[link|http://www.informationweek.com/outsourcing/showArticle.jhtml?articleID=201204202|Information Week]

A provider of spend management services says one of India's largest outsourcers is holding its data hostage at an offshore location and is refusing to return the information unless legal claims against it are dropped.

To boot, TBT alleges Infosys BPO failed to properly secure customer information on the P2P Smart server. The result: TBT's customers were able to view each other's confidential data, TBT claims.

TBT says that when it tried to cancel its contract with Infosys BPO in April, the Indian service provider refused to release its data unless TBT promised not to pursue any legal claims. "Infosys would return neither TBT's intellectual property nor the confidential account data of TBT clients," TBT alleges in court papers.

TBT also alleges that on a site visit to Bangalore its employees discovered that Infosys was using confidential TBT marketing materials to pitch clients like CIBC, Alcoa, and British Petroleum on a spend management service that Infosys was contemplating. "It is clear that Infosys intends to enter the procurement space occupied by TBT, supplying a motive for its wrongful refusal to return TBT's trade secrets," TBT claims.

As companies outsource more of their actual operations, expect to see more of this. Smart companies will insure they have a backup of key systems and data that is under their control. But most companies are neither that well organized nor that well lead to plan ahead for these kinds of problems.

Jay