Risk Three: IP & Data Security

IP & Data Security - Companies considering outsourcing their software development need to know and protect themselves against the risks related to the Intellectual property violations as well as Data Security. In order to mitigate this risk, clients need to check with the vendors on steps that they will take to protect their IP and the sensitive data such as customer information, employee information, financial data and market research data. This should be done during the Vendor Selection process.

Clients should ensure that selected vendor has the well documented Information Security Management (ISM) Policy. Vendors need to provide a dedicated project and data server to their clients with audit control access on all the servers. Client should check that the Vendor’s facility is secured with smart card control access and vendor’s development team members have signed the Confidentiality agreements. In addition, the development contract should include clauses for Non-compete, Non-disclosure and non-solicitation.