Outsourcing is the business practice of hiring a party outside the
company to perform services or create goods that have traditionally
been performed by the company's own employees and staff. b
Companies often take such a step because of cost considerations, as
outsourcing can often help a company achieve cost reductions. As
such, it can affect a wide range of work, from customer support to
manufacturing to back office (James). b While such measures can
allow companies to save money and focus on more profitable
business development. b But it also has the obvious drawback that
communication between the company and external vendors may not
be very transparent. As a result, when multiple parties have access
to sensitive data, threats to confidentiality and privacy are increased
and security risks are heightened.
Everyone has a responsibility to be vigilant in protecting their
personal information, and then even more so as a company. As a
company, it is their responsibility to ensure that the data is protected
in the most secure way possible to maintain public confidence.
Companies should have policies in place to protect the data they
collect from customers, and these policies should be updated as the
technology used to do business evolves and changes (Root).
Responsible companies should establish a clear policy outlining their
commitment to privacy protection to ensure that data privacy is
maintained. This commitment may also be a key item in a company's
code of ethics. The privacy policy should also apply and enforce the
roles and responsibilities of those responsible for the processes and
procedures related to privacy and data protection (Stewart). To
ensure privacy and confidentiality in the outsourcing process, the
company must reach an agreement with the outsourcer that privacy
will not be disclosed. The company needs to clearly state this in the
contract, emphasizing the importance of the content and the
measures to be taken in case of breach. At the same time, companies
need to perform the necessary checks internally to understand the
reasonableness and safety of these outsourced activities. b Avoid
outsourcing tasks that are very risky.
Reference:
Romney, M. B., Steinbart, P. J., Summers, S. L., & Wood, D. A. (2020).
Accounting Information Systems (15th ed.). Pearson Education (US).
James, Margaret. June 18, 2022. b Outsourcing: How It Works in
Business, With Examples
https://www.investopedia.com/terms/o/outsourcing.asp
Root, George. What is the Responsibility of Business to Prevent
Identity Theft?
https://smallbusiness.chron.com/secure-company-data-16448.html
Stewart, Douglas. Feb 25, 2021. b Data Privacy is a Business
Responsibility
https://thepenn.group/blog/cybersecurity/data-privacy-is-a-
business-responsibility/
