IT Compliance and Controls

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Beware Outsourcing Savings from oDesk and others…

August 13th, 2009 · 1 Comment

An incredible trend is happening in the “for contract” market  – specifically the for hire programmers.  oDesk and eLance both show dramatic upticks in the amount of work being posted and delivered on the site (nice article here on the growth).  oDesk alone is tracking about 100,000 hours a week of work, or nearly $65 million dollars worth.  This massive increase in outsourced projects to independents and for hire groups is an indicator of the need for businesses to find affordable development, but at what cost?
The trend is perfect for highlighting how businesses can shift to deliver services required – in any economy.  The trend also equally shows that the practices and methods equally shift.  The challenge is making this shift securely and with the correct safeguards.  (This is highlighted nicely from a macro risk perspective by Mike Nolan here in The Need for Alignment.)  Leveraging contractors has always required specific validation techniques:

  • Right to Audit clauses to ensure operations meet marketing materials
  • Background check summaries on contractors
  • AV and Malware running on contractor systems (or in the U.S. government, no p2p)
  • Vendor management procurement procedures

Awareness is necessary for when these jobs begin to be sourced through open market places.  The fidelity of the business providing the services, protection of intellectual property, and the proper review of software against best practices is only the beginning of the new and expanded risks that must be considered.
Businesses and leaders should certainly embrace these open markets that allow greater access and better price transparency, but it must be done in a manner that reflects the risk capability of the business to ensure a balanced operating environment.

Additional thoughts and ideas on best practices for vetting outsourcing vendors?

James DeLuccia IV

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