By John P. Mello Jr. TechNewsWorld Part of the ECT News Network
03/08/05 8:11 AM PT
"If you talk to people who have operations in India,
they'll tell you you have to have physical security as well as data
security," said Ton Heijmen, a senior advisor with the Conference
Board in New York City. "By and large, those security measures have proven to be
successful."
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American companies have always had to worry about their overseas facilities
being red, white and blue bull's-eyes for terrorists, but now their offshoring
partners may be in the crosshairs of subversives, too.
A reported raid last Saturday by police in Delhi, India, in which three men
were killed and another arrested, uncovered plans to attack software
companies in Bangalore, which has become a technology hub in the country.
The men targeted in the raid were reportedly members of the Laskhar-e-Toiba
group, or LeT, which is demanding independence for the Kashmir region of
northern India.
Target America
Infosys and Wipro, two large Indian high-tech companies, are located in
Bangalore, as are the facilities of some well-known American firms such
as Accenture, Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), Intel (Nasdaq: INTC), Microsoft (Nasdaq: MSFT), Motorola (NYSE: MOT), Texas
Instruments (NYSE: TXN), America Online, Google (Nasdaq: GOOG) and Yahoo (Nasdaq: YHOO).
According to Ira Winkler, a security analyst and author of Spies Among Us,
published this month by John Wiley & Sons, U.S. companies have
been concerned about their overseas facilities
for a long time. "Any symbol of America has been targeted and will be
targeted," he told TechNewsWorld.
"What makes this unusual is that this is the first time that this has been
detected in a large way proactively," he added. "Usually, it's detected
reactively."
Successful Security
Located in the southern part of India, Bangalore has been considered as safe from
the terrorist activity that has plagued the country's northern and western
states. "There's always a risk that some group may decide to attack on
whatever grounds, but it has been a very safe area for most companies that
have operations there," said Ton Heijmen, a senior advisor with the Conference
Board in New York City and author of the recently released report "Thinking
Offshoring Through: A Framework for Decision Makers."
"If you talk to people who have operations in India,
they'll tell you you have to have physical security as well as data
security," he said. "By and large, those security measures have proven to be
successful."
A company doesn't have to be a target, though, to suffer from the
consequences of a terrorist attack, maintained Michel Leonard, chief
economist and head of political risk consulting for Aon Risk Management in
New York City.
Business Interruptus
"It is less likely that you will be affected directly by terrorism than you
will be by the side effects of terrorism," he told TechNewsWorld.
Acts of terrorism, he explained, cause a lot of
business disruption. "Whether or not you're the victim of a terrorist act,
you're going to have to face those costs," he said.
Moreover, he noted, there are forms of risk faced by companies doing
business in India that are greater to a company's bottom line than any
terrorist act. Regulatory risk, for instance, can tie up a company's assets
by limiting money transfers from a country. "That isn't front page news like
terrorism, but it's something companies operating call centers in India are
facing on a daily basis," Leonard said.
Bigger Name, Bigger Threat
Aon Risk Management is part of Aon, the second largest insurance company in
the world, which last month released its annual political and economic risk
map of the world. That map rated India as a "medium risk" nation.
Leonard noted, though, that terrorism risks in India varied by region. "If
you're in Kashmir, for example, your risk environment is very different from
other parts of the country," he said.
He added that some global companies are more at risk from terrorist attacks
than others. "If you're a Citigroup, you're exposure is different than if
you are a low name-recognition company," he asserted.
Will more terrorists be targeting companies accepting offshoring business
from U.S. enterprises? "The only thing that you can expect to be different
in the future is that this will be detected more," Winkler said. "This is an
ongoing thing."
I agree with Mr. Mello that security situation in India is ...
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