Risky business?

Although 88% of FTSE-100 companies are covered by specialist software assurance scheme Escrow, the majority of smaller companies take an unnecessary risk by not doing so.

And the responsibility lies with the finance director, says Rob Cotton, director of the NCC Group’s Escrow Solutions business. ‘Most good FDs wouldn’t let the IT department do it. It should fall under the finance departments banner.’

He says the problems lie with ‘inertia’. Many companies will only get a new software rollout 95% done. Although Escrow may have been talked about at some point it is often overlooked after a new rollout is physically installed.

Dave Anstey, technical director at accounting software company SquareSum, agrees Escrow is often overlooked, and believes the IT department is usually the one pushing for it. ‘Ultimately it will be the finance department which decides not to go ahead due to cost issues,’ he says. ‘Smaller companies will often try and sweep the issue under the carpet which is extremely foolish.’

Although Escrow is not particularly expensive, Anstey is doubtful over its usefulness. ‘It’s fair enough to say it is cheap,’ he says. ‘But what good does it do? In the end all you get is a CD containing source code. It is then up to you to install and implement it which is the expensive bit.’

SquareSum has an Escrow agreement which means it has to lodge its software with NCC. Application software source code is then put on a CD, stored and updated at least once a year. Cotton says SMEs are more than happy to spend £100,000 on an accountancy software application but won’t think about assurance.

But Anstey says it might be easier for SMEs – which don’t typically have a huge IT department – to simply swap suppliers and take the risk, rather than investing in Escrow.