IDC: Security Isn't A Barrier to Offshore Outsourcing

IDC surveyed 30 top U.S. companies about their experiences in leveraging an offshore business model.

September 30, 2004 — CSO — There's always something to worry about. Like offshore outsourcing, for instance. U.S. companies have turned to offshore outsourcing firms in recent years as an affordable way to tap pools of skilled software developers in countries such as India, Russia and China. But moving sensitive development, design and support work overseas brings with it compliance issues and fears of IP theft.

IDC surveyed 30 top U.S. companies about their experiences in leveraging an offshore business model. Among the top 10 concerns were "unknown legal rights" and "unknown suppliers," says Barry Mason, senior research analyst for the AppSourcing research program at IDC.

Should misconduct surface, U.S. executives are unlikely to find recourse through the legal systems in non-Western countries. "The biggest issues are prevention and prosecution, and that's difficult in a foreign country," Mason says. Still, overall, security was less of a concern among the executives surveyed than practical obstacles to outsourcing such as language, culture and time zone differences, he says.

The keys to successful offshore outsourcing projects are to treat security issues as part of the overall project management, include explicit language about IT and physical security into contracts, and, whenever possible, vet both the outsourcing company and its staff, he says. - Paul Roberts