Compliance and Outsourcing

By Mark Brousseau

While new compliance, security and privacy regulations are likely to take a bigger bite out of operations budgets this year, most organizations believe they can meet the stricter rules without having to outsource their payments and document processing. Just 20 percent of respondents to a recent TAWPI Question of the Week said new compliance, security and privacy regulations would force their organization to consider outsourcing. Sixty-five percent of respondents said the tougher regulations wouldn't force them to consider, and 15 percent of respondents said they weren't sure.

The time and cost associated with meeting compliance, security and privacy regulations continues to rise -- giving pause to any company entrusted with sensitive data that must be stored and shared.

"Regulatory compliance is very expensive and extremely time-consuming," says R. Edwin Pearce (epearce@egisticsinc.com), executive vice president of sales and corporate development for eGistics, Inc. "Companies have two choices for meeting regulatory demands for privacy and security: assume the full expense of the resources and time associated with meeting each regulation, or work with an outsource provider that can spread the costs of meeting the regulations across its customer base."

Pearce also believes that organizations should ask themselves whether it makes sense to go through the cost and trouble of becoming compliant, when there are outsource providers that already are.

"Companies don't necessarily have to absorb the full capital burden of meeting various certification and compliancy tests," Pearce explains. "For example, organizations that store images and data for multiple years may have to meet PCI, SAS 70 and HIPAA regulations. Rather than engineer a data center environment that meets all of these requirements -- including policy and procedural standards -- it may make better sense for the organization to partner with a compliant outsource provider."

"The result is faster compliance, at a significantly lower cost," Pearce adds.

With new regulations on the horizon, this is a decision more organizations will have to make.

What do you think?