Will new regulations kill outsourcing?

by Urs E. Gattiker on 2011/05/18 · 11 comments 5.729 views

India’s Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011 (i.e. data protection regulation and privacy rules) could have a profound effect on companies that

    – maintain operations in India, or
    – outsource to Indian service providers.
    What are the regulations about?

These regulations apply to all organizations in India that collect and/or use personal data and information, including service providers or intermediaries that collect and process information on behalf of other organizations.

Some of the requirements are very rigorous:

    – a company must get written consent by letter, fax, or email for the collection of data,
    – people can later opt out and withdraw their consent,
    – disclosure of information to third parties is significantly restricted,
    – in cases of data transfer (requires prior consent, whether necessitated by contract or not), companies may only transmit data to organizations with security meeting the new Indian regulations, and
    – people have the right to review and/or correct their data.

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    Bottom line and take-aways

The government of India has issued final privacy regulations that could make outsourcing difficult. The new privacy rules are tougher than the Gramm-Leach-Bliley Actin the US and the EU Directive. Accordingly, complying with US or EU privacy rules will no longer meet the more stringent Indian laws.

Tip: Get more insightful posts from us about privacy regulation, customer engagement, customer relationship management and benchmarking by adding CyTRAP Labs to your search query.

The regulations apply to all personal information, whether belonging to foreigners or Indian nationals. If they are strictly enforced, even handling a benefit-related call from a client in Germany means that written consent must be obtained by the outsourcer from the client before their data can be processed in India.

More resources

Have you adjusted your company’s outsourcing procedures accordingly? Could these regulations slow the outsourcing boom in India? As always, the comments are yours!

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  • http://www.mycomputer2u.com/security/ Network Security Service

     Nice blog. I enjoyed reading
    this article. I need to learn more on this subject.. Thanks for writing this
    nice post.. Anyway, I’m gonna subscribe to your rss feed and I hope you post
    again soon

    • http://commetrics.com/articles/2011-trends-get-better-roi-with-facebook-twitter-and-youtube/ Urs E. Gattiker

      Dear Max

      Thanks for the flowers. I will definitely bring another post soon, this time about the social media audit.  Hope you will comment again.

      Thanks for sharing. 

  • http://www.cloudstaff.com/ Wesley Howard

    Thanks for sharing this outsourcing update. It is indeed helpful and informative. Cheers!

  • http://www.process-box.com/ Clarissa Lucas

    A very great update about outsourcing. Thank you for posting.

    • http://blogrank.cytrap.eu/ig/4yt/*/*/*/FTindex Urs E. Gattiker

      Dear @clarissalucas:disqus
      Thanks for these kind words. The Snoweden affair has once again shown us that data privacy matters to all of us.

      Outsourcing, another risk that we should not ignore.

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