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How Can Software Outsourcing Companies Keep Client’s Data Confidential?

When we analyze the risks that are involved in the software outsourcing business, client confidentiality falls into the most serious category. Software outsourcing companies must ensure to prevent access to their client’s confidential data in the wrong hands. Highly sensitive data such as intellectual property, consumer data, are constrained to a variety of restrictions in most of the countries.

Most businesses love to partner with trustworthy vendors. Compromising on the sensitive information of clients could harm this trust and could result in the penalization of your company. Since confidential data of clients serves as a highly valuable business asset, software development companies should protect them.

In this article, we will provide with you some deep insights into how can Software Development Companies in India keep client’s data confidential.

Things to consider by software outsourcing companies to keep client’s data confidential

1. Identification of Your Intellectual Property:

Every software development company must ensure to ask their partners to provide a record of their intellectual property such as patents, copyrights, and trademarks before signing a project agreement. The companies must also ensure that the legal documents clearly describe intellectual property. A software development company must check the intellectual property laws of the country in which their partner is based. This is only required if you are allying with a business from another country

2. Non-Disclosure Agreement:

A non-disclosure agreement (NDA) is very important in how can software outsourcing companies keep client’s data confidential. Signing a non-disclosure agreement (NDA) with your vendor is the safest way to keep your confidential data legally secure. NDA restricts the access of information among third parties, such as competitors or the general public. NDA only provides legal coverage to intellectual data breaches and assurance of compensation from the vendors that have violated the agreement. 

What you must know before signing a Non-Disclosure Agreement:

  • You should have a clear idea about the possibilities for potential information breaches such as unauthorized distribution, duplication, reverse engineering, etc and these must be mentioned in the NDA.
  • Outsourcing companies must ensure to add a clause to the NDA mentioning about the release from liability. If the information breach is done by external public sources, other than both parties
  • Software development companies must ensure to draft high-quality agreements since the quality of these agreements directly affects the quality of the relationship between both parties.

Other than legal documents such as NDAs, data security and confidentiality can be improved by software outsourcing companies by implementing various methods such as Data encryption, securing sensitive data with user IDs and passwords, and a variety of other methods. We will discuss in detail about these methods throughout this article.

3. Maintaining High Physical Security

While digital security plays an important role in preventing data breaches, software development companies should also focus on maintaining high physical security. Nowadays software development companies don’t give much importance to Physical security since sensitive information is usually stored in the cloud. A strategic approach to physical security usually involves limiting the number of people accessing your data centers and workstations. These can include, Assigning ID badges to visitors who access your facility, installing alarms to detect unauthorized entry, installing security cameras inside your office, performing regular security checks by authorized security personnel, installing metal detectors, body scanners, and monitoring control room.

4. Define an Efficient Data Privacy Policy

When dealing with sensitive data, a software outsourcing provider must track and manage the data access logs of the users. This helps to provide transparent access and can also be used for audit compliance. Access transparency is an important aspect that must be incorporated into your data privacy policy.

5. By Efficiently Managing Cloud Configuration Key

Nowadays most of the software outsourcing providers rely on cloud infrastructure. It is important to efficiently manage the security of the encryption key when a third party company is managing cloud infrastructure. Failure to efficiently manage security encryption keys could result in data breaches. Key access must always be secured with strong passwords, this will prevent access by unauthorized users.

6. Having a Disaster Recovery Plan

Disasters are unavoidable, Natural or man-made disasters can cause severe damages to data farms or your onsite facility that can ruin applications, databases, or workflows. Having a disaster recovery plan can completely mitigate this issue. The disaster recovery plan must be tested regularly and should be updated according to the needs.

7. Service Level Agreement 

Service level agreement plays an important role in the outsourcing business. Service level agreements should indicate the handling of special requests, which includes executing interfaces between information security applications and software.

8. Adopt Best Practices for Securing Source Code

Securing the source code is one of the important aspects of the security policies of any software development company. Source code exposure could result in data thefts, reverse engineering, and other malicious cyber practices. Inefficiency in securing source code by the outsourcing vendor will expose the intellectual property of their clients to a third party or their competitors which includes their highly strategic business ideas.

Software development companies can contain this issue by creating a thorough security policy their organization that covers exclusively for business units that are involved in code development. Thorough vigilance must be enacted by the outsourcing companies to monitor the email activity of developers, password sharing among developers, and the use of external removable devices. 

Wrapping it up

How can software outsourcing companies keep client’s data confidential? This is a common concern among the companies that want to outsource their projects. Some of the security concerns of keeping the confidential data of clients will be adequately addressed in the future by adding new security features.

However, software outsourcing companies must combat these problems with the currently available tools and resources. We hope you got a rough picture of best practices that are involved in keeping the client’s data confidential by the software development companies.

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