Daniel Alsén, chief information officer at online gambling operator Unibet, knows the benefits to be had from hedging his bets. So while he’s well aware of the potential for operational improvements and reducing costs, he uses multiple offshore locations to mitigate risk.

“There is no silver bullet for offshoring. We look at every IT strategy and map the opportunity related to that. By having multiple partners operating offshore we don’t have all our eggs in one basket,” says Alsén.

The strategy means that Unibet is not held hostage to currency fluctuations or spiralling labour costs.

“We keep an eye on the currency situation of any country in which we operate to reduce the risk of exposure to any one currency,” says Alsén. This approach also allows Unibet to change the mixture of its offshoring teams if wage rates rise sharply in any given geography, he adds.

But this approach does entail additional management effort. Unibet has a dedicated procurement and sourcing manager who focuses on how currency prices affect costs and when to quickly ramp up and down teams of offshore workers.

“We keep contracts as short as possible – some are one month or three,” he says. Alongside those short contracts, Unibet has longer-term commitments, such as an infrastructure services deal it recently signed with Indian company Tata Consultancy Services (TCS).

“We need around-the-clock support for our applications and we didn’t have full coverage or sufficient monitoring. If we have downtime, we lose money so our relationship with TCS is very important,” says Alsén.

After choosing TCS based on its track record, attitude and site visits to Ahmedabad, Unibet took a cautious approach, offshoring on a small scale in February 2008 and building on each success. Monitoring of infrastructure services was the first area of operations to go offshore.

“We adopted a conservative approach, starting 100 per cent onsite – TCS employees worked with us as part of a team and we built up a relationship with the management until we were confident enough to offshore. We moved to offshoring the service desk and worked through to offshoring the more complex elements such as the network operations,” says Alsén.

The management and development of core IT operations remain in Unibet’s London and Stockholm offices, however.

Given the security concerns inherent in running a gambling business with up to five million customers worldwide, Unibet vets offshore personnel, uses encryption and strict access control to sensitive data.

“We run our business as if it were a bank as we work with money. We analyse each project’s viability for offshoring, and security is a key factor,” says Alsén.