Offshore outsourcing of various company functions is becoming
more and more prevalent. It poses various benefits and risks for the
company, but adequate protections must be taken to insure the
privacy of customers and other sensitive company information.
Outsourcing is contracting out a specific task or operation to a third
party for a significant period of time. Offshore outsourcing is
outsourcing that is contracted to companies and individuals that are
outside of the United States. It is typically done to reduce costs or
improve efficiency, specifically in the area of labor and can requires
the sharing of customer
information, or proprietary company information. However, the irony
is that the cost reduction comes at a price. Outsourcing requires
constant oversight, assessment of security risks, and a possible
negative public relations impact (Bucki, 2018). There is no guarantee
that the company that is outsourced to, will work with the same
principals, mission, or drive as your company. Typically, they will be
driven by the profit that they are receiving from providing the service
to you (Bucki, 2019). Therefore, a company that is outsourcing must
remain diligent to reducing these risks. There needs to be an
adequate assessment of the
provider company's internal controls as part of the overall assessment
of the main company's internal controls. There also needs to be
adequate security regarding computer, and customer information.
Technical, physical and administrative levels of security need to be
understood, addressed, and documented to ensure against
information theft or sale. The company that is utilizing the
outsourcing must be aware that it is still their responsibility to
safeguard the information that they are in charge of, and that the
company that they are outsourcing to is just an extension of
themselves in that respect.
References
Bucki, J. (2018). The Advantages and Disadvantages of outsourcing in
Business. The Balance
Small Business. Retrieved from
https://www.thebalancesmb.com/what-is-outsourcing-2533662
Bucki J. (2019). Pros and Cons of Outsourcing, Is outsourcing right for
your company> The
Balance Small Business. Retrieved from
https://www.thebalancesmb.com/top-6-outsourcing-disadvantages-
253378
