How to protect sensitive data when outsourcing.

How to Protect Sensitive Data When Outsourcing

Outsourcing becomes a viable option if a company is to remain competitive, retain its profits and keep its dynamism. It allows a business to subcontract parts of its services or offerings to specialized professionals. Outsourcing offers many benefits to include: cost-cutting leading to money savings, increased efficiency and even reduction in labor costs.

But, outsourcing has its drawbacks, too not least of which is sensitive data that might be compromised when you decide to subcontract parts of your company’s functions outside of your organization. In fact, IBM estimates that a data breach can actually cost an American company $3.5 m. Protecting data that is available to workers when outsourcing is a great challenge that many owners and managers seriously have to think about.

Protect Data Internally
Before even subcontracting work, it is imperative to take a closer look at your own data protection and security. Investigate possible loopholes and address these concerns accordingly. Data should be grouped as general or that which can be shared among workers and sensitive or restricted, accessible only to people with credentials and privileges. There should be security software in place that can monitor how data is accessed to avoid identity theft and information leakages. Log records can also be generated periodically to ensure that only authorized persons access classified data.

Scout for an Outsourcing Vendor
Once this is sorted and a solid data protection is in place, it is time to look for an outsourcing vendor. You can do this by formulating a terms of reference outlining objectives, expected output, expertise needed, budget and monitoring instruments.

Check Candidates
As soon as you receive proposals for the work you intend to outsource, pay special attention to how bidders or applicants propose to handle data protection. You might want to include an NDA clause. It is also possible to second your own employee to work with your subcontractor to ensure that data privileges are not abused. He/she will serve as a counterbalance mechanism.

If a vendor has its pool of employees, it is highly recommended to grant data access privileges to 1-2 persons only. Check if the provider has technology or software in place that handles the flow and process of data. Things like having a dedicated server, IPs and LANs are helpful in data protection. Other additional controls include video control systems for employees, security badges and limited access to data rooms.

If handled properly, outsourcing can provide real benefits to the company without risking sensitive data that will be detrimental to the health of the business. After all, an outsourcing provider is there to sustain their business and by ensuring data protection, their reputation as reliable and trustworthy vendors can only benefit their enterprise making it a win-win situation for both parties.

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