IT Compliance Advisor


June 10, 2011  7:06 PM

As social media expands, beware of social networking risks

Ben Cole Ben Cole Profile: Ben Cole

Social media use by businesses and their employees is on the rise, and with good reason — social networking tools can easily help companies reach millions of new customers. New information, however, suggests that companies are also beginning to acknowledge social networking security risks.

Last week, Peak Advisor Alliance announced survey results that found respondents’ biggest challenge is differentiating and marketing to generate new business — but adhering to social media compliance was deemed “too risky” by over half of respondents.

This week, Regus released a survey showing a rise in U.S. companies using social networks to win new business. According to the survey, 43% of firms are successfully using social networking to win new customers, an 8% increase from the 2010 survey. Fifty percent of businesses in the U.S. use social media to connect with customers, and the survey found a 7% global increase in the proportion of businesses successfully recruiting new customers through social networks.

And the social networking security risks do not end with business-related social media. Last month, the Society of Corporate Compliance and Ethics and its affiliated Health Care Compliance Association released findings from a survey among compliance and ethics professionals. The survey found 42% of respondents reported that their organizations have had to discipline an employee for behavior on social networking sites, up from 24% that reported the same in 2009. At the same time, only about one-third of survey respondents report that their organizations have adopted policies specifically addressing the use of social media sites outside of work.

All this comes as the U.S. Department of Commerce released a report June 8 that proposes “voluntary codes of conduct” to strengthen the cybersecurity of “companies that increasingly rely on the Internet to do business.” The report notes that “cyberattacks on Internet commerce, vital business sectors and government agencies have grown exponentially,” and addressing these issues in a way that “protects the tremendous economic and social value of the Internet, without stifling innovation, requires a fresh look at Internet policy.”

The Internet’s vulnerability to online activity attacks, including social media use, is mentioned several times in the Commerce Department report.

With the attention social network security risks are getting, it is very possible more attention will be paid by legislators, and social media compliance rules for business could follow. In the coming weeks, SearchCompliance.com will be examining social networking security risks and social media compliance. Check back for information on what you need to wary of when using this lucrative – but risky – innovation.

June 3, 2011  9:00 PM

Business takes heed as Internet privacy laws and regulations go global

Ben Cole Ben Cole Profile: Ben Cole

High-profile data breaches earlier this year captured the attention of both corporations conducting online business and the legislators charged with overseeing key Internet privacy laws and regulations. Now, countries all over the globe are pushing to expand consumers’ Internet privacy rights.

Late last month during the G8 summit in France, French President Nicolas Sarkozy led the call for tougher Internet privacy rights and copyright laws. Sarkozy even organized the two-day-long “eG8,” held just prior to the G8 summit, designed specifically “for debate and collective reflection on a wide number of key themes involving the Internet.”

Both Facebook founder Mark Zuckerberg and Google Executive Chairman Eric Schmidt attended the G8 summit and spoke out against acting hastily when implementing Internet privacy laws and regulations. They warned that new rules could potentially hinder innovation if the ramifications of such rules were not carefully considered.

Also last month, the U.K.-based Information Commissioner’s Office announced that organizations and businesses that run websites aimed at U.K. consumers have up to 12 months to “get their house in order” before enforcement of the new E.U. “cookies” law begins. The new European Union requirements demand that U.K. businesses and organizations running websites in the U.K. get the consent of their sites’ visitors prior to storing cookies on their computers.

In April, India adopted new privacy rules as part of the country’s Information Technology Act. Under the mandates, organizations must notify individuals when their personal information is collected, make a privacy policy readily available and take steps to secure personal information. The Washington Post reported that companies that outsource to India or have offices could view the rules as too restrictive, and several companies (including Google) voiced displeasure regarding the Indian privacy mandates.

These examples, coupled with a slew of “Do Not Track” proposals being discussed in the U.S., indicate that businesses across the globe will eventually be forced to adhere to many more Internet privacy laws and regulations than in the past. And this process will not be without its headaches.

As more countries explore the depth and scope of Internet privacy rights, several questions will have to be answered. If one country adopts a set of Internet privacy rights, how does this affect foreign businesses that conduct business there? Is there any way to establish global Internet privacy mandates? How can Internet privacy be balanced with online commerce? In addition to the concerns voiced by Schmidt and Zuckerberg, there have been questions raised by businesses and marketers about how compliance with Internet privacy laws and regulations will affect the bottom line.

There’s no question that something must be done to protect online consumers from Internet piracy. There just has to be the right balance between the Internet privacy rights and business continuity — which is most definitely easier said than done.


May 25, 2011  6:22 PM

Plug compliance requirement holes caused by remote control services

Fohlhorst Frank Ohlhorst Profile: Fohlhorst

How compliant are you? That is one of the first questions a newly minted compliance manager should ask themselves about their businesses and associated procedures. Nevertheless, many assume that a simple audit or inventory may be enough of an indicator that compliance requirements are fully enforced. However, there are many twists and turns in the world of compliance, some that go unnoticed and leave gaping holes in security.

Take, for example, remote control applications. They are used primarily for tech support to take control of a PC to troubleshoot a problem, and have become common in many organizations. It is pretty straightforward to secure a tech support-initiated remote control session, because many safeguards are built in and everything usually takes place inside the corporate firewall to keep data secure.

Yet there are times when remote control services/software can become a compliance manager’s biggest enemy — especially those trying to adhere to compliance requirements that specifically target a remote access system. The problem stems from the PCI DSS regulation, which contains specific requirements on how access to personally identifiable information links to payment accounts. One of the key requirements is that data isn’t compromised from an unsecured remote access system.

Unsecured is a broad term, but compliance officers can rest assured that an unsecured connection includes any end-user installed remote access service or application, such as GoToMyPC or LogMeIn. End users install those services for a number of reasons, ranging from collaboration to working from home to getting support from an outside source. Nevertheless, if the target PC deals with information that falls under compliance requirements, odds are those regulations are being broken.

So, what does all of this mean to the compliance officer? Simply put, better control over what end users can do with their PCs and comprehensive software inventories are a must-have. What’s more, advanced technology that blocks remote control services at the firewall is something that must be considered.

Frank Ohlhorst is an award-winning technology journalist, professional speaker and IT business consultant with more than 25 years of experience in the technology arena. He has written for several leading technology and business publications, and was also executive technology editor at eWEEK and director at CRN Test Center.


May 16, 2011  6:19 PM

Use virtualization technologies to remove the hassle of e-discovery

Fohlhorst Frank Ohlhorst Profile: Fohlhorst

Compliance affects numerous technologies in the enterprise. Many compliance officers already know this and strive to make sure that data is properly protected, secured, audited and archived. Nonetheless, some are finding out that data security and storage are just not enough.

The primary tenants of compliance involve data security and storage, yet many overlook why that data is actually preserved. The reason is relatively simple — e-discovery — but the process is far from it, especially if an e-discovery probe involves any significant amount of time.

Take, for example, a situation where three years worth of financial transactions and related information needs to be recovered for an audit initiated by an e-discovery request. On the surface, the request may seem simple: Just run some reports from your applications and you are good to go, right? That sounds like a practical process that entails reasonable efforts surrounding data security and storage. However, let’s throw a monkey wrench into the works: In the past three years, IT switched mail servers, implemented new applications and performed OS upgrades — meaning you can’t just simply spit out a report.

Now, that may seem like an impossible situation, and for some it may very well be as it costs thousands of dollars to recreate the systems needed to retrieve that data. However, with a little bit of technology and a lot of planning, the process can be bought back under control. Let’s take a look at how to accomplish that very task.

First, compliance officers need to take a point of view where they can effectively recreate the past (sort of an information systems time machine). The trick to doing that involves regularly preserving data in a format that remains accessible with little effort. Perhaps a better way to describe it would be to use the phrase “virtual information systems time machine” — the key word being the word virtual.

I think you can see where I am going with this: I’m talking about leveraging virtualization technologies (server, storage and application) to recreate the past. It sounds complex, but actually isn’t. There are a few moving parts to keep track of and a few technologies that need to be implemented that will have an impact on IT operations.

First, let’s talk about preserving the data. The fastest way to go about that is with “snapshots,” whereby a snapshot of the data can be taken and stored at a certain point in time. But it doesn’t end with a data snapshot — that snapshot needs to be managed and preserved in a fashion where it can be remounted as a volume. With that technology in place, not only can the data be made readily assessable, but the supporting software can be as well. That is where virtualization technologies come into play.

Simply put, if you are running your servers, applications and databases under a hypervisor, you can just take a snapshot of the virtual hard drives involved and have the ability to recreate the environment at any time to ease e-discovery tasks. Until recently, attempting to do something along those lines involved a boatload of technologies and products. But, recently, some new ideas in storage have come along – namely, the combination of tier 1 and tier 2 storage technologies under a single platform. What’s more, physical-to-virtual conversion technologies have come on the scene to help simplify the move to virtual environments.

On the storage side, a high-speed storage area network (SAN) is probably the best way to handle the needs of accessing the data. However, that SAN solution should incorporate both tier 1 and 2 of the storage subsystem. Currently, one vendor comes to mind: Nimble Storage Inc., a storage-management manufacturer who has incorporated tier 1 and tier 2 into a single appliance that also supports snapshot technology.

The next piece of the puzzle can come from many different vendors, and that is the physical-to-virtual conversion technology (only needed if your systems are not yet virtualized). Backup vendors such as Paragon Software Group, Acronis Inc. and Symantec Corp. offer P2V applications (many as part of a disaster recovery suite). Most vendors of virtualization technologies, such as VMWare Inc., Citrix Systems Inc. and Microsoft Corp., also offer P2V utilities.

Thanks to these new virtualization technologies, e-discovery can become a simple process of assembling the proper pieces of the puzzle and recreating the past.

Frank Ohlhorst is an award-winning technology journalist, professional speaker and IT business consultant with more than 25 years of experience in the technology arena. He has written for several leading technology and business publications, and was also executive technology editor at eWEEK and director at CRN Test Center.


May 6, 2011  5:41 PM

Products try to prove productivity links to smart compliance strategy

Fohlhorst Frank Ohlhorst Profile: Fohlhorst

Lexmark is looking to prove that compliance strategy and productivity are not mutually exclusive concepts. The company is launching three new back-office solutions under the guise that automation, which improves productivity, can directly influence the level of compliance.

That’s probably a sign of things to come for the compliance market. A multitude of vendors are trying to assign value to the compliance strategy process or, at the very least, make purchasing new systems more palatable by extolling the virtues of productivity to help reduce the compliance burden.

I expect that most vendors in the compliance market will follow Lexmark’s lead and start to discuss processes instead of individual solutions.  After all, there is a lot of room to improve capabilities in the compliance market, and Lexmark seems to make some good points with its concepts.

Lexmark’s three new end-to-end, back-office solutions are designed to accelerate the flow of information and enable companies to improve compliance and productivity. This is done by leveraging the integration of Lexmark’s smart multifunction products (MFPs) and Perceptive Software’s ImageNow, which can merge generated data into enterprise systems.

The arrangement potentially reduces paper use, cuts down on processing time and automates some of the compliance requirements for businesses dealing with both printed and electronically transmitted data.

To begin with, Lexmark is focusing on solutions that are notorious for the amount of paper printouts created and the amount of data that can cross multiple desks, creating compliance concerns. The products offered include:

  • Recruitment and onboarding: Automates many of the manual tasks associated with the hiring process, making the process more efficient for managers, as well as HR staff. On the compliance strategy end, the solution automatically detects missing information such as critical forms, reports or signatures, and reduces risk associated with managing and storing hard-copy documents.
  • Invoice processing: Uses Lexmark’s MFP intelligent capture during invoice processing at the point of receipt to speed the process and reduce the cost of moving hard-copy invoices. The solution accelerates matching, approval and payment by automating manual tasks in order to capitalize on vendor discounts. It also synchronizes data with ERP and financial systems to ensure real-time visibility to payables.
  • Travel and expense: Eliminates paper and postage expenses by electronically capturing receipts in distributed locations. The solution reduces employee inquiries by providing self-service visibility to the report’s status and also eases reporting, reconciliation and audit preparation by collecting documentation in a single repository.

Ultimately, Lexmark’s goal is most likely aimed at getting enterprises to buy more Lexmark products and the associated supplies.  Compliance tinted with productivity is arguably one of the best ways to make that happen. Each of the above solutions does require Lexmark hardware and, in turn, the supplies and support that goes along with it.

Frank Ohlhorst is an award-winning technology journalist, professional speaker and IT business consultant with more than 25 years of experience in the technology arena. He has written for several leading technology publications, including Computerworld, TechTarget, PCWorld, ExtremeTech and Tom’s Hardware, and business publications including Entrepreneur and BNET. Ohlhorst was also executive technology editor at eWEEK and director of CRN Test Center.


April 28, 2011  7:16 PM

Don’t become a victim of your corporate compliance program

Fohlhorst Frank Ohlhorst Profile: Fohlhorst

For many executives, corporate compliance programs can be a double-edged sword. Take, for example, the recent resignation of Gary D. Henley, president and CEO of orthopedic device maker Wright Medical Group Inc.

Henley tendered his resignation as president and chief executive just prior to the board of directors reviewing an ongoing corporate compliance program at the company. Wright Medical said the board accepted Henley’s resignation but deemed it to be without “good reason,” and thus Henley isn’t entitled to severance pay. The board also fired another executive for issues related to the company’s corporate compliance program.

The Arlington, Tenn., company didn’t describe the specific compliance issues being reviewed. However, as part of a deferred prosecution agreement with the U.S. government over allegations that Wright Medical improperly paid doctors to use its devices, the company agreed to meet certain compliance obligations. This included subjecting its physician consulting arrangements to review by a federally appointed monitor.

In addition to the CEO resignation, the board fired Frank S. Bono, senior vice president and chief technology officer (CTO), for “failing to exhibit appropriate regard for the company’s ongoing compliance program.”

The Wright Medical story — and others like it — highlights how severe an impact compliance problems can have on an organization. That should prompt CTOs and other executives to consider the impact of compliance problems and if their jobs are indeed on the line.

The key here is not to minimize the importance of corporate compliance programs or think that others may take the fall if a compliance initiative fails. Use the example above to plan for the worst and to make sure the appropriate budget and resources are in place to prevent compliance problems from taking your job.

Frank Ohlhorst is an award-winning technology journalist, professional speaker and IT business consultant with more than 25 years of experience in the technology arena. He has written for several leading technology publications, including Computerworld, TechTarget, PCWorld, ExtremeTech and Tom’s Hardware, and business publications including Entrepreneur and BNET. Ohlhorst was also executive technology editor at eWEEK and director of CRN Test Center.


April 22, 2011  8:21 PM

Increased regulations keep regulatory compliance atop list of concerns

Ben Cole Ben Cole Profile: Ben Cole

It’s no secret that compliance regulations have expanded in scope and multiplied in the last few years. New survey results from the Information Systems Audit and Control Association (ISACA) show IT and the rest of the business may be paying attention.

Regulatory compliance was predicted to be the top business issue affecting enterprise information technology in the next 12 months, according to ISACA’s Top Business/Technology Issues Survey Results 2011 report.

“The increase in regulations, data breaches and new technologies such as cloud computing and the rise of personal technology in the workplace are accelerating complexity and risk,” according to an ISACA statement. The problem is exacerbated as enterprises try to manage growth while dealing with the growing number of compliance regulations and standards.

The key business issues affecting IT, according to the survey’s findings, are:

  • Regulatory compliance
  • Enterprise-based IT management and governance
  • Information security management
  • Disaster recovery/business continuity
  • Challenges of managing IT risks
  • Vulnerability management
  • Continuous process improvement and business agility

ISACA also noted that new or changed regulations expected to impact enterprise IT in the next 12 to 18 months include the Basel standard for internationally active banks; the Dodd-Frank Wall Street Reform and Consumer Protection Act; regulations related to personally identifiable information; Do Not Track mechanisms for consumers; Solvency II regulatory requirements for insurance firms; and meaningful use standards established by the Health Information Technology for Economic and Clinical Health Act. The report also pointed to “an overall tightening of tax and privacy regulations worldwide.”

The key technology areas that respondents felt would be most important to regulatory compliance include the implementation of technology to support segregation of duties, privileged access monitoring and management of the compliance process.

As enterprises face the need to comply with multiple regulations and standards, they implement automated solutions to track and report upon the varying compliance controls in an attempt to make the compliance process more efficient, according to ISACA. This can cause headaches: The costs associated with managing and implementing systems to protect companies from the loss of personally identifiable information were among the top concerns mentioned by survey respondents.

And the concerns don’t end there: Technology trends such as cloud computing, mobile devices and social media will also impact the issues discussed above. As ISACA noted, these technologies will increasingly become part of an enterprise’s architecture and surely impact areas such as business continuity, IT risk, regulatory compliance and information security.

The number of data breaches still in the news shows that, despite the increase in regulations, not enough is being done. The slew of new regulations is ultimately aimed at trying to help protect companies and their customers — and having a sound compliance management strategy in place would benefit both of these groups.


April 1, 2011  6:20 PM

BP, Google keep corporate privacy policies in the limelight

Ben Cole Ben Cole Profile: Ben Cole

It’s been an eventful week in IT compliance, as the privacy policies at two high-profile companies came under the microscope.

Google Inc. agreed to settle Federal Trade Commission charges that it used “deceptive tactics and violated its own privacy promises” to consumers when it launched social network Google Buzz in 2010. The proposed settlement would require Google to implement a comprehensive privacy program and calls for regular, independent privacy audits for the next 20 years.

Also this week, BP admitted that a laptop computer containing the private information of about 13,000 individuals who filed oil-related claims after the 2010 oil spill has been lost. The names, addresses, phone numbers, birthdates and Social Security numbers for those who filed claims were stored on the laptop, which a BP spokesman said was password-protected but not encrypted. BP notified the individuals and provided them with free credit monitoring services.

So does this mean enterprises aren’t getting the message? Did Google not consider the scrutiny Facebook and other social networks face for their corporate privacy policies? Are the endless amount of rules and regulations not enough? And, really, who are the people losing these laptops? I have a work-issued laptop myself, and I’m pretty careful with it. This despite the fact that mine doesn’t include legal files and personal information for claimants in a multibillion dollar case.

Maybe these recent news stories will help get the message across to other companies that handle customers’ personal information that corporate privacy policy concerns aren’t going away. Maybe they will see it can be costly, too: The Ponemon Institute‘s latest “U.S. Cost of a Data Breach” report, released in March, found that costs for data breaches reached $214 per compromised record and averaged $7.2 million per data breach event.

But probably not. BP and Google Inc. have household names, huge customer bases and countless resources (and money). If they aren’t taking privacy seriously, it doesn’t look good for the rest.


March 25, 2011  5:25 PM

How is compliance hurt if software development projects are ‘doomed’?

Ben Cole Ben Cole Profile: Ben Cole

You’ve seen it before, no doubt: Your organization develops a software project, with both business executives and IT careful when outlining its objectives, developing a plan and making sure it adheres to compliance regulations. Then, after countless hours of work, the project falls apart.

Trying to answer why this happens so often was the goal of a recent Geneca study, “Doomed from the Start? Why a Majority of business and IT Teams Anticipate Their Software Development Projects Will Fail.” The study examined why IT teams struggle to meet business expectations for their projects, and asked participants questions on topics such as requirements, accountability and measuring project success. A high number of respondents showed a lack of confidence in their projects’ success, with 75% of respondents saying that their projects are either always or usually “doomed right from the start.”

Geneca cited several problems causing the lack of confidence in the projects’ overall success. Key study findings include:

  • 80% of respondents said they spend at least half their time on rework.
  • 78% said the business is usually or always out of sync with project requirements and business stakeholders need to be more involved and engaged in the requirements process.
  • 55% said that the business objectives of their projects are clear to them.
  • 23% stated that they are always in agreement when a project is truly done.

Another interesting finding was that 76% of IT respondents and 72% of business respondents agree that IT is a “trusted partner and critical to the company’s success.” However, IT people assume that their business colleagues believe that “IT doesn’t build what the business asks for” (42%), “projects are always over budget and take too long” (33%), and that “IT needs to provide more warning when a project is going to be over budget or late” (28%).

A Geneca report accompanying the survey stated that the responses from IT professionals and their business counterparts were fairly similar. In addition, each side had many of the same issues and concerns with regard to their projects.

“The perception is that challenges start at the beginning of a project and reflect difficulty in defining project success,” according to the Geneca report. “This carries forward to IT and has impact throughout the rest of the project.”

Geneca representatives advised professionals to examine their processes and try to facilitate the following to alleviate obstacles outlined in the study:

  • Communication of clear business objectives.
  • Measurement of project results against business objectives.
  • Ownership of the project goals vs. design of the solution.
  • Collaboration between the business and IT to drive alignment.
  • A common vision across every part of the organization involved.

All sound advice. As the report notes, the project management problems outlined above are interconnected and compound each other when left unchecked. And what about when a project is designed to create a compliance solution or related to meeting compliance regulations? With the number of compliance regulations out there, and many more likely to come, a project’s success could make or break your company’s adherence to the rules. As a result, getting it right the first time is more important than ever.


March 18, 2011  4:04 PM

Survey: Burden of Sarbanes-Oxley compliance not enough for repeal

Ben Cole Ben Cole Profile: Ben Cole

It has been almost nine years since the Sarbanes-Oxley Act made its debut, forcing new or enhanced accounting standards for all public U.S. companies. SOX is designed to protect shareholders and the general public from accounting errors and fraudulent practices in the enterprise, but it has been a source of controversy since its implementation.

Lawsuits have been filed questioning SOX’s constitutionality, with opponents (including Newt Gingrich, who has lobbied for SOX’s repeal) saying it created overly complex regulations for U.S. financial markets that reduced the United States’ competitive edge against foreign financial institutions.

But a national survey of chief audit executives by Grant Thornton LLP found that while almost half said a shifting regulatory landscape poses the greatest threat to their business, 88% do not believe SOX should be repealed for all companies.

“Whether this outlook reflects resistance to additional regulatory change in the form of repeal or, alternatively, recognition that SOX provides value to some organizations is unclear,” according to a Grant Thornton report accompanying the survey’s findings. “Based on discussions with various CAEs during the survey process, many believe that SOX brings a continued focus by management on financial and governance-related controls.”

For the chief audit executives who believe that SOX should be repealed, the cost of SOX compliance was their main reason, the survey found.

In addition, maintaining SOX compliance was just the tip of the iceberg when it comes to the number of regulations introduced in the past decade. The Grant Thornton report notes that since the passage of SOX, organizations have had to dedicate significant resources to comply with a host of new laws and regulations, including the Red Flags Rule as mandated by the Fair and Accurate Credit Transactions Act of 2003; Payment Card Industry security standards; the HIPAA Privacy Rule; and the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The chief audit executives surveyed said there are additional risks beyond potential noncompliance with these new laws, including risks involved with global expansion into new regions or culturally different locations (22%), new initiatives as the economic recovery takes hold (13%), and the launch of new products or services (12%).

It’s probably good (although moot) that the chief audit executives do not believe SOX should be repealed, mainly because it does not look like the act is going anywhere. The U.S. is still in the throes of a financial crisis, and it’s unlikely the country will repeal a law that creates checks and balances to protect consumers from another crisis.

Even if SOX is repealed at some point, regulations mandated by the other laws mentioned above will keep chief audit executives and compliance officers on their toes. If nothing else, these regulations provide the “continued focus by management on financial and governance-related controls” that the survey respondents cited as one of the benefits of SOX compliance.


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