Many people don't even know that companies like Ruesch International exist, but its services are a very critical piece of every global company's operations and how they manage their assets. Ruesch specializes in business-to-business cross-border payments, basically supplying various payment instruments and foreign currencies for companies that need to pay their bills in various countries around the world. On behalf of its 30,000 corporate clients, Ruesch will make about 600,000 payments, each averaging about $27,000 (with a total value of between $8 - $10 billion dollars) during this fiscal year.
Obviously, Ruesch must keep up with the various banking and other regulations in each country, as well as local customs regarding bank routing numbers, encoding schemes and how checks can be cleared. More than a foreign exchange organization or bank, Ruesch provides added value to its clients, making them aware of market information so that they can make informed choices in managing their risk. "Any time you have a large sum of money that needs to be converted to a foreign currency, there is a certain element of risk involved," explains Ron Szoc, Senior Vice President and CIO of Ruesch International. "Currency prices relative to other countries fluctuate more than the stock exchange. The price of Euro may change something like 18,000 times a day." Ruesch advises its clients so that they can make good, efficient use of their capital, as opposed to buying foreign currency blindly.
Many of the transactions flowing through Ruesch are electronic since the company established an eCommerce site in 1999. Szoc says his company designed the Web site and its functionality, but there are critical components -- such as security measures -- that are outsourced.
More than Bells and Whistles
Like a number of companies these days, which think through what their core competencies are and what they really should be doing, Ruesch determined it should outsource anything that is not core. "Ultimately our real business is risk management. We help our clients manage their foreign exposure to risk," says Szoc. "So anything else we do to achieve those goals is up for outsourcing. Ruesch selected Baltimore Technologies PLC to host its server in a secure facility and to implement public key infrastructure (PKI) security from digital certificates. "We outsourced because we don't need to create security -- just manage it," he says. "Baltimore does the heavy lifting, and we supervise."
The goal was to be able to control how Ruesch's clients access the Web site, so it decided to issue digital Certificates of Authority to its clients. The scope of their three-year agreement, which began in January 1999, provides for Baltimore to host the site, provide the digital certificates in quantity, and troubleshoot or fix problems. The Certificates of Authority are then issued to Ruesch clients from Ruesch, protecting its branding. There were start-up costs of approximately $75,000 - $100,000, and ongoing service is based on a monthly hosting fee of $2800.
Ruesch selected Baltimore, first of all, because "their hosting security is as safe as Fort Knox," acccording to Szoc. He says he also believed his company would get more attention from a smaller vendor. That would be very important, because Ruesch had a learning curve regarding digital certificates and security. As soon as they began to deploy the certificates among Ruesch clients, a number of issues popped up.
"Digital Certificates are sort of another piece of software that has to operate within a whole PC environment with lots of other drivers and software already attached," he explains. "We ran into problems with clients using MACs, people trying to get in using AOL, and problems with the way different browsers send information back and forth across the Web." He says Baltimore was extremely good at working out all of the problems and "really bent over backwards to help us." The supplier even provided people to conduct sessions with Ruesch and then with its clients, "and their master debugging guy sat with us for four days to help us handle calls. That behavior on their part was above and beyond duty," Szoc says.
Baltimore also helped with Ruesch's knowledge gap in Internet security. The digital Certificates of Authority provide authentication to Ruesch that the end user is actually who it claims to be, and it also offers nonrepudiation of the financial transactions. But Szoc describes his compan˝'s approach to digital certificates as "essentially naÔve. We didn't know what we were getting into. We thought it was like copying a file. We didn't realize how difficult it would be to implement Digital Certificates. Had we known what we do now, we would have done more beta testing with our clients and digital certificates so that there would be fewer problems." Nevertheless, the Baltimore Technologies crew has delivered outstanding, high-quality service and helped them over those challenges.
Alive and Well
In this outsourcing relationship, the buyer purchased a product (the digital certificates) and eCommerce services (hosting). Since the site was launched successfully, the buyer's management of the ongoing relationship is a simple matter of whether everything is working or something is failing. Szoc says Baltimore is excellent at troubleshooting and, if there are problems, they deal with them right away.
Baltimore, however, has fostered a growing relationship, and Szoc says the supplier even helps to promote branding of Ruesch by sponsoring the company's appearances at conferences. They're now on the threshold of a new frontier together. Ruesch is going to implement secure, encrypted, digitally signed email for transactions with its clients. "Even with email communication," he explains, "we want to make sure that the email from our clients is authenticated and validated. We are adamant about security because we are regulated by many governing bodies around the world. We have a fiduciary responsibility to our clients." Baltimore Technologies will be the partner who ensures that security.
Lessons from the Outsourcing Primer:
- For eCommerce services, it is best to choose a supplier that will be able to give adequate time and attention to helping the buyer with its lack of knowledge about security and other important components of doing business over the Internet.
- In a Web hosting situation, there will not be much interaction between buyer and supplier on an ongoing basis after the site is launched. Even so, both parties may want to explore further opportunities for working together.