SAN FRANCISCO (Reuters) - International Business Machines Corp. (IBM.N) will formally announce on Tuesday its new "digital privacy cop" -- software designed to automatically enforce privacy policies so that sensitive corporate information won't get inadvertently leaked.

Currently, companies rely on privacy managers to set rules that employees must follow. IBM's new Tivoli Privacy Manager would make that screening automatic, the company said.

For example, a firm's marketing department could be prevented from inadvertently sending out personal information on customers.

"Now, employees write a privacy policy on paper for others to follow," said Phil Fritz, market manager for privacy at IBM's Tivoli software division. "Tivoli Privacy Manager interfaces with other applications," serving as a digital privacy cop for a company.

Such lapses can be costly to a company's bank account and reputation. Drugmaker Eli Lilly and Co. (LLY.N) agreed to pay $160,000 and tighten its privacy procedures in July to settle an investigation launched by officials in several states, including the California Attorney General's office.

Eli Lilly blamed a programming error for including the e-mail addresses of about 670 subscribers to its prozac.com online alert system in an e-mail to all subscribers last year.

IBM also is announcing software that allows companies to automate the process of granting employees, customers and partners rights to connect to corporate networks and access data.

BROADER INITIATIVE

The announcements are part of a broader IBM initiative aiming to shift the management of computing systems to software, with little or no manual intervention. The effort is sometimes dubbed "self-healing computing."

"If certain events happen you can pretty much automate the response," said Leo Cole, director of security market management for IBM's Tivoli Software division.

For example, "if there's an attack on a Web server, the software can automatically shut down a Web process or server to isolate it, he said. "Or it can automatically reconfigure a firewall," which is used to block out intruders from a network.

"Autonomic computing is a big deal," said Rick Sturm, president of Enterprise Management Associates, an industry analyst firm.

"It's the wave of future computing. It's going to drive down the cost and improve performance and availability," he said. "You're going to have computers that are able to manage themselves."

In a related announcement on Monday, IBM and VeriSign Inc. (VRSN.O) said they were jointly offering a managed service for authorizing user access to a corporation's internal and external network and across multiple applications.