THE MAGAZINE

Out of Sight, Out of Mind

By Peter Piazza

Almost one-third of companies outsource application-development tasks, as well as Web-site development and management, according to a new survey of 744 organizations carried out by Enterprise Systems, a provider of business and technology information for IT managers.

Of those that use outsourcing, more than 40 percent outsource to companies in foreign countries, particularly India. Nearly 11 percent outsource help-desk functions, with 28.1 percent of these to near-shore or offshore providers.

All of these functions have the potential of exposing sensitive corporate or customer information. Companies may be saving money by outsourcing these functions, says Ron Knode, global director of security architecture and design engineering at Computer Sciences Corporation, but they need to be aware of the risks involved in outsourcing overseas; in particular, the loss of intellectual property.

"The advice we give is that you ratchet up your due diligence to begin to compensate for the cultural and legal differences that you will inevitably find," Knode says. A physical inspection of the partner's facility is mandatory, he says, as are rules for employee screening and a way to validate that rules and procedures are being followed. Knode adds that while outsourcing can be cost effective, budgets for teleconferencing and overseas visits need to be increased.

@ Outsourcing: Who, Where, and Why? The 2004 Enterprise Strategies Outsourcing Survey is available a SM Online

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