Even before the pandemic’s disastrous effects on the global business scene, most tech companies were struggling to keep up with challenges that seemed to crop up regularly. These challenges originated from a multitude of sources and there was no saying where a mini-disaster would strike next.
This was, and is, especially true where outsourcing is concerned.
And yet, IT outsourcing (ITO) is slowly but surely rising. This is an industry-wide phenomenon; from startups to giants on the global stage, almost every entity embraces outsourcing at several levels. The reasons behind these decisions have been discussed ad nauseum.
Big corporations can bring down operational costs, save huge amounts that would otherwise have been routed to R&D and bridge the talent gap that is a nasty pain point for most companies.
This Gartner study showcases very aptly how the shortage of talent was forcing the biggest tech companies in the United States and across Europe to advocate outsourcing. Such is the talent crunch that some enterprises are unable to implement several emerging technologies.
But the other side of the coin is worth having a look at. There is an enormous amount of risk associated with outsourcing operations and services. These include, but are not limited to, the following:
- Data breaches
- Chances of theft of proprietary or patented technologies
- PR nightmares
- Dicey management techniques for remote teams
- Quality control issues
Of these, the 2 biggest challenges are to prevent data breaches and overall operational security.
These are areas which require constant monitoring. If your organization is tying up with an outsourcing partner, you (and everyone else involved in specific projects) must deal firmly with the biggest challenge: how to ensure data privacy without ending up in a micromanaging loop of constant mishaps.
Refining data protection technologies for the next decade
Modern problems require modern solutions, as the saying goes, and it is true for data protection and the legislations which deal with such stumbling blocks.
With that in mind, let’s take a look at the extant ideas that deal with how to ensure data privacy and how they are actually changing in keeping with the dynamics of modern businesses.
1. A better idea of the partner countries & their data protection laws is essential
Before you outsource services to India or any comparable economy where a lot of professional expertise is already present, your organization must be acutely aware about the socio-cultural makeup of the partner country and also the data protection legislation in place.
The United States, surprisingly, lacks a unified law that cracks down on data theft and leakage. Instead, all such crimes are probed by the individual States using their own laws. Naturally, there are several lacunae.
States like California with its CCPA while New York has its much-vaunted NY-SHIELD program.
When your company outsources to other countries, they have to learn and adapt to very different legal issues. The EU has its GDPR. Brazil, one of the biggest economies in South America, has its LGPD suite which was passed in August 2021.
In India, there is still some debate on a comprehensive data protection and privacy laws. After much criticism, a draft bill was withdrawn after criticism from various quarters.
One major future-first strategy for any firm keen on outsourcing is to understand the ground realities of the partner country.
2. Taking stock of cybersecurity & improving it
The Cloud is a rather unsafe place; for corporations to work in secure environments across continents, all cybersecurity holes must be plugged. Before you take your outsourcing partner onboard, your company’s resident IT experts must be satisfied that the other firm is using the latest software and hardware, is following the latest security guidelines, has the necessary infrastructure to identify and stop a sudden attack on their servers and databases and so on.
Besides, the outsourcing partner’s data protection technologies must be able to withstand simulated penetration tests and should have a peer-reviewed plan which will kick in once there’s an emergency.
Considering that cybercrimes might cause losses of around $10 trillion by 2025, future-proofing this point is a no-brainer.
3. Greater investments in security management tools and certifications must be fast-tracked
This will result in the faster upskilling of the people responsible for ensuring the safety of data and warding off hacking attempts. If the firm that’s going to be your outsourcing partner shows an active interest in certifications like the internationally accepted ISO-27001 (which is actually a benchmark for security standards used by the biggest IT companies), opt to partner with that organization.
In an age where cybercrimes are evolving and mutating daily, such proactiveness is a must-have.
Security management tools can include everyday browsers like Opera (thanks to its built-in VPN which does away with the need for installing separate software) and all the way up to the cutting-edge technologies that IBM showed off in February 2022.
The all-new data validation and verification services provided by IBM’s ‘Cyber Vault’ are a set of tools which are ‘incorruptible’.
If your outsourcing partner/s has almost all of these data management solutions, you are probably in very good company!
4. Now is the time to take out a cyber insurance policy!
In case you are slightly taken aback, rest assured that such policies exist, are used by some of the biggest corporations of the world, and the incidences of such policies are gradually rising.
The sophistication of ransomware attacks has been rising over the last decade-and-a-half. Highly advanced malware that was designed to break into databases includes some infamous names like SamSam, Petya, WannaCry, TeslaCrypt, Locky and Bad Rabbit.
To avoid such financial catastrophes, your organization can take out a cyber insurance policy. It’s quite common in the US and Europe, and GlobalData’s latest reports project a $20 billion insurance market globally within the next 3 years.
The 3 tell-tale pillars of a reliable ITO partner
Now that we have covered a bit of ground, let’s look at 3 very broad areas which can help determine if your chosen outsourcing agency is above par.
- Does it have ample physical security like a state-of-the-art data center with guards, CCTVs and all related bells and whistles?
- Does it have the most modern technological armor including SIEM, DLP and a platoon of firewalls? If there are such real-time threat analysis & detection systems up and running, it will automatically answer your original query of how to ensure data privacy!
- Finally, is there adequate administrative security? This includes secured/hierarchy-bound access to sensitive data, NDAs forged in concrete, access to audit reports and complete transparency on what your ITO is doing with your data.
Lastly, try strategizing in-house first before reaching out to an outsourcing firm. It helps in more ways than you would imagine.
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