Offshore outsourcing might be a good economic decision for some organizations based on lower labor costs. But make sure you carefully consider the security risks of the decision. Regulations such as the Health Insurance Portability and Accountability Act, Gramm- Leach-Bliley Act and California's SB 1386 require companies to protect privacy and impose stiff financial or disclosure penalties if they do not. Such regulations apply equally to data owners and out-sourcers within the U.S., but not necessarily to outsourcers in China or India, which are relatively regulatory-free jurisdictions. Investigate these IT-related regulatory issues with your legal department.
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