Choicepoint
Introduction
Based in Alpharetta, Georgia, ChoicePoint was formerly a struggling insurance services unit of Equifax. Derek Smith successfully trimmed its labor-intensive operations and replaced them with technologically based ones, which resulted in both higher growth and higher margins. This allowed the company to spin off from Equifax and become publicly traded in 1997.
The company’s initial focus was data services for the insurance industry. As its business matured and expanded, ChoicePoint also entered into non-insurance markets and was able to consolidate fragmented industries through acquisition and integration.
ChoicePoint tapped various public and private sources to gather data, assembled it into proprietary databases, and sold products primarily to Fortune 1000 companies, but also smaller businesses, law firms, private investigators, law enforcement, and individuals.
Their services included: background checks and drug testing on job applicants, personal public records, and background checks on service providers.
Issue Statement
The company recently faced lawsuits and industry criticisms due to the inaccuracy, breach, and misuse of personal data. As the growing concerns about security and privacy issues of the data industry loom, some new stricter regulations and laws are likely to be passed, that may threaten the company’s profit and future.
In the sections below, we will discuss those issues and industry’s critics as well as their legitimacies. We will also give recommendations and advice to CEO Derek Smith about how to overcome the issues and address the concerns to ensure ChoicePoint will remain a trusted data resource that provides value and convenience to businesses and individuals.
Case Analysis
Even with all of ChoicePoint’s accomplishments and useful services they provided, the company had its fair share of critics. Our analysis is based this criticism of ChoicePoint and the data brokerage industry in general. With the
Based in Alpharetta, Georgia, ChoicePoint was formerly a struggling insurance services unit of Equifax. Derek Smith successfully trimmed its labor-intensive operations and replaced them with technologically based ones, which resulted in both higher growth and higher margins. This allowed the company to spin off from Equifax and become publicly traded in 1997.
The company’s initial focus was data services for the insurance industry. As its business matured and expanded, ChoicePoint also entered into non-insurance markets and was able to consolidate fragmented industries through acquisition and integration.
ChoicePoint tapped various public and private sources to gather data, assembled it into proprietary databases, and sold products primarily to Fortune 1000 companies, but also smaller businesses, law firms, private investigators, law enforcement, and individuals.
Their services included: background checks and drug testing on job applicants, personal public records, and background checks on service providers.
Issue Statement
The company recently faced lawsuits and industry criticisms due to the inaccuracy, breach, and misuse of personal data. As the growing concerns about security and privacy issues of the data industry loom, some new stricter regulations and laws are likely to be passed, that may threaten the company’s profit and future.
In the sections below, we will discuss those issues and industry’s critics as well as their legitimacies. We will also give recommendations and advice to CEO Derek Smith about how to overcome the issues and address the concerns to ensure ChoicePoint will remain a trusted data resource that provides value and convenience to businesses and individuals.
Case Analysis
Even with all of ChoicePoint’s accomplishments and useful services they provided, the company had its fair share of critics. Our analysis is based this criticism of ChoicePoint and the data brokerage industry in general. With the
Cited: Dutta, Amitava; McCrohan, Kevin. “Management’s Role in Information Security in a Cyber Economy.” 2008. ISM5021 Class Reading Assignment. Paine, Lynn; Phillips, Zack. “ChoicePoint (A).” Harvard Business School. 2006. President and Fellows of Harvard College. Boston. Thiel, Simon. “Reed Elsevier to Buy ChoicePoint for $3.5 Billion.” Bloomberg.com. 2008. Bloomberg L.P. http://www.bloomberg.com/apps/news?pid=20601102&sid=ar7q6M79l5i0&refer=uk.