For those of you who follow my monthly column, you recognize that I am a proponent of focusing on an organization’s core competencies. I am also a tremendous advocate of technology - everything including CRM, single-point-of-entry and internal metrics reporting. A dilemma facing numerous acquirers (especially ISOs) is that core competencies often reside in sales and marketing techniques, not necessarily in technology. Nevertheless, technology drives, manages and supports our sales and marketing initiatives. For a multitude of acquirers, the solution is the outsourcing of information technology (IT). To gain a better understanding as to why acquirers choose to outsource technology, I spent some time with Som Jagadev of R S Software, an organization that provides outsource technology solutions and software development to the payments industry.
    Jagadev insists that the primary reason for the tremendous growth with IT outsourcing is that acquirers and ISOs can focus more time on their core business while contracting with reliable software development companies for their technology solutions. Acquirers also want to avoid the difficulties in finding and managing IT resources. Likewise, managing the various technologies and systems demands of a company is cumbersome and can create project backlogs. Many organizations outsource projects as a means to offload work from their internal IT staff so they can rapidly deliver more products and solutions. To remain competitive and provide quality service to customers, companies have to keep pace with the ever-changing technology landscape and outsourcing firms keep them on the fast track.
    A good outsourcing company will become a virtual partner with your organization. They can be used to architect, design, develop and implement internal or external reporting packages, processing systems or applications. It is highly recommended that you engage them in the early planning stages of a project, as they can be beneficial in the strategic approach to a problem set. These outsourcing companies can assist with:

• Merchant Boarding (Single Point of Entry)
• Agent Residuals
• Terminal File Building and Management
• Client Relationship Management (CRM) Systems
• Client (Merchant or Partner/Agent) Portals or Information Centers
• Information Reporting and Management Tools
• Payment Gateways
• Authorization or Merchant Accounting Systems
• Gift, Loyalty, ACH and Emerging Payment System

    In the hyper-competitive market of payment processing, no acquirer can do everything. When you find a good outsourcing technology partner you can focus on your core competencies and delegate systems projects or IT initiatives to other organizations that have created core competencies in IT. This efficient use of resource allocation can make you more competitive and increase both your top and bottom lines in the long run. Acquirers that select technology partners wisely and carefully can create a competitive advantage in the marketplace.

Greg Cohen is Senior Vice President, Third Party Services, for Global Payments. You may contact Greg directly at 770-829-8380 or greg.cohen@globalpay.com.