Information security has become a top concern among US companies evaluating current and potential outsourcing relationships, according to a new study by Booz Allen Hamilton. Further, companies perceive a significantly higher security risk in working with offshore providers over those in the US, due to a lack of trust in legal and regulatory environments in developing countries.
Most survey respondents indicated that security management requirements need to be defined in the contracts and agreements governing outsourcing relationships, with nearly 80 per cent highlighting it as the biggest management challenge in outsourcing. However, the legal and regulatory infrastructure necessary to support the contracts is seen as lacking in key geographies and the study found that only 27 per cent believed that India had a robust legal infrastructure while only five per cent felt the same about China.
North America is perceived to have a healthy legal and regulatory environment by 83 per cent of respondents, followed by Ireland and eastern Europe. Booz Allen surveyed 158 US-based senior executives, focusing on executives in frequently-outsourced functions such as human resources and finance. The survey found that information security is one of the top three most important factors in selecting an outsourcing partner, ahead of financial strength, business stability, and reputation. In fact, 85 per cent of respondents said they may be willing to pay 10-15 per cent more to be ensured of superior security.
Most survey respondents indicated that security management requirements need to be defined in the contracts and agreements governing outsourcing relationships, with nearly 80 per cent highlighting it as the biggest management challenge in outsourcing. However, the legal and regulatory infrastructure necessary to support the contracts is seen as lacking in key geographies and the study found that only 27 per cent believed that India had a robust legal infrastructure while only five per cent felt the same about China.
North America is perceived to have a healthy legal and regulatory environment by 83 per cent of respondents, followed by Ireland and eastern Europe. Booz Allen surveyed 158 US-based senior executives, focusing on executives in frequently-outsourced functions such as human resources and finance. The survey found that information security is one of the top three most important factors in selecting an outsourcing partner, ahead of financial strength, business stability, and reputation. In fact, 85 per cent of respondents said they may be willing to pay 10-15 per cent more to be ensured of superior security.