Outsourcing Risks for Huffman Trucking Company
Cliff Webb
CMGT/442
July 11, 2011
Leroy Hurt

Abstract
The current analyses of the different types of opportunities at Huffman Trucking Company to be outsourced are great. The major issue is the risks that are involved with each of those tasks that may be outsourced to another company. Just to say we are going to send our work outside the company is not a risk that most companies are willing to take without the proper research that will ensure the business the risks involved will be minimal and those risks will be managed. To send the data storage to an outsourced company has the potential to have the data lost in transmission or even hacked into at the location. The ability to have applications such as payroll and human resources being outsourced can lead to employee information being lost or stolen. Using a vendor to manage either the desktops or the network also has major risks involved that need to be handled accordingly. While these are only a few things that can be outsourced at Huffman Trucking, these are the items most organizations try at one point or another to outsource. Looking at the items Huffman needs to ensure the proper risk mitigation strategy is in place for each of the topics and how the company will deal with each one.

Introduction
Huffman Trucking Company has decided to take on the endeavor of possibly outsourcing multiple aspects of their organization with companies that will ensure the business the same or better quality than is being received today. Huffman is looking to outsource data storage, payroll and human resources, desktop support, and network support. Each of the outsourcing companies has given Huffman a business plan that will ensure Huffman their way is better. The simple fact is, not all things are as they may seem. Looking at each of these items it is best to have a strategy in place for those risks that may occur when moving to an outsourcing company for each of the topics above. There are risks in each and every one of the above topics and identifying those risks and having a risk mitigation strategy for each is crucial for Huffman Trucking Company.
Data Storage
Outsourcing data storage has become an increasingly large business for small to mid-sized business. Whether email archiving or back-up storage, nearly 20% of Fortune 1000 companies rely on some third party data storage (Connor, 2007). The trend for outsourcing data started to diminish with the failure of the dot.com companies in the early 2000s. However, this trend seems to be turning back to favoring outsourcing for various data storage needs (Connor, 2007).
The issue with using a third party to outsource the company’s data storage needs has to be with some of the risks that can occur and what should be done when the risk presents itself. One of the major risks that Huffman Trucking has when dealing with the outsourcing of data storage is ensuring the data is secure and easily accessible in the case of recovery is needed. Having a plan in place to ensure the data is accessible in a timely fashion is one that Huffman Trucking needs to be concerned with and the proper risk mitigation strategy can help with this.
The first step is to characterize what the root cause may be and that is simply timely manner in which the data is able to be accessed. This could be caused by the outsourcing company’s network to Huffman Trucking being down. Some of the common causes for these risks could be construction with lines being cut or by lags in network traffic. The best alternative for this risk is to have a second line in place to Huffman Trucking that will ensure the outsourced company is reachable. Another alternative is to have a backup ISDN line available to them as well. The second line into Huffman Trucking is ideal, with the ISDN line being a great second option as well. Huffman Trucking and the outsourced company should agree that the second line into the company will only be live in case of a failure to the first line and will only incur charges in the event the line goes active.
Payroll and Human Services
Outsourcing the payroll and human sources software to a third party vendor is another issue that Huffman Trucking is now facing. With the every growing need to keep in line with other like businesses, Huffman Trucking is looking to outsource these applications versus keeping them in house. Huffman Trucking currently employs about 1,400 workers in the different locations and maintaining employee privacy will be the major risk here (Apollo Group, Inc., 2005).
Employee privacy will need to be maintained when choosing to move these services to an outside vendor for these services. Employee’s addresses, phone numbers, and even social security numbers are extensively used in these applications, and the protection of this data is imperative. One way to help with this issue is that most of the major companies today are bonded for the company’s protection as well as their protection (Benny). Being bonded in itself shows that a company is legitimate and is willing to protect your organization as well as theirs.
The risk of identity theft is a risk that everyone today is worried about and simply a company being bonded is not enough anymore. One thing a company can do is to offer identity protection services as a part of the contract as well (Benny). In doing this, Huffman Trucking is helping mitigate the risk of identity theft by making the company take responsibility for their employees and showing their ability to want to help as well. Another plan is to also have the company run background checks on its employees (Benny). This shows that not only is the company looking out for their interest, but for Huffman Trucking interest as well.
Desktop Support
Desktop support outsourcing is steadily decreasing in pricing as companies are able to move these services to overseas vendors (Overby, 2009). The ability to remotely manage a system today is one of the reasons this is becoming possible. With the cost becoming increasingly lower, many IT departments are being faced with the thinking that outsourcing this support is a great idea. This may not always be the case. Just because a company is offering a lower per device charge does not mean the level of support is that in which the organization has no responsibility (Overby, 2009).
One of the main risks for desktop support outsourcing is that control of the services may be lost. One of the ways to help keep this from happening to by having a supervisor that is knowledgeable in managing IT resources on staff (Corporate Computing Services, Inc.). This can be handled in a manner that is usually suited for both the outsourcing company and Huffman Trucking. Having an outsourcing company agreeing to have their employees report to an internal manager helps keep the control of the support internal to the company and has that employee report to the same management structure as the rest of the organization.
Network Support
Network support outsourcing is much like that of desktop support services as well. The ability to find a company that is in tune with Huffman Trucking is crucial when choosing this partner. Network support services are being outsourced today more than in the past at an increasing rate. One of the main issues with outsourcing network support is the security risks involved (Scarpati, 2009).
Network security risks pose a problem on the network that even after hiring a third party vendor, other costs are usually involved in keeping these risks to a minimum. One way to help with this is to insist that local support be given in the case that support is needed to gain access to certain systems in order to fix an issue (Scarpati, 2009). While most outsourcing companies rely heavily on remote management of the systems, the extra cost to ensure security concerns may not make the cost as attractive as before (Scarpati, 2009). To help with this risk, Huffman Trucking should require the company to help with the extra needs to ensure security on the network as well as have a local presence for those times when remote support is not an option. In doing this Huffman Trucking will reduce its risk with network security as well as the added cost of the additional software and or equipment.
Conclusion
Huffman Trucking is an organization that is on the rise in the industry and in order to maintain its place in the business must look to outsourcing of these items to stay profitable. While there are risks involved with each and every one of the systems above, Huffman Trucking can minimize these risk by using the risk mitigation strategy put in place for each of the risk listed. This will ensure Huffman Trucking Company’s management team that the risks have been brought to the front and taken care of by both internal employees and the outsourcing companies. Outsourcing has to be thought of as a partnership and not just one company working for the other in order for it to be successful (Scarpati, 2009).

References
Apollo Group, Inc. (2005). Huffman Trucking Company. Huffman Intranet.
Retrieved June 26, 2011. CMGT/442 Information Systems Risk Management. https://ecampus.phoenix.edu/secure/aapd/cist/vop/Business/Huffman/HuffmanHome002.htm.
Benny. (n.d.). Risks of payroll outsourcing . Retrieved from http://www.farmcreditofmissouri.com/753/risks-of-payroll-outsourcing/
Connor, D. (2007, January 22). Storage outsourcing on the rise . Retrieved from http://www.networkworld.com/news/2007/012207-storage-outsourcing-rises.html
Corporate Computer Services, Inc., Initials. (n.d.). It outsourcing: the reasons, risks and rewards. Retrieved from http://www.corpcomputerservices.com/articles/outsourcing-reasons
Overby, S. (2009, August 31). As prices for outsourced desktop support drop, some it shops get shafted. Retrieved from http://www.cio.com/article/501012/As_Prices_for_Outsourced_Desktop_Support_Drop_Some_IT_Shops_Get_Shafted
Scarpati, J. (2009, October 7). Network security risks multiply when enterprises begin outsourcing. Retrieved from http://searchnetworking.techtarget.com/news/1370642/Network-security-risks-multiply-when-enterprises-begin-outsourcing