Offshore Outsourcing and Privacy Threats

Saturday, December 24, 2005

Offshore Outsourcing process involves the high data privacy risks and also involves the complexity of managing this risk. So to work in the smarter way companies need to make it sure that the vendors offshore, contractually tied to some specific terms and conditions related to data transmition, storage and use.

It is marked that the use of the Offshore Outsourcing process has grown dramatically in the past few years because of the service flexibility offered by lots of IT companies and the view of lowering the project costs. But at the same time, consumers have also become more anxious about privacy, and the misuse of personal data. Lots of instances of fraud are also appearing in the deals of Offshoring. As a result, companies need to ensure that overseas vendors are contractually tied to specific conditions regarding how data is transmitted, accessed, used, stored, and shared by the vendors. Data protection and access process and regulatory compliance with proper monitoring of the process of Offshore Outsourcing are also to be taken care of.

In Offshore Outsourcing, financial services and related data may create new risks compare to the domestic outsourcing services. Country and political risks are also involved in the process of Offshoring. Other risks like Operations/Transaction risk, strategic risk, Credit risk, Compliance risk and many more risks are involved in Offshoring services. The actions like breach of contract or security are difficult to find and deal with by the regulatory compliance at anyone’s point of stand. Categorizing is also attempted when the data is sent overseas for project purpose. It is also true that without knowing what your data is, you will not come to know that what type of protection you need to apply as there might be the range of different data’s in the process of Offshore Outsourcing.

Offshore Outsourcing

In Offshore Outsourcing, the risks of privacy also vary by the type of the jobs. Activity with higher risks include any function using personal data, like call centers and change process, while lower-risk activities might include application development or source-coding risks. It is also important that the companies understand their own legal criteria’s and need to check whether their vendors meet these criteria’s or not. One more difficult task is to find out whether the data is misused or not in Offshore Outsourcing.

In Offshore Outsourcing, any country’s laws regarding data privacy and legal systems are also very important and make lots of differences. Because many countries having a large business of Outsourcing has no particular laws to protect this process. While making the contract, privacy issues must be taken under great consideration to avoid or lessen these issues in the process of Offshore Outsourcing.