IT clients fear data leaks, question WFH feasibility

At a time when several Indian information technology (IT) services firms are firming up plans to institutionalise work-from-home (WFH) for employees in a big way after Covid--19, clients are not likely to give prompt approval for this owing to the possibility of data leakage.

Sources in the know said while chief information officers (CIOS) of a majority of client organisations had given the go-ahead for WFH in the light of the pandemic, such approvals from the board will not be easy to receive in normal times. Even getting approval for WFH during the ongoing crisis was not easy for many firms. For business process management (BPM) companies, they say, continuing with WFH is going to be difficult because the same computer system is used by multiple employees in various shifts. In a typical eight-hour work shift followed by BPM firms, three employees use the same computer for servicing clients in a 24-hour support environment.

“Even if clients have given security approval to IT firms for WFH, many CIOS have obtained these approvals from the management with much difficulty” said an IT outsourcing advisor.

“Most CIOS are on their toes, given the security risks it poses with regard to possible leakage of sensitive data. So, it will be difficult for IT companies to get those approvals during normal times,” he added.

“Also, the level of privacy available to junior employees in a WFH set-up in offshore locations like India is another matter of concern for clients,” the person added. In the light of the crisis, more than 90 per cent of the employees of most IT services companies are working from home. To enable such large-scale remote working, many IT firms have relocated computer desktops to their employees’ homes, apart from providing them with other forms of infrastructure support. In some cases, companies have set up servers in large apartments in which a chunk of their workforce resides.

Given the successful implementation of this model, many IT firms are now planning to make it a permanent feature. Tata Consultancy Services, for example, has said it hopes around 75 per cent of its employees to work from home permanently by 2025. Even Infosys and Wipro have shown their willingness to adopt this model. Also, WFH can be one of the factors in reducing SG&A (sales & general administration) costs, supplementing the operating margin of these companies.

However, while the top management of IT firms has been enthusiastic about institutionalising WFH, their clients are worried about possible data breach with respect to client confidentiality.

“Though it looks attractive to adopt WFH on a large scale, any data breach due to malware or ransomware attack can lead to loss of contract for the IT firm. The recent Maze ransomware attack on Cognizant is a case in point. So, any such incident may lead to higher insourcing by clients as seen in the case of banking institutions,” said a person who provides research support to IT firms globally.