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ACCA Strategic Professional · Strategic Business Leader · Cloud, mobile and smart technology

Orion Retail migrated its customer database to a software-as-a-service provider. Two years later the provider doubles its prices, and Orion finds that exporting its data into another provider's system would take many months because of proprietary formats. Which response BEST reflects good risk management that should have been applied before adoption?

Orion should have assessed exit strategy and data portability during due diligence and written them into the contract and service level agreement. This mitigates vendor lock-in. Risk cannot simply be transferred wholly to the supplier, and avoiding all outsourcing would sacrifice the benefits of cloud.

  1. AAccept the risk since cloud contracts always favour the customer
  2. BInsist that the provider carries all residual business risk through its terms of service
  3. CAvoid all outsourcing of IT services in future
  4. DAssess exit strategy and data portability in due diligence and negotiate these into the contract and service level agreementCorrect

Explanation

Vendor lock-in is mitigated by assessing portability, standard data formats and exit clauses before signing. Risk cannot be wholly transferred to the supplier, and avoiding all outsourcing forgoes benefits disproportionately.

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