When outsourcing, don't forget security, experts say

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September 21, 2004 (IDG News Service) -- When it comes to outsourcing IT operations to countries such as India and China, companies often focus on slashing costs and gaining productivity but fail to take into account cultural differences that may affect their security, according to experts attending the Gartner IT Security Summit in London today.
"India is seen as an answer when outsourcing applications but is actually a problem in the security space," said Gartner India research vice president Partha Iyengar while moderating a panel on offshoring security.
At issue is not so much the security that outsourcing service providers use to protect companies' systems -- such as firewalls and data backup -- as it is the cultural differences, Iyengar said. For instance, standards of privacy are often looser in India because it's a close-knit society where, say, reading someone else's e-mail wouldn't be considered much of an intrusion, Iyengar said.
This more relaxed attitude toward privacy could have serious consequences when it comes to protecting corporate data, experts on the panel warned. Companies that outsource operations overseas are advised to train local staff to adhere to the company's global privacy standards and to check into the risk of government interception of sensitive confidential information.
"Fifty percent of companies understand that there are security issues with offshoring, but the real issues are cultural and in compliance and regulation," said Lawrence Lerner, senior technical architect of the Advanced Solutions Group at Cognizant Technology Solutions Corp.
Lerner said his company advises its clients to document its processes when outsourcing and get all parties involved to sign off on procedures to ensure transparency. He also suggests performing background checks on local staff.
As a result of high demand by Western companies looking to reduce costs, some outsourcing service providers in India and China are growing rapidly, hiring thousands of new employees in a month."When you are hiring 5,000 people at a time, you need to make sure that they all adhere to the same standards," Lerner said.
R.K. Raghavan, consulting adviser on security at Tata Consultancy Services Ltd., one of India's largest IT services companies, said his firm is feeling the effects of these client demands. "We are bending over backward on security, primarily to cater to our U.S. customers, which are a huge part of our market," Raghavan said.
Tata has recently changed the way in which it performs background checks on potential employees amid volume hiring and increased customer demands.
Previously, the company required two references from each applicant as a security measure but did not ensure that the applicant had no criminal record. Furthermore, the company found that fingerprinting is considered offensive in the Indian culture, Raghavan said.

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