Offshoring: Is the dream over?
Published: 27 Apr 2005 11:55 BST
According to a Merrill Lynch report, security fears are the main reason US CIOs aren't moving IT work offshore faster: The "key inhibitor preventing companies (from using) offshore outsourcing remains data security," the report says.
Earlier this month, news broke that police in India arrested three former Mphasis call centre employees who allegedly stole customers' personal account information and transferred about $350,000 to fake accounts in Pune. Among other people arrested in the case was a current Mphasis call centre worker, says Mphasis Vice Chairman Jeroen Tas. He says the perpetrators may have persuaded bank customers to disclose their account details, including PINs.
Mphasis was bullish about their security procedures when news broke about the theft and subsequent arrests, saying: "The initial investigations reveal that Mphasis' security procedures in fact worked and the fraud could not have been prevented as some gullible customers have parted with their passwords/pass-codes carelessly. The accused individuals had no prior criminal record and passed all reference checks."
A Times of India story cited unnamed sources in pegging Citibank as the bank in question. Citibank did not return a call requesting comment. Mphasis declined to comment on the identity of the bank. Mphasis, which has operations in India, China and Mexico, is led by former Citibank executives.
The Indian arrests come during a period of heightened anxiety about data security and identity theft.
In one of the latest examples, LexisNexis revealed that an intrusion into its Seisint databases may have compromised personal information on about 310,000 Americans, a tenfold increase on a previous estimate.
In 2003, the San Francisco Chronicle reported allegations that a woman in Pakistan doing clerical work for the University of California at San Francisco Medical Centre had threatened to post patients' confidential files online unless she was paid more money.
But most of the criticism of offshoring has focused on other matters, such as service quality and communication problems.
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Reading Mr.McCarthy's comment in the last line in... Pradeep S Gururajachar
