[IP] Outsourced and Out of Control
Inside Risks 164, CACM 47, 2, February 2004
Outsourced and Out of Control
Lauren Weinstein
Outsourcing (farming out production or other work) is not new. But when
advanced technologies such as telecommunications and computing are applied
to outsourcing, along with vast differences in pay around the world, the
results can be unfair, unwise, alarming, and even dangerous. While
frequently providing significant "productivity" enhancements, the
associated negative risks include domestic unemployment and
underemployment; privacy, security, and reliability concerns; and other
serious problems.
In the past, the outsourcing of manufacturing jobs has been qualitatively
different from the very broad and rapidly expanding sort of outsourcing
we're seeing today. Most of the vast range of jobs now being exported to
inexpensive foreign labor markets from "higher-wage" countries would be
impractical to outsource in such a manner without today's inexpensively
accessed communications and data infrastructures.
Improved corporate bottom lines are often cited to justify outsourcing. But
the devastating impact of lost domestic employee positions cannot
reasonably be ignored. Former employees are understandably bitter when
their jobs are outsourced to foreign workers being paid only a small
fraction of domestic wages. In at least one case, a company has used the
threat of outsourcing to demand that their local employees accept basically
the same low wages as foreign workers.
The ability to cheaply communicate across the globe via voice and data
networks has permitted vast outsourcing of customer service, health-care
transcription and medical information processing, financial and systems
analysis, software development, and many other extremely technical and
sophisticated tasks. Highly skilled domestic workers, including many who
probably have read this column on a regular basis, have seen their
livelihoods lost to technologically enabled outsourcing and are now
competing with teenagers for low-pay, unskilled jobs.
As more customer-support call centers move to non-domestic locations,
complaints from consumers about poor service rise. In many cases,
language-related barriers cause communications difficulties. Computer
manufacturer Dell, Inc. recently announced it would cease using its
India-based call centers for corporate customers due to such complaints.
However, ordinary non-corporate Dell consumers may still find themselves
routed to offshore customer service representatives. (See
<http://callcenterinindia.blogspot.com>callcenterinindia.blogspot.com for
illuminating information about India-based call centers.)
Large-scale outsourcing is growing at a frenetic pace around the globe.
Many outsourced jobs involve countries where significant privacy laws do
not exist; even if those laws are improved under pressure of potential lost
business, effective enforcement would still appear to be highly
problematic. Customer service outsourcing can give risky access to data
such as names, addresses, Social Security numbers, telephone call records,
and medical information. Recently, a Pakistani subcontract worker
threatened to post U.S. patients' medical data on the Web if claimed back
pay was not forthcoming.
Software, sometimes of a critical nature, is now routinely subcontracted to
foreign outsourced environments, bringing risks of development
miscommunication or worse. The U.S. General Accounting Office noted the
possibility of malicious changes to code since significant U.S. air traffic
control system Y2K work had been subcontracted outside the U.S. without
mandated background checks.
There are even moves to outsource computer system administration to foreign
centers, often in countries with poor (if any) computer security laws,
creating the possibility of massive abuse of domestic systems by distant
persons who could be difficult or impossible to effectively prosecute.
Thanks to subcontracting, you might not even know that the company managing
your system is using such facilities and personnel.
There are many fine workers performing outsourced tasks around the world.
Yet, it is more difficult to maintain control over customer information,
security, development, and other critical issues, when work is performed
distantly or under completely different laws. The opportunities for errors,
mischief, and serious misdeeds are alarming, to say the least. Businesses
and governments need to carefully consider the manners in which outsourcing
can be reasonably exploited, and how it must be controlled.
--Lauren--
Lauren Weinstein
<mailto:lauren@xxxxxxxx>lauren@xxxxxxxx or
<mailto:lauren@xxxxxxxxxx>lauren@xxxxxxxxxx or
<mailto:lauren@xxxxxxxxxxxxxxxx>lauren@xxxxxxxxxxxxxxxx
Tel: +1 (818) 225-2800
Co-Founder, PFIR - People For Internet Responsibility -
<http://www.pfir.org>http://www.pfir.org
Co-Founder, URIICA - Union for Representative International Internet
Cooperation and Analysis - <http://www.uriica.org>www.uriica.org
Moderator, PRIVACY Forum - <http://www.vortex.com>http://www.vortex.com
Member, ACM Committee on Computers and Public Policy
<http://www.pfir.org/lauren>http://www.pfir.org/lauren
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