IT WEEK • 15 NOVEMBER 2004
40 COMMENT IT managers have to make big changes
to ensure outsourced work is handled properly
CONTENTS
40 REPORT Tough penalties
may deter more spammers
40 COMMENT IT chiefs will soon have
to start acting as relationship managers to ensure outsourced work
is carried out in their firm’s best
interests, says Madeline Bennett
37 REPORT Courts in Australia and
the US are taking a tougher stance
against spammers and fraudsters
but will this reduce the amount of
spam reaching firms in the UK?
MANAGEMENTWEEK
WHERE TECHNOLOGY BECOMES BUSINESS REALITY
Editor: Madeline Bennett
RFID concerns stall uptake
F
US reporting law hits UK
To aid compliance, IT vendors such as
EMC and HP are developing new technoloK firms with US connections are
gies and upgrading existing products to
bracing themselves for the financial
improve record-management capabilities.
reporting element of the Sarbanes-Oxley
EMC last week released Documentum
(SOX) Act, which comes into force today,
ApplicationXtender 5.2, which combines
affecting the management of a wide range
an EMC Documentum Records Manager
of data, including that associated with
module and a new web-based workflow
email, messaging and recovery processes.
client. Optimised for Windows and dotAny firm with a listing on Nasdaq or
Net, the module provides simplified conthe New York Stock Exchange (NYSE) has
tent management and retention tools. EMC
to comply with SOX, even if it is a European
is also considering adding ApplicationXcompany headquartered outside of
tender’s imaging capabilities to its
the US. Firms with a flotation value
core Documentum platform.
of less than $75m have a slightly
HP is working with database
later deadline – 15 July – to comply
firms and software developers to
with SOX Section 404 reporting and
build tools that extend its Storagedisclosure requirements.
Works Reference Information StorAlthough UK subsidiaries of
age System (RISS) to archive unUS corporations may not be directstructured data in Oracle’s dataly affected, they will have to ratify
base, Microsoft’s SQL Server and
the integrity of the data and report- Hamerman: Sybase’s database applications.
ing they share with their US parent. tighter control
“We went down this road [for
Brian Fonseca
U
itweek.co.uk
Mark Street
© eWeek USA 2004
irms are reluctant to roll out radio
frequency identification (RFID)
wireless tag technology to the entire
supply chain because of the poor quality of
the data made available and lack of integration, according to new research.
In a poll by analyst VDC, 60 percent of
firms said that they were highly concerned
about the quality of data retrieved from
RFID systems, and 55 percent were highly
concerned that the data was not synchronised with their legacy systems.
The analyst said that in some pilot
schemes, readers missed 30 percent or
more of the RFID transponders. And readers can register information several times a
second, resulting in questionable data in
some cases, according to the firm.
Many companies said they were finding
it hard to extend their RFID pilot schemes,
especially in the consumer goods, pharmaceutical and military supply chains, because
the reader technologies, whether barcode
or RFID, generated more data than their
legacy systems could handle.
The respondents also said
op EPC IS, a technology that
KEEP IT CLEAN
they expected the poor qualcombines product movement
Are firms worried about
ity of data would become a the quality of RFID data? data from RFID readers with
problem for those firms at
enterprise apps information.
Very
60%
concerned
the top of the supply chain,
IBM and EPCglobal, an
Quite
and it is important to impindustry
group for certain
30%
concerned
rove the situation as quickly
RFID standards and policies,
Slightly
as possible.“Without queshope to establish EPC IS as a
concerned 8%
tion, clean data and data synformat for trading partners
Not
concerned 2%
chronisation is a top priority
to gather and exchange inSource:VDC
for any RFID implementaventory information. The
tion,” commented Mike Liard,
plan is that EPC IS will give
RFID practice director at VDC.
suppliers a reason to participate in RFID
Others said cost is another huge barriimplementations beyond merely complyer to RFID deployments. A recent survey
ing with the RFID requirements of retail
by ARC Advisory Group found that 95
giants such as Wal-Mart and Tesco.
percent of manufacturers anticipate no
“[We’re trying] to create a database
return on investment on their RFID implethat contains the life history of a product,
mentations for the next two years, at least.
all that history of events from the time [a
“I just feel sorry for these poor suppliproduct] is manufactured and sold could
ers,” said Steve Banker, service director for
be stored,” said IBM’s Chris Clauss.
supply chain management at ARC. “In my
With EPC IS, firms would develop intermind, the biggest issue is the cost of this. It’s
nal repositories to house product data. They
$1m to $1.5m to prepare the infrastructure
could then share that data via the EPCgloband half a million to prepare the tags.”
al Network. However, the data would need
Meanwhile, IBM is working alongside
to be cleansed and synchronised first.
the leading RFID standards body to devel www.epcglobalinc.org www.eweek.com
SARBANES-OXLEY RULES
The SOX Act comes into effect
• today
for UK firms with US listings.
Its financial reporting requirements
• will
affect the way firms handle data.
IT vendors are developing and updat• ing
technologies to aid compliance.
SOX compliance] 18 months ago, and it’s
still an upwards climb,” said Vincent Cottone, of US firm Eaton Vance, which runs
Veritas’s KVS Enterprise Vault Discovery
Accelerator for email record retention; and
Enterprise Vault Compliance Acceleration.
“Everyone will have to keep going through
refinement to find better ways of handling
and testing [internal] controls.”
Paul Hamerman of analyst firm Forrester said the SOX rules would cause firms
to tighten internal management controls.
“In 2005, we will see a more mature software market for internal controls and SOX
apps, as many more firms work to make
this compliance requirement sustainable,
with much less effort,” he added.
www.eweek.com
© eWeek USA 2004
Mark Street and Jacqueline Emigh
Training gap
leaves firms
short of skills
Despite growth in offshore outsourcing, three-quarters of IT chiefs say UK
firms are suffering skills shortages due
to a lack of industry investment in
training, according to new research.
Almost 90 percent of directors see
a clear link between vocational training
and increased profitability, but just a
quarter are involved in the design and
delivery of vocational training, according to a survey by the Department for
Education and Skills (DfES).
Research carried out by the
DfES-backed training organisation
Foundation Degree found that almost
two-thirds of senior IT managers
were having trouble recruiting specialist staff because of a lack of suitably qualified applicants.
The bulk of IT directors – 85 percent – said industry needs to do more
to increase skills across sectors by
being more involved in the provision
of courses. But just 35 percent of IT
chiefs in the survey said their firms are
involved in the design and delivery of
vocational training.
Foundation Degree found that 80
percent of IT directors see a clear
connection between vocational training and increased profitability; and 80
percent also believe that training helps
to improve staff satisfaction.
Sixty percent of IT directors
said work-based learning provides
excellent preparation for those
entering the workplace.
Paul Davies of Foundation Degree
commented,“We would encourage
directors to lead from the front
by championing at board level the
recognition of vocational training as
central to profitability, and then taking measures to integrate this in their
HR policy. Only then will they start
to bridge their skills gaps.”
www.foundationdegree.org.uk
39
MANAGEMENTWEEK
IT WEEK • 15 NOVEMBER 2004
Outsourcing twice removed
IT managers will have to develop new skills to ensure outsourced IT work is properly
managed, or their firms may face a wide range of difficulties, says Madeline Bennett
India, who he paid $12,000. This left
the US programmer with just an
hour-and-a-half’s work each day
supervising the code.
Although this story turned out
to be false, there’s no reason why
situations similar to this couldn’t
actually happen if outsourcing is
not properly managed – as with
my friend’s experience.
According to analyst firm Gartner, the role of IT directors is
changing and they are becoming
relationship managers. It predicts
that over the next five years, a third
of the current chief information
officer (CIO) roles will have transformed or disappeared, and IT
managers will need to spend more
than half of their time managing
relationships outside their enterprise as outsourcing grows.
There is ever-increasing pressure on IT departments to cut costs
while aligning their operations to
business objectives to add value. To
do this, there is a strong argument
for outsourcing basic and non-core
IT operations, allowing internal
technology teams to focus on using
and developing IT to gain a competitive advantage.
Many outsourcers try to sell
their services by saying they cover
technology such as application
development, web services and
claims processing on such a large
scale that they can do the work at a
lower cost than in-house IT staff.
If this kind of outsourcing continues to grow, most IT functions
could eventually be farmed out,
leaving the in-house IT staff who
survive as the link between the out-
Courts get tougher on spam
SECURITY TRENDS REPORT BY MADELINE BENNETT AND WAYNE RASH
wo recent court cases on opposite
sides of the globe have seen judges
and juries hand out unexpectedly tough
penalties to spammers.
A court in New South Wales, Australia,
recently sentenced internet fraudster Nick
Marinellis to at least four years in prison.
Marinellis was accused of masterminding a
419 scam worth £2m. Such scams typically
dupe email users into paying a fee for a nonexistent share of millions in lottery winnings or inheritances.
Meanwhile in the US, a Virginia jury
has recommended a nine-year jail term for
Jeremy Jaynes, thought to be the world’s
eighth most prolific spammer. Jaynes’ sister was fined $7,500. The pair were accused
of bombarding AOL customers with hun-
T
dreds of thousands of spam messages selling non-existent products, which allegedly netted them a fortune of $24m.
Anti-spam vendors welcomed the US
jury’s recommendation. Jamie Cowper,
senior technology consultant at messaging
specialist Mirapoint, said the sentence
would put the penalties for spammers on
the same level as those
for more traditional
conmen. “While there
might be an outcry in
some quarters over a
sentence of nine years
for spam, this recom Cowper: longer
sentences are justified
mendation needs to be seen in context,” he
said. “Jaynes has defrauded thousands of
people to the tune of $24m – this is hardly an insignificant amount of money.”
Although the nine years is only a recommendation and could be reduced, antispam activists welcomed the proposal. “It
sends the right message to the rest of the
US-based spammers, such as those pumping millions of spams out illegally through
hijacked proxies, that jail time is waiting
for them,” said Steve Linford of anti-spam
organisation Spamhaus.
Messaging security firm CipherTrust
estimates that 86 percent of spam originates
from the US. Therefore, stronger measures
against American spammers could have
knock-on benefits for email users in the
UK. Only a few individuals are responsible
for the vast majority of unwanted emails, so
each successful prosecution could cause a
sourcers and the business. If this
happens, people skills and contract
management expertise are no
longer going to be nice-to-haves
but must-haves.
Sensible IT managers will plan
now to improve their expertise in
such areas in preparation for the
changes. They will also use the
time to close the gap between key
IT functions and business strategy,
demonstrating that their work and
that of their staff adds value, and is
not just a cost centre. ITW
[email protected]
SUMMARY
email fraudster in Australia has
• An
been sentenced to four years in
•
prison, and a US jury has recommended nine years for a spammer.
Anti-spam campaigners say such
tougher sentences will deter spammers, especially as the majority of
junk email comes from the US.
significant drop in spam worldwide. AOL
initiated the arrest and conviction. The
company said that its lawyers were involved in the prosecution, and a number of
its employees served as witnesses.
AOL spokesman Nicholas Graham
welcomed the conviction as “a milestone in
the fight against spam”. He added that AOL
now wants other courts to follow the lead
of the Virginia jury.“These are the kinds of
laws with teeth and tough penalties that
act as a deterrent for those who send spam
by falsified means,” he added. ITW
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40
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© eWeek USA 2004
was speaking to a programmer
friend at the weekend, who
described a less-than-satisfactory
outsourcing project currently
underway at his organisation. The
IT project had been outsourced to
a UK specialist, he said, which had
in turn handed over part of the
work to an offshore facility.
All fine in theory – but unfortunately not in practice. My friend
went on to explain that the work
coming back was of such poor
quality that his organisation had
drafted in other external contractors to sort it out.
The situation he described
echoed a recent story about a programmer in the US. This particular
individual claimed to have outsourced the bulk of his $67,000
programming job to a developer in
I