Say "Uncle"

The government is increasingly enlisting businesses to help fight terrorism, drug counterfeiting, and fraud. This means getting airlines, drug companies, financial service providers, defense department contractors, and telecommunication companies to invest in technology, the right technology. My December 13 feature entitled "Uncle Sam's Guiding Hand" addresses this issue in depth, but here's a preview of some key issues.One way to gauge the impact of government regulation on IT is to see just how much more aware CIOs are of regulation today than they were a decade ago, when they relied mostly on their company's legal departments to keep abreast of government mandates, says Ken Horner, Deloitte Consulting's U.S. IT Strategy Practice Leader. "Some CIOs are in a sense asking for legal departments to dedicate staff specifically to monitoring regulation that affects IT function," he says.

The government's attempts to exert unusually high influence over businesses are understandable in a security-conscious post-9/11 world. "The increase in regulatory mandates directed at businesses is directly related to the idea that government feels that by getting more personal information about people, they can stop terrorist attacks," says Ari Schwartz, associate director of the Center for Democracy and Technology.

But what's ostensibly good for national security isn't necessarily good for business. "In fact, this is clearly bad for business," Schwartz says. "They're asking for businesses to turn over data about their customers, and risk having their brand associated with that behavior."

Successful navigation of industry-specific mandates will depend upon how well companies balance their customer confidentiality commitments with their national security obligations. Although the government ultimately has the final word, businesses are not without recourse. It's beneficial for businesses to let government know the costs of compliance and voice their thoughts on what constitutes reasonable deadlines.

Please share your thoughts.