09 November 2004

Business Process Outsourcing: A Real Threat to Security or IP Theft?

Business Process Outsourcing is a hot issue and as this article by The Heritage Foundation so clearly states:

Defending the nation against terrorists, promoting economic growth, and protecting constitutional lib­erties are all prerequisites for a sound homeland security strategy. At one time or another, outsourc­ing[1] has been labeled a threat to all three. These crit­icisms are simply overblown. In fact, if the U.S. partners with nations that share a commitment to the rule of law, transparency, and open competition, it can use sensible outsourcing to enhance the protec­tion of the privacy of American citizens, promote better security practices, and contribute to economic prosperity. Effective outsourcing can provide both cost-effective services and appropriate protections for government and commercial activities supported by overseas vendors.

Now if you talk with the major U.S. technology companies who have outsourced operations in India and China they will tell you their nightmares. Intellectual Property theft is running rampant and the laws and trade representative sanctions will be hard pressed to make major changes in the near term. The security of the nation is not going to be compromised by these organizations and the real loss events will occur when their source code is posted on the Internet.


The goal of increasing domestic security and protecting the privacy of U.S. citizens should not be an obstacle to strengthening economic ties with the developing world. Rather, market forces and sensible outsourcing can be used both to promote better global security practices and to encourage economic growth.

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