Security and Compliance: Managing the Design Process with Outsourced Personnel

Compliance / Privacy
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The problems of building systems that meet the requirements of security and corporate compliance are difficult enough when designing and building an application in-house. The complexity of meeting these requirements increases exponentially when IT departments outsource the projects to personnel who are no longer onsite. It is possible that an outsourcer could deliver a product that does not meet the security requirements of the organization, opening up potential compliance problems that go unaddressed by IT.

Project managers and application designers for outsourced development applications are experiencing security challenges of a magnitude they have not seen before. Is that self-inflicted through corporate paranoia, or is it an absolute necessity?

Simplistically, the problems caused by the management of such projects can be compared with the challenges parents have with their teenagers. Most parental coaching manuals stress the importance of trusting your children and granting them some freedom. Therefore, parents give their offspring some freedom to make decisions for themselves, and the parents pronounce that they trust them. But how far do they trust them? Are these the same parents installing software to control PC and instant messaging access? Do the parents check out their children's MySpace pages? Are they reading their children's journals and tidying bedrooms with eagle eyes?

In the same way, an IT organization would not normally engage in an outsourcing project with a provider it doesn't trust. That would be foolish. But will the organization be stricter than with its in-house staff? Will it define strong rules and audit, audit, audit? You bet it will.

One overriding point throughout this article is that the scale of the project has a massive impact on the security requirement. As more and more SMBs consider some aspect of development outsourcing, a lot can be learned from the large projects that have gone before.

Wikipedia describes outsourcing this way: "Outsourcing (or contracting out) is often defined as the delegation of non-core operations or jobs from internal production within a business to an external entity (such as a subcontractor) that specializes in that operation. Outsourcing is a business decision that is often made to lower costs or focus on core competences."

But that definition can cover many different scenarios. Introducing consultants and contractors for IT development projects is nothing new. Projects with outside resources always present more management and security challenges than wholly in-house projects. However, each project within this broad range will have different security needs, especially if we consider the project types:

  • Contracting with an ex-employee who is now independent but has the right skills and knowledge to be a consultant on legacy applications
  • Contracting resources from a cheaper part of the same country—for example, "farmsourcing"
  • Outsourcing to major players such as IBM Global Services, EDS, etc.
  • Outsourcing to software providers with some development teams overseas
  • Outsourcing to software providers with only a sales presence locally and all developers overseas
  • Creating shared companies with overseas development organizations
  • Creating a development resource company in a foreign country, often called "captive subsidiaries"

Each of these presents its own challenges and levels of risk. Obviously, as risk increases, the need for stronger security mechanisms increases, too. The most risky outsourcing project is the situation in which development resources are located in another country and provided by a totally separate organization. It is this type of scenario that raises the most security concerns; however, many apply to local outsourcing projects, too.

It is easy to slip into the mindset that "we" are good and the outsourcers are bad, but that is far from the truth. Speak to many of outsourcing providers, and their verbal commitment to IT security is blatantly obvious. Organizations should look for a provider with a such a mindset. This highlights another important aspect when choosing a partner: Organizations should look for an outsourcer with a similar level of project organizational maturity. To quantify this, organizations have in the past utilized standards that grew out of ISO 9001 to cover "quality" in development project management. One that has been used regularly over the last 20 years or so is the Capability Maturity Model (CMM). Many organizations have already evaluated their own level of process organization and should look for a developer with a similar level of maturity. CMM, which was developed out of the Software Engineering Institute at Carnegie Mellon, has since been sunsetted with the introduction of a newer model called Capability Maturity Model Integration (CMMI).

To analyze the security requirements for an outsourcing project, we can split the project into discrete sections. Some security issues span, or affect, more than one of these categories and may be mentioned multiple times:

  • Project definition
  • Design
  • Technology infrastructure
  • Skills/knowledge transfer
  • Development
  • Testing and QA
  • Audit

Project Definition

A manager I worked for once told me that contracts were only written in case one of the signatories passed away! He believed that business relationships were directed by the personal relationships of the people involved and that any issues that arose would be addressed without recourse to the contract paperwork.

I am sure everyone can think of at least one situation in which that was blatantly not the case. Outsourced projects need good, strong, detailed contracts between the parties involved. Failure to take every precaution at this stage would be a disaster waiting to happen. Stop and think of the reason outsourcing projects take place. In the majority of cases, the answer is money. The client organization is looking for a cost-effective way to produce applications.

So what is the tradeoff organizations have to accept in order to get these savings? One reason for the cost-savings is that the outsourcer is in a region that has different standards and expectations for privacy and data protection. This is not to say they are more insecure, just that there may not be a culture of security and their legal system may not provide the same protection. This is similar to employing a building contractor who does not know, or adhere to, local building codes. It may be cheaper, but it could cause problems later.

In addition to the general items, the contract must address these security issues:

  • Intellectual property rights
  • Federal and industry regulations
  • Privacy
  • Country/state of jurisdiction
  • Non-compete clauses
  • Exit options—Discrete points along the way where it might be useful to end the relationship if security issues arise
  • Results of failure to deliver by either side
  • Arbitration—Whether this can be used, rather than the more expensive and slower legal systems
  • Personnel expectations—For example, whether developers are allowed to work on other companies' projects or whether third-party contractors are allowed


In some development departments, personnel have been working for the same business on the same applications for so long that the designer intentionally omits some design details. It is a great luxury not to have to explain the business, demonstrate the tools, and discuss the users' expectations in order to get a quality result.

However, in an outsourcing environment, the documentation must be complete. If the developers working for the outsourcing company are located in a different region of the world, they may have no understanding of what the application will do for the end user. Hence, a detailed specification document is required. However, the organization must maintain control of that document. Whether the company is a software developer or an organization needing an in-house application to run its business, loss of design documents can lead to loss of business advantage.

The type of design documentation, its expected flow, and its rules for use must be defined up front. In large outsourcing contracts, the development resources often never get to see a printed copy of the design specifications they are working from. The PC could be locked down so that the developer cannot transmit the document somewhere else, plug in a flash drive, etc. These severe and draconian measures are important to ensure that both parties are comfortable in the business relationship.

Technology Infrastructure

As mentioned, many companies insist on a high level of security for the hardware the outsource developers are using. This extends not only to the individual PCs but also to the infrastructure between the two organizations. Some outsourcers connect to their client's systems through shared lines to save expense. Companies must determine whether the possibility exists that another partner or client of the outsourcer could connect to their production systems or even just scan and steal documentation and coding that is being transferred. How should an organization react to such a risk? One option is to insist on a separate line for the organization's project and resources (which will erode some of the cost savings the client was hoping for) or to impose security restrictions/technologies on the shared lines (which will also erode the cost savings).

Some large outsourcing projects specify that the client has the right to build the PCs and servers that the developers are to use during the project to ensure that the correct security procedures are in place. Other organizations use technology to enforce the environment they need. For example, virtualization software provider VMware markets a product called ACE (Assured Computing Environment) that can encapsulate a total environment for the developer to work on. It can be configured so that developers can still access their emails, other clients' development environments, the Internet, etc. without compromising the security of the development model.

Other technology solutions may be required to enforce the right standards for the developers' PCs when they connect to an organization's own systems. As an example, it is important that virus definitions and OS patches are at the right level before allowing access to the network.

Skills/Knowledge Transfer

With any project, transferring business and application knowledge to the developers is an important aspect of the process. Similarly, transferring technical skills cannot be underplayed. When choosing an outsourcing provider, an organization should always try to find a good match within the developer base, but it is unlikely to be a perfect match, especially with legacy environments, such as some of the older iSeries technologies. It is critical during the partner search phase of the project that the outsourcing provider makes commitments regarding the skills available within its developer team, including specific details as to which person has those skills.

However, such commitments will be of no use if the developer assigned to the project resigns or is reassigned to a new project. Monitoring developer personnel is a critical ongoing task, especially if the developer has IDs permitting him to access the client's own systems. Because of these concerns, companies often decide to employ third-party organizations to verify that the personnel commitments made by the outsourcer are being met.

The type of application development project chosen to be outsourced can be vary greatly, but all have their own types of challenges. For example, one view is that maintenance of an old legacy system is a good choice for outsourcing so that internal development can focus on newer technologies. However, the skills transfer on the old application can lead to the type of privacy exposure documented above. Another view is that a completely new application is the right type of project, partly because there would be less skills transfer concerning the old processes; however, there would be more knowledge transfer related to the business. Whichever type of project an organization has available for outsourcing, it is guaranteed that considerable skills transfer will be necessary.


Maintaining control of an outsourced project has the same basic requirements as traditional in-house development, just taken to the next degree. Even the least paranoid project manager has at some time wondered whether his own developers have inserted some rogue coding into applications. The worry is that, at some point in the future, a disgruntled person could activate that coding and cause all sorts of havoc. For example, the application could transfer the rounding errors to rogue bank accounts or the application could ignore the security restrictions if the user name is JHACKER.

Now hold that thought, and apply it to an outsourcing project, where the developers are in a poorer region of the world or a country with potential political instability. Could these factors influence a developer to introduce some sort of rogue coding into the application? An organization could try to review the coding details of every part of every application, but that will likely negate the cost benefits of outsourcing. More sensible is an organized, though random, audit of selected elements of the application.

Testing and Quality Assurance

One challenge for the organization is to ensure that the quality-testing phase does not become the most onerous part of the project. Despite good design documentation, skills transfer, and such, will the developer really understand the requirements and will the discussions between designer and developer work well across geographical and social boundaries? At least in the early stages of the project, it is critical to regularly check that the developers are interpreting the designs correctly. It is not sensible to wait too long to start the QA process.

One aspect of security that is often overlooked, even during in-house development, is the privacy of the available test data. Of course, outsourcing companies require good test data to prove their applications, but what does that test data contain? Of course, the current live corporate data is the best source of application information; however, it is critical that all useful and identifiable data is replaced before handing it over for use in testing. For example, a customer file with real customer names and real prices may be of value to competitors; therefore, it should be used as test data only if some of the data contents are changed.


Most of the elements highlighted above need to be strictly audited on a regular basis. Sadly, figures show that less than a quarter of clients audit the security of their outsourcing partners. Given the difficulties in doing this, it is not surprising. For example, will a client send a consultant to check the outsourcer's premises for physical security and proper use of design documentation every quarter—or even every year?

If the outsourcing developers have access to their clients' production systems for implementation issues and ongoing support, are the IDs being checked for appropriateness of access? Is that a part of the client's internal audit processes?

In many global outsourcing centers of the world, the outsourcers have matured to a security standard that is comparable to those of the client. This can still cause challenges as the outsourcer may have set those standards to meet one particular client, maybe their first large contract, but these may not meet all clients' standards. It is difficult for the outsourcer to make all clients happy at the same time.

Successful Outsourcing

A number of themes run through this article. First, the risk (or at least the perceived risk) is greater with outsourced development projects. Second, there is a delicate balance between trust and compliance; organizations must audit to the level they are comfortable with. Finally, as more and more SMBs take their first steps in remote development, a lot can be learned from the way the big boys have run their projects. However, trying to emulate all of the processes, tools, and methodologies that the larger companies have used will very quickly erode the cost savings associated with an outsourced development project.

Martin Norman is Senior Systems Engineer for SafeStone Technologies, an IBM BP specializing in compliance and identity management. As one of the original developers of SafeStone's security portfolio, Martin has performed security audits and advised on installations for clients throughout the United States and Europe. Martin can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it..



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    Join top IBM i security expert Robin Tatam as he outlines the five fastest and most impactful changes you can make to strengthen IBM i security this year.
    Your system didn’t become unsecure overnight and you won’t be able to turn it around overnight either. But quick wins are possible with IBM i security, and Robin Tatam will show you how to achieve them.

  • How to Meet the Newest Encryption Requirements on IBM i

    SB PowerTech WC GenericA growing number of compliance mandates require sensitive data to be encrypted. But what kind of encryption solution will satisfy an auditor and how can you implement encryption on IBM i? Watch this on-demand webinar to find out how to meet today’s most common encryption requirements on IBM i. You’ll also learn:

    • Why disk encryption isn’t enough
    • What sets strong encryption apart from other solutions
    • Important considerations before implementing encryption



  • Security Bulletin: Malware Infection Discovered on IBM i Server!

    SB PowerTech WC GenericMalicious programs can bring entire businesses to their knees—and IBM i shops are not immune. It’s critical to grasp the true impact malware can have on IBM i and the network that connects to it. Attend this webinar to gain a thorough understanding of the relationships between:

    • Viruses, native objects, and the integrated file system (IFS)
    • Power Systems and Windows-based viruses and malware
    • PC-based anti-virus scanning versus native IBM i scanning

    There are a number of ways you can minimize your exposure to viruses. IBM i security expert Sandi Moore explains the facts, including how to ensure you're fully protected and compliant with regulations such as PCI.



  • Fight Cyber Threats with IBM i Encryption

    SB PowerTech WC GenericCyber attacks often target mission-critical servers, and those attack strategies are constantly changing. To stay on top of these threats, your cybersecurity strategies must evolve, too. In this session, IBM i security expert Robin Tatam provides a quick recap of IBM i security basics and guides you through some advanced cybersecurity techniques that can help you take data protection to the next level. Robin will cover:

    • Reducing the risk posed by special authorities
    • Establishing object-level security
    • Overseeing user actions and data access




  • 10 Practical IBM i Security Tips for Surviving Covid-19 and Working From Home

    SB PowerTech WC GenericNow that many organizations have moved to a work from home model, security concerns have risen.

    During this session Carol Woodbury will discuss the issues that the world is currently seeing such as increased malware attacks and then provide practical actions you can take to both monitor and protect your IBM i during this challenging time.


  • How to Transfer IBM i Data to Microsoft Excel

    SB_HelpSystems_WC_Generic3 easy ways to get IBM i data into Excel every time
    There’s an easy, more reliable way to import your IBM i data to Excel? It’s called Sequel. During this webinar, our data access experts demonstrate how you can simplify the process of getting data from multiple sources—including Db2 for i—into Excel. Watch to learn how to:

    • Download your IBM i data to Excel in a single step
    • Deliver data to business users in Excel via email or a scheduled job
    • Access IBM i data directly using the Excel add-in in Sequel

    Make 2020 the year you finally see your data clearly, quickly, and securely. Start by giving business users the ability to access crucial business data from IBM i the way they want it—in Microsoft Excel.



  • HA Alternatives: MIMIX Is Not Your Only Option on IBM i

    SB_HelpSystems_WC_GenericIn this recorded webinar, our experts introduce you to the new HA transition technology available with our Robot HA software. You’ll learn how to:

    • Transition your rules from MIMIX (if you’re happy with them)
    • Simplify your day-to-day activities around high availability
    • Gain back time in your work week
    • Make your CEO happy about reducing IT costs

    Don’t stick with a legacy high availability solution that makes you uncomfortable when transitioning to something better can be simple, safe, and cost-effective.



  • Node Webinar Series Pt. 1: The World of Node.js on IBM i

    SB Profound WC GenericHave you been wondering about Node.js? Our free Node.js Webinar Series takes you from total beginner to creating a fully-functional IBM i Node.js business application.
    Part 1 will teach you what Node.js is, why it's a great option for IBM i shops, and how to take advantage of the ecosystem surrounding Node.
    In addition to background information, our Director of Product Development Scott Klement will demonstrate applications that take advantage of the Node Package Manager (npm).
    Watch Now.

  • The Biggest Mistakes in IBM i Security

    SB Profound WC Generic The Biggest Mistakes in IBM i Security
    Here’s the harsh reality: cybersecurity pros have to get their jobs right every single day, while an attacker only has to succeed once to do incredible damage.
    Whether that’s thousands of exposed records, millions of dollars in fines and legal fees, or diminished share value, it’s easy to judge organizations that fall victim. IBM i enjoys an enviable reputation for security, but no system is impervious to mistakes.
    Join this webinar to learn about the biggest errors made when securing a Power Systems server.
    This knowledge is critical for ensuring integrity of your application data and preventing you from becoming the next Equifax. It’s also essential for complying with all formal regulations, including SOX, PCI, GDPR, and HIPAA
    Watch Now.

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  • Backup and Recovery on IBM i: Your Strategy for the Unexpected

    SB HelpSystems SC 5413Robot automates the routine tasks of iSeries backup and recovery, saving you time and money and making the process safer and more reliable. Automate your backups with the Robot Backup and Recovery Solution. Key features include:
    - Simplified backup procedures
    - Easy data encryption
    - Save media management
    - Guided restoration
    - Seamless product integration
    Make sure your data survives when catastrophe hits. Try the Robot Backup and Recovery Solution FREE for 30 days.

  • Manage IBM i Messages by Exception with Robot

    SB HelpSystems SC 5413Managing messages on your IBM i can be more than a full-time job if you have to do it manually. How can you be sure you won’t miss important system events?
    Automate your message center with the Robot Message Management Solution. Key features include:
    - Automated message management
    - Tailored notifications and automatic escalation
    - System-wide control of your IBM i partitions
    - Two-way system notifications from your mobile device
    - Seamless product integration
    Try the Robot Message Management Solution FREE for 30 days.

  • Easiest Way to Save Money? Stop Printing IBM i Reports

    SB HelpSystems SC 5413Robot automates report bursting, distribution, bundling, and archiving, and offers secure, selective online report viewing.
    Manage your reports with the Robot Report Management Solution. Key features include:

    - Automated report distribution
    - View online without delay
    - Browser interface to make notes
    - Custom retention capabilities
    - Seamless product integration
    Rerun another report? Never again. Try the Robot Report Management Solution FREE for 30 days.

  • Hassle-Free IBM i Operations around the Clock

    SB HelpSystems SC 5413For over 30 years, Robot has been a leader in systems management for IBM i.
    Manage your job schedule with the Robot Job Scheduling Solution. Key features include:
    - Automated batch, interactive, and cross-platform scheduling
    - Event-driven dependency processing
    - Centralized monitoring and reporting
    - Audit log and ready-to-use reports
    - Seamless product integration
    Scale your software, not your staff. Try the Robot Job Scheduling Solution FREE for 30 days.

  • ACO MONITOR Manages your IBM i 24/7 and Notifies You When Your IBM i Needs Assistance!

    SB DDL Systems 5429More than a paging system - ACO MONITOR is a complete systems management solution for your Power Systems running IBM i. ACO MONITOR manages your Power System 24/7, uses advanced technology (like two-way messaging) to notify on-duty support personnel, and responds to complex problems before they reach critical status.

    ACO MONITOR is proven technology and is capable of processing thousands of mission-critical events daily. The software is pre-configured, easy to install, scalable, and greatly improves data center efficiency.