Offshore Outsourcing in Turbulent Times

The United States’ war on terrorism has had little effect so far on companies’ offshore outsourcing decisions, but CIOs continue to beef up business continuity plans for their offshore operations.

Tandy Gold, a former offshore program manager for a large Northeast bank and founder of an offshore interest group of Fortune 100 companies, says IT executives are monitoring security very closely. But for the most part, it still is business as usual.

“Experienced offshore managers will tell you that 9/11 happened here, not in India. So the days of associating safety with geography are behind us,” Gold says. The key, she adds, is knowing up front how to manage risk and understanding that cities in India have different levels of stability. Most large companies “have sophisticated redundancies. One financial services firm has data moved regularly in three places across India as well as another three in Europe,” she says.

Tensions between India and Pakistan caused a delay in some deals, says Meta Group analyst Dean Davison, adding that the conflict forced some offshore vendors to bolster their disaster recovery plans. That could happen again. (Leaders for both nations said in May that they would improve relations.)