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Commentary

Stop Identity Theft; Send Your Data Offshore

Opponents of offshore outsourcing are quick to seize on events that show the practice in a risky light. Their most recent exhibit A: a British tabloid reporter arranged to illegally purchase sensitive customer data from an Indian business-process-outsourcing worker for about $5.00 per name. Yet here in the United States, we don't need to go to such lengths to obtain the raw material for identity theft--we can just wait for it to
June 27, 2005
Opponents of offshore outsourcing are quick to seize on events that show the practice in a risky light. Their most recent exhibit A: a British tabloid reporter arranged to illegally purchase sensitive customer data from an Indian business-process-outsourcing worker for about $5.00 per name. Yet here in the United States, we don't need to go to such lengths to obtain the raw material for identity theft--we can just wait for it to fall off the back of a truck.The Sun's report sent offshoring's many detractors into instant "I told you so," mode. "I told you outsourcing is risky." "I told you it invites data theft." "I told you your greed would come back to bite you."

What the anti-outsourcing crowd doesn't want to acknowledge, however, is that reports of fraud in India grab headlines precisely because they are rare. Western companies send more than $2 billion worth of BPO work--along with all the associated customer files--to India each year, yet instances of serious security breaches are few and far between.

In fact, one could argue that companies that are truly concerned about data security should load their customer information onto the next FedEx flight out of the country, rather than have it lie around here--where the likes of Choicepoint Inc., CardSystems Solutions, or Iron Mountain can get their butterfingers on it.

Empirical numbers are tough to come by, but there's every reason to believe that, overall, the art of securing data in India is more advanced than it is in the West for a very simple reason: A series of security breaches in India like those that occurred here would bring down not just a few companies, but the country's entire tech-and-services economy.

That's why, for instance, many Indian BPO firms prohibit workers from bringing any writing tools or devices of any kind into a call center, and employ only dumb terminals that lack hard drives and printing functions. For some Western companies, just locking the doors at night seems to be a problem.