Code theft and other recent security breaches at popular outsourcing destinations such as India has turned a spotlight on selecting the best offshoring destinations to ensure high levels of data protection.
Potential cost savings for Australian organizations makes offshoring impossible to ignore, but most companies don't want to make a trade-off when it comes to securing data.
According to Gartner, the safest offshoring havens are Ireland, Canada and New Zealand but users will not get the same level of cost savings that they may get with less-secure destinations such as Russia and China.
Gartner VP of research, Partha Iyengar, said the security exposure that both clients and service providers have to deal with as global sourcing becomes more strategic and complex increases by order of magnitude.
"Service providers are unable to provide standard security solutions because regulations, legislation and risk vary vastly between industries and geographies," Iyengar said.
But, he said, India is taking steps to improve security with the trade association National Association of Software and Services Companies (Nasscom) launching security certifications in conjunction with the Indian government for member companies.
The Nasscom security analysis, obtained by Computerworld stipulates that a secure and reliable environment defined by strong copyright, IT and cyber laws is an imperative for the growth and future success of Indian information technology services and business process outsourcing sectors, as is adhering to international best practices, getting procedures audited by independent parties and ensuring that these procedures are up to date.
For example, independent testing firm Access Testing provides hardware and software, performance and system build testing for offshored services completed by Indian-based firm Satyam.
Access Testing CEO Tony Bailey tests and validates work before it is deployed in Australia and said the work and general data security is of an extremely high standard. When companies outsource chaotic process to be redefined and rebuilt, issues with security occur, he said.
"The issue is getting Australia up to standard, but only when organizations have their own systems well defined and working at a level should they be capable of offshoring -if chaos is offshored then you will end up with greater chaos," Bailey said.
"The stability of the economy is relevant, as are issues around political tensions, but it has not impacted any work so far. Satyam is good at recognizing what clients want and good at adapting to conditions and there is no difference between using them as an outsourcer to IBM or Accenture, all have huge bases here, economic and political conditions are as relevant to IBM as they are to Satyam."