Data risks are an inherent concern for companies

28th November 2013 | By Mouseworld Now Correspondent | 1 Comment

vishal-guptaOutsourcing has become quite common in recent years, especially in the field of Information Technology, so that companies can focus more on their core business. In addition to this, outsourcing provides a better and a cheaper means of workforce, that renders the company competitive.

However, privacy is a rising concern for several organizations. Data risks are an inherent concern for companies that outsource. But with the benefits of reduced cost, improved efficiency – and, in some cases, the increased expertise in outsourcing – there arises a need to provide outsourcers with access to some of the most sensitive corporate data assets. A certain amount of risk is a natural part of doing business. But when it comes to data, many companies have been forced to accept more risk than they might otherwise be comfortable with when the bottom line benefits of outsourcing outweighed the risks. That tide is now turning and it is turning for a number of reasons. Usually when business services are outsourced, these outsourcing companies are given access to a variety of confidential company information and employee data that might lead to a bad case. Whether they take the form of compliance issues, legal liability, and brand risk or customer concern, companies that choose to employ outsourcers have to handle inevitable security challenges.

Given the sensitive nature of employee related data, privacy concerns are particularly significant for companies outsourcing human resources functions. HR Outsourcing (HRO) providers, on the other hand, should be aware of these concerns and how to address them. Organizations undertake HRO for several good reasons, but good only if your selected provider can deliver the expected services profitably and also at an acceptable security expense.

These services should be delivered with superior data security and privacy, along with flexibility to address competitive and futuristic needs while meeting regulatory compliances. At the same time, consistent (year-over-year) mutual discussions and up-gradation of their proposition with continuous cost reductions is a must.

As companies hire or contract out to organizations both within the country and outside, effective security measures must continue to be put in place. Wherever possible, background checks be done and processes should be implemented to effectively monitor activities of data access and transactions closely. In the cases where the cost of security may outweigh the benefits of outsourcing, the organization should re-evaluate its long-term outsourcing strategy and determine if certain services or work should simply be retained within the company.

A lot of companies who want to leverage by outsourcing their HR work are skeptical because a lot of employee data will lie in the hands of HRO vendor. Also companies who have already outsourced always have a thought in back of their mind that their very important data is entrusted with the vendor and they make sure that timely audits are done at vendor site to identify and rectify risks.

Information Rights Management (IRM) can help to a large extent here. Apart from controlling the usage rights on documents in a work-flow, the IRM system also maintains a comprehensive record of all the activities performed by different users on the document. A complete history of Who (users) has done what (view, edit, print, copy-paste, print-screen, etc) with the information, When (time) and from Where (location and computer) is completely tracked and logged. This helps organizations comply with regulatory norms like ISO 2700-1, PCI, HIPPA, etc.

It is in the balancing of all these factors above that the decision becomes difficult. Most companies consider outsourcing mainly because this would provide a reduction in costs. Experts (CIO’s ABC) consider though that lower costs constitute only an elemental factor for considering outsourcing. After researching off-shoring and near-shoring options, companies typically realize the low price sought should be balanced by other considerations, some of them mentioned above – thus, the cost of outsourcing in general and of labor in particular should not be, and typically is not, the only decision criteria.


By Vishal Gupta, CEO, Seclore Technologies

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Subir Mookherji Says:
December 5th, 2013 at 10:24 pm

I fully agree with Vishal. There are very few organization …, who has the clear visibility of the Risk. Organization starts reacting only when they receive any adverse report from the Auditors. Undoubtedly, Outsourcing bring lots of savings, but at the same time cost of risk associated to outsourcing is also very high, which generally not being computed while taking such decision. Hence outsourcing is effective if the associated risks are eliminated through much cheaper (than the cost of the Risk) technology solution.

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