IT Outsourcing and Data Security: How to secure data in outsourcing partnership?
In today's business landscape, outsourcing is a common practice for many organizations. However, with the increasing reliance on third-party providers, data security has become a paramount concern. This article explores the risks associated with outsourcing data, offers strategies to ensure its security, and highlights the importance of certifications, policies, and procedures.
The Risks of Outsourcing Data
Outsourcing data carries inherent risks, including data breaches, compromised data integrity, and unauthorized access. These risks are so significant that according to Gartner, by 2025, 60% of organizations are expected to prioritize cybersecurity when choosing third-party partners.
Furthermore, compliance with regulations like GDPR or HIPAA is crucial when outsourcing. Ensuring your providers meet these standards is essential to avoid penalties and maintain your reputation.
Outsourcing data involves entrusting sensitive information to external entities, which introduces inherent risks, since specific vulnerabilities arise from the relationship between organizations and third-party providers:
Loss of Control: Organizations cede a degree of control over data management and security, potentially leading to inconsistencies in protection measures.
Vendor Dependency: The security of your data is only as strong as the weakest link in the chain. If vendors lack robust security practices, your data is at risk.
Data Transit Risks: Data transferred between your organization and the service provider is susceptible to interception and unauthorized access.
Insider Threats: Variations in hiring and internal controls between organizations and vendors can increase the risk of insider threats from service provider employees.
Ensuring Data Security When Outsourcing
To mitigate risks and safeguard data during outsourcing, consider these best practices:
Data Access and Permissions:
Implement stringent measures to prevent unauthorized access, disclosure, and data transfer.
Limit access permissions based on job requirements.
Enforce multi-factor authentication for all users.
Monitoring and Awareness:
Utilize tools for real-time monitoring of user activities.
Conduct regular information security training for offshore employees.
Provide secure devices with pre-approved security controls.
Device and Work Environment Controls:
Encourage private, secure workspaces for offshore employees.
Limit the use of personal devices for work purposes.
Prohibit the recording of sensitive information using mobile devices, cameras, or paper and pens.
Privacy and Compliance:
Conduct thorough risk assessments and implement risk management measures.
Develop and enforce policies for privacy, compliance, and security incident management.
Standards and Framework Compliance:
Ensure compliance with relevant standards such as HIPAA and PCI DSS, including physical and technical safeguards, data retention policies, and encryption for data transmission.
Important Data Security Outsourcing Certifications
Certifications demonstrate a provider's commitment to data security. Key certifications include:
ISO 27001: A widely adopted cybersecurity framework that ensures providers identify risks, assess implications, and implement systematic data controls.
PCI DSS: A set of security standards designed to protect credit card information.
ISO 9001: Emphasizes quality management systems that indirectly enhance data security by ensuring efficient, well-documented, and continually improved processes.
Outsourcing Providers' Data Security Policies and Procedures
Reputable providers will have robust data security policies and procedures in place. These may include:
Information Technology Policies: Customizable workstation and server environments, unified threat management, endpoint security, and network resilience.
Organizational Controls: Information security policies, conduct guidelines, and confidentiality clauses in employment contracts.
Technical Controls: Advanced system security measures, network and device security protocols, and restricted IT administrator access.
Physical Controls: Onsite security measures, controlled access, and fire safety protocols.
Human Resources Policies: Extensive pre-employment screening, contractual and compliance measures, and strict off-boarding processes.
Auditing Outsourcing Providers' Data Security Controls
When evaluating providers, inquire about their certifications, policies, procedures, technical safeguards, access management, security audits, incident response plans, data transit security, staff training, and backup and disaster recovery strategies.
In the outsourcing world, certain certifications act as powerful indicators of trust and security, showcasing a provider's dedication to protecting data. ISO 27001 is the most widely recognized, with an impressive 48% of companies implementing this cybersecurity framework. An ISO 27001 certification assures clients that the provider is proactive in identifying risks, evaluating potential consequences, and implementing systematic data controls to minimize any organizational damage.
The Payment Card Industry Data Security Standard (PCI DSS) focuses specifically on securing credit card information. PCI DSS-compliant providers adhere to rigorous security standards to safeguard cardholder data from fraud and breaches.
While not solely a cybersecurity certification, ISO 9001 emphasizes quality management systems. When applied to IT services, it indirectly enhances data security by ensuring processes are efficient, well-documented, and subject to continuous improvement. This certification demonstrates a provider's commitment to delivering services that meet both customer expectations and regulatory requirements.
Can Data Protection Be Outsourced?
Yes, many organizations outsource various data security roles and teams, including cybersecurity analysts, penetration testers, security architects, incident response specialists, and more. Offshoring these roles to the same provider handling other outsourced functions can enhance your security posture by ensuring close collaboration and real-time defense.
With the high prevalence of up to 95% of human error in data breaches, robust data security policies and procedures are crucial when outsourcing. While approaches may vary, here's a guide to the kind of comprehensive security practices you should expect.
Information Technology Policies
Customizable Environments: Adaptable workstation and server environments, including thin client desktops and the ability to disable USB ports or optical drives, allow for tailored security measures.
Threat Management: Unified threat management devices provide comprehensive data and content filtering for enhanced protection.
Endpoint Security: Centralized desktop security management and robust defenses against malware and ransomware.
Network Resilience: Redundant infrastructure with automatic fail-over ensures uninterrupted service and data accessibility.
Organizational Controls
Information Security Policy: A clear policy prohibiting unlawful activities, unauthorized system use, and personal gain activities.
Conduct Guidelines: Confidentiality clauses in contracts and restrictions on unsecured Wi-Fi, data sharing, and personal device use.
Technical Controls
System Security: Antivirus software, hard drive encryption, and multi-factor authentication for enhanced system protection.
Network & Device Security: Regular patch updates and tools to scan for unauthorized applications, with restricted IT admin access.
Physical Controls
Onsite Security: Surveillance cameras, workstation protection, and special work floors with additional security protocols.
Controlled Access: Network-driven proximity cards and fire safety measures for comprehensive physical security.
Human Resources Policies
Pre-employment Screening: Thorough background checks, including identity, employment, academic, credit, and criminal record verification.
Contracts & Compliance: Confidentiality and intellectual property clauses in contracts, and support in tailoring NDAs and non-competes.
Auditing Providers
To assess a provider's security, ask about their certifications, policies, compliance measures, technical safeguards, access management, audits, incident response, data transit security, staff training, and backup/disaster recovery strategies.
Remember, thorough due diligence is vital when selecting an outsourcing partner. Ensure they have comprehensive data security measures in place to protect your sensitive information and minimize risks.
Conclusion
Outsourcing can offer significant benefits to organizations, but it's crucial to prioritize data security. By understanding the risks, implementing best practices, and partnering with reputable providers with robust security measures, you can confidently navigate the outsourcing landscape while safeguarding your valuable data assets. Remember, proactive planning and vigilance are key to maintaining data security in an increasingly interconnected world.