On October 5, 2004, I posted a blog entry about California Governor Arnold Schwarzenegger vetoing three privacy bills, including two bills that would have restricted the outsourcing of medial and financial data services. In that blog entry, I argued Governor Schwarzenegger’s decision is wrong.

Recently, a new report by the Information Security Forum shows that outsourcing and offshoring data processing and other business functions carries significant risk, particularly with regard to regulatory compliance. The report acknowledges that outsourcing is “here to stay,” and urges careful planning and management of outsource partners to minimize associated risks. Unfortunately, the full version of the report is available to ISF members only.