5. “Featured Article: A Winning Relationship” http://www.saic.com/cover-archive/saicachieve/entergyOutsourcing.html
  6. 7. Kathleen Goolsby, “The Role of Outsourcing in Facilitating Corporate Agility,” June 2004, http://www.outsourcing-information-technology.com/role.html.

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