Wednesday, February 29, 2012

Global Increase in Outsourcing Leaves Companies Open to Information Security Breaches

Companies must find ways to manage the benefits and risks of outsourcing as almost two-thirds of Information Technology (IT) infrastructure is predicted to be outsourced within the next 8 years. EC-Council CISO Summit panel discussion suggests that increased information security compliance plans, continuous education, and knowledge sharing may prove to be the best solution.

Global economic troubles have motivated many companies to seek alternative means of conducting business that will cut costs and maximize profits. One of the most popular and effective methods is outsourcing Information Security (IS) infrastructure. According to a recent study commissioned by Savvis, Inc. this number is predicted to increase from 17% to over 64% globally by 2020. Security outsourcing has its benefits; however, it also comes with an array of risks.

The challenges of outsourcing are similar to those you may have with the acquisition (insourcing) process. When acquiring a new company you need to ensure that due diligence has been completed prior to acquisition and integration, as you now will be responsible for the security of that company’s data. This is the same with outsourcing,” said Tutton. “Hire a trusted and qualified third party to complete a thorough evaluation of the outsourcing company. But don’t just stop there, put in place methods and controls to monitor and maintain the security of this data during the entire lifecycle. Trust but verify, and assign responsibility to a qualified person within your organization to manage and maintain oversight of security. Another option is to outsource only the data and systems that you want to end up in the public domain.”

Tutton’s panel discussion presented a detailed overview of the benefits and challenges of outsourcing in respect to Information Security (IS). Globally, over 60% of organizations cite that managing the IT infrastructure domestically does not have any competitive advantages and are planning to move operations offshore. However, many offshore companies do not have the same legal restrictions as the United States. For instance, India, one of the biggest destinations for offshore outsourcing, does not have any data privacy laws. This lax in law enforcement leaves confidential information vulnerable to security breaches.

Last year, Epsilon, a cloud-based email service provider, suffered a security breach that landed up affecting around 75 clients and compromised over 60 million personal names and email addresses. Security breaches such as this can be extremely costly and detrimental to a company’s reputation.

“If an organization is looking to do a large infrastructure outsourcing engagement, the best way to ensure that security is a priority is to build a comprehensive list of security requirements into outsourcing contracts, develop appropriate service level agreements and reporting mechanisms to evaluate security and budget for a review by an independent assessment organization – this will ensure that security always stays top of mind,” said panel speaker Chris Oglesby. “If, however, the decision is to outsource infrastructure and security separately then the security operations should drive the direction and outcomes and create independence between the organizations to meet the client needs.”