Information Security and Data Protection in IT Outsourcing: What companies need to consider

IT-Outsourcing: Datenschutz und Informationssicherheit

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March 21, 2023

Information Security and Data Protection in IT Outsourcing: What companies need to consider

IT Outsourcing

Anyone who deals intensively with IT outsourcing will quickly arrive at the complex of topics of IT information security and data protection. Internal company data, information and business secrets are among the most valuable assets of a company. We explain where the risks lie and which points you need to consider when choosing an IT outsourcing partner.

What is IT outsourcing?

Outsourcing enables companies to reduce costs in the long term, increase efficiency and focus on their own core competencies by having certain task areas taken over by external service providers or by acquiring additional capacities. The acute IT skills shortage is prompting companies to consider alternative options compared to traditional staffing. In doing so, they gain competitive advantages and increase their flexibility by securing the expert knowledge and resources of external IT experts, such as in the areas of application development, cloud computing, IT security, system integration or database and network management.

What is information security?

IT information security fulfils the following three protection goals by taking appropriate measures in technical and non-technical systems:

  • Confidentiality: Only authorized persons may view, edit and manage data and information.
  • Integrity: The correctness of data and information must be ensured at all times.
  • Availability: Data and information must not be lost. Access for authorized persons must be ensured.

What distinguishes data protection from information security?

Data protection is a component of the task complex of information security. Compliance with data protection through security measures protects the privacy of every individual and guarantees the right to informational self-determination by preventing misuse of data. Information security goes beyond this by aiming to minimize risks for companies and organizations as well as to prevent economic damage.

Why is information security important?

Ensuring information security is one of the fundamental tasks of companies to ensure business continuity as well as to avert financial damage, loss of trust and loss of reputation.

  • Meeting legal requirements that require companies to keep stored and processed information secure and protected from unauthorized access.
  • Protecting sensitive information – such as employee, customer and financial data, strategic plans and trade secrets – the disclosure or even loss of which causes lasting damage.
  • Protect against cyber attacks – i.e. threats from ransomware, phishing, malware, etc. – to ensure the integrity and availability of data and systems.

What is Security Awareness?

Companies have a duty to increase their employees’ awareness of threats and risks through the use of technology and automated processes.

Only employees who are able to recognize threats from social engineering, malware, DDoS attacks or spyware can help to ward off cyber attacks and minimize risks. This includes avoiding passwords that contain personal data, using public WLAN networks, installing unauthorized and/or outdated software, etc.

What all is part of IT security?

  • Data security: Protecting data from theft, disclosure and loss through access controls, encryption and data backups.
  • Network security: Protecting corporate networks from unauthorized access through hardware and software firewalls, VPNs, attack detection and prevention systems, etc.
  • Application security: Regular penetration tests and checking of systems as well as software for vulnerabilities in order to ward off threats, e.g. through hacking or SQL injections.
  • Computer security: Optimizing configurations and implementing firewalls, anti-virus software and all available security patches to protect devices from viruses, spyware and adware.
  • Physical security: Device and asset protection, e.g. through video surveillance as well as physical access controls and alarm systems.

What should be considered in IT outsourcing with regard to data protection and information security?

Observing legal principles when outsourcing is an important basis for a successful and long-term partnership. Companies must take special care when selecting an IT outsourcing partner:

  • Determination of technical-organizational procedures (TOM)
  • Assignment of authority to issue directives
  • Safeguarding business secrets and IT information security
  • Data protection in outsourcing
  • Data access and storage rights
  • Determination of audit rights and quality assurance measures
  • Ensuring actual controls
  • Regulation of documentation and data return

Risks of cooperating with unprofessional IT outsourcing partners or freelancers

  • Cultural differences: There may be cultural differences in the approach to IT security and data protection, which can lead to misunderstandings and misinterpretations.
  • Legal framework: Countries outside the EU in particular have different legal frameworks, especially with regard to data protection and IT security. Companies must ensure that the selected outsourcing partner complies with the applicable laws and regulations.
  • Lack of transparency: Another risk when selecting an outsourcing partner is the lack of transparency in security practices and data handling.
  • Communication problems: Misunderstandings can arise due to possible language barriers, especially if employees of the outsourcing partner are not fluent in English.
  • Third-party vendor management: Companies need to ensure that any third-party vendors that the outsourcing partner may use to perform the services have also implemented the required IT security and data protection measures.
  • Cybercrime: Companies need to ensure that their outsourcing partner has implemented robust security measures against cyberattacks.

Advantages of working with a professional outsourcing partner

A professional IT outsourcing partner offers you the protection of legal foundations as well as IT information security at all levels of cooperation. Transparent structures that regulate the cooperation and data protection in outsourcing in every detail offer you maximum security.


What is IT outsourcing?

IT outsourcing is the process of outsourcing IT services and tasks to external service providers in order to reduce costs, increase efficiency and gain access to specialized expertise.

What is the difference between data privacy and information security?

Data privacy focuses on the protection of personal data, while information security encompasses more comprehensive measures to protect all types of information from threats.

What is security awareness?

Security awareness refers to the awareness and knowledge of employees about threats and risks when using IT systems to prevent cyber-attacks and increase security.

What factors are included in IT security?

IT security includes data security, network security, application security, computer security and physical security.

With IT outsourcing, what should companies consider regarding data privacy and information security?

Companies should ensure that the outsourcing partner implements technical and organizational measures (TOM), complies with data protection guidelines, clearly defines instruction authorizations, specifies data access and storage rights and carries out regular checks and quality assurance measures.