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With the promise of cheap labor and increased efficiencies, outsourcing of product manufacturing and business processes has become increasingly attractive for a wide range of industries.
In fact, analyst firm Gartner estimates that global spending on offshore outsourcing services will still top $50 billion by 2007—and according to a 2004 Enterprise Systems study, the domestic outsourcing market is 70 percent more. These numbers would be even higher if not for the realistic fear of lost data, intellectual property and business knowledge, as well as the related costs of unwanted international exposure these stories bring.
In most outsourcing situations, organizations need to share sensitive data—much of it valuable intellectual property—with others. Keeping data secure can be extremely difficult when the information is in someone else’s hands, even if those hands belong to a seemingly trusted partner.
Your outsourcing partner, no matter how long and successful the relationship, might have non-secure communications methods (i.e. e-mail, fax, instant messaging or traditional telephone lines) or unsavory employees that don’t value the privacy of your data—or that of your clients—as much as you do.
Consider the following examples of security incidents taking place within some of the fastest growing providers of outsourcing services to U.S. entities:
An Indian call center employee was fired last June after supplying details on British bank accounts, credit cards, passports and drivers’ licenses to an undercover reporter for London’s Sun newspaper for more than $5 a name.
Another call center employee in India was arrested in August for the alleged theft of personal customer information that the firm was handling for its clients. The call center did not reveal the names of its foreign clients, though, according to its Web site, the call center handled work for American and British companies. Among its U.S. clients are a long-distance telecommunications service, a cable and Internet services provider and a food products company
A medical transcriber in Pakistan threatened the University of California San Francisco Medical Center with posting patients’ medical records online in late 2004. The home worker was upset over money she claimed was owed to her by a man who was a subcontractor of the subcontractor who worked for a California firm hired by the hospital. Ironically, the hospital said it wasn’t aware that management of patient records had even been outsourced overseas.
To alleviate the chance of these breaches happening to your organization, you must ensure that those you are partnering with—offshore or domestic—take data security as seriously as you do, especially when financial and personal information or intellectual property are at risk. Importantly, many of the largest outsourcing providers to U.S. organizations—India, China, Philippines, Singapore and Malaysia—still lack any general data-protection laws; HIPAA (Health Insurance Portability and Accountability Act of 1996), for example, a policy protecting personal health information, does not apply in these countries.
So what can you do to enable successful outsourcing relationships without risking your data or intellectual property? Before outsourcing any of your processes or services, consider the following:
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Is keeping your data and intellectual property important—even vital—to your company’s survival?
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Do you have a need for secure communications or conversations with your outsourcing partners?
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Do you send important or confidential documents to people outside your organization?
If you’ve answered yes to the above questions, are the processes in place at both organizations (your company and your outsourcing partner) to maintain the privacy your organization requires? To ensure that answer is “yes” as well, you’ll also need to ask your prospective partner some questions:
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Do you have experienced security specialists within your organization?
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Where does our data reside?
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Who has access to it?
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Is it fully password protected?
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Is it encrypted? What type of encryption?
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How do you communicate the data?
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Are you willing to use secure, IP-based collaboration to facilitate communications and break down cultural barriers before they become an issue?
Having answers to these questions before beginning the relationship can save your organization potentially devastating problems down the road, including a damaged reputation and a lot of embarrassment. Let’s discuss some of the issues involved in ensuring your outsourcing relationship starts out correctly.
Secure Online Collaboration: The What’s and Why’s
In today’s global economy, success depends more than ever on teamwork among outsourcing partners, colleagues, clients and vendors alike. The need for frequent collaboration, plus the wide dispersal of teams, makes in-person meetings generally impractical. Online collaboration enables more work to be done in much less time—at a fraction of the cost.
To ensure the privacy of communications and intellectual property while communicating online, require your employees and those of your outsourcing partner to use secure IP-based collaboration to carry out their projects and everyday work processes that involve your sensitive data.
The best IP-based collaboration tools today offer all of the communications components necessary to help your company communicate securely and efficiently with your outsourcing partners worldwide, without unnecessary travel or international conference call costs.
Ensure the solution you choose allows for fully encrypted data, voice and video communications using the computer and Internet connection already in place, with features such as joint document editing, instant messaging and whiteboarding. In addition, many provide:
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Secure file cabinets, which enable collaboration in real time or offline
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Required permissions and controlled access to information, which further protects intellectual property
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Compliance with government policies such as HIPAA.
These IP-based collaboration tools should boost productivity within your outsourcing relationships, while ensuring that all shared information is completely safe from intrusion—whether from external hackers or internal disgruntled employees.
More Benefits of Online Collaboration: Simplified Project Management
Online collaboration enables what organizations that are outsourcing are looking for: faster time to market and lower overall costs. Constant communications with online collaboration tools help organizations successfully meet project deadlines and cost savings goals.
For example, instant messaging with VIACK’s VIA3 Assured Collaboration Service allows for informal conversations worldwide and either party can immediately start a meeting from an IM session or Microsoft ( News - Alert) ( News - Alert) Office document, helping solve issues or manage projects quickly and efficiently.
You can better manage project timelines and securely enable knowledge transfer using file cabinets to track, edit, collaborate and save documents and projects for ongoing use. They can also hold spontaneous and routine status meetings and share documents or various aspects of projects using whiteboard capabilities.
Using IP-based collaboration also makes it much easier to manage vendor expectations and bridge cultural barriers. Live video lets users see their partner when they need to without time, travel or international conference call costs. Being able to see when the other is online, and instantly communicate with them, enables both parties to open doors to communications and ensure that the projects are proceeding as necessary.
What to Look for in a Secure, Online Collaboration Partner
In this date and time, outsourcing is a given, but as previously discussed, it definitely comes with risks. If you are outsourcing software development, for example, the possibility of losing your intellectual property rights could potentially devastate your business. The chance is especially high if you’re outsourcing partner resides in one of the countries that have an extremely poor track record in respecting intellectual property rights.
So you have the same questions to ask your communications partner as you do your outsourcing partner: Where does the data being communicated reside, how is it transmitted and what control do we have when our data is outside of our firewall?
More than 70 percent of respondents to the 2005 Computer Security Institute/FBI Computer Crime and Security Survey reported that compromised data comes from within their organization or by those trusted by the organization such as outsourcing partners. Because of this threat, ensure that the collaboration tool you use protects the data itself wherever it might be with the highest levels of encryption.
Instead of protecting just the transmission of data with encryption, the tool should also take security one step further by encrypting all of the voice, video and data as well, before it leaves the desktop.
Summing It Up
Enabling best practices by outsourcing may save time and money, but losing any of the proprietary information being shared with your outsourcing partner can be extremely costly. Making sure these partners have strict security policies, procedures and technical safeguards in place – and are willing to use online communications tools that enable encryption – can guarantee that the data shared between your organization and your outsourcing partner is as secure as it can be.
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