Data protection is a critical concern for businesses and consumers around the world. The widespread desire to keep data safe is driving the implementation of stringent privacy laws like the General Data Protection Regulation (GDPR).
Notably, the GDPR requires many organizations to appoint a Data Protection Officer (DPO) to oversee their data protection practices. While some businesses choose to employ an internal DPO, others are now exploring outsourcing options.
Let’s cover the concept of outsourced DPO services, explore the position’s responsibilities, determine which businesses need a DPO, understand the reasons to consider outsourcing, and compare internal DPOs with external DPO services.
The DPO’s Role
Before covering the concept of outsourced DPO services, it’s crucial to understand the role of a DPO and the responsibilities they carry.
A Data Protection Officer serves as an independent advocate for data protection within an organization. They’re responsible for ensuring compliance with data protection laws, implementing data protection policies and practices, and acting as a contact point for individuals and supervisory authorities regarding data protection matters.
Responsibilities of a DPO
A DPO’s responsibilities are multifaceted and encompass various aspects of data protection. Some key responsibilities include:
- Monitoring Compliance: A DPO is responsible for monitoring the organization’s compliance with data protection laws and regulations. This involves conducting and overseeing regular audits, assessments, and reviews to identify any potential risks or areas of non-compliance.
- Advising on Data Protection: DPOs provide guidance and advice to their organizations on data protection matters. They assist in developing and implementing data protection policies, procedures, and practices aligning with legal requirements and industry best practices.
- Overseeing Data Subject Request Fulfillment: DPOs oversee and guide the fulfillment of privacy requests or data subject requests (DSRs) asking to access, rectify, or erase personal data. They ensure the prompt fulfillment of data subject access requests (DSARs) and other request types to keep companies GDPR compliant.
- Data Protection Impact Assessments (DPIAs): DPOs monitor the conduction of privacy risk assessments, which assess the potential risks and impacts of data processing activities on individuals’ privacy. They help identify and mitigate risks to ensure privacy considerations are integrated into the organization’s processes and systems.
- Liaising with Supervisory Authorities: DPOs serve as a liaison between the organization and supervisory authorities, such as data protection authorities. They facilitate communication, handle regulatory inquiries, and act as a point of contact for data protection-related matters.
Which Businesses Need a DPO?
The requirement for a DPO is not universal for all businesses. According to the GDPR, businesses must appoint a DPO if they meet specific criteria, including:
- Public Authorities: Public authorities and bodies, regardless of their size, must appoint a DPO.
- Regular and Systematic Monitoring: Businesses that engage in large-scale processing of personal data or conduct systematic monitoring of individuals on a large scale are obligated to have a DPO.
- Sensitive Data: Organizations processing sensitive categories of data, like health data or data related to criminal convictions, are subject to DPO requirements.
- Obligation Under National Law: Some countries may have their own laws that stipulate the mandatory appointment of a DPO for certain types of organizations, regardless of the GDPR requirements.
Why Would Businesses Outsource Their Data Protection Officer?
While some businesses may have the resources and expertise to appoint an internal DPO, others may choose to outsource this role for several reasons. Let’s explore some of the key factors that could drive businesses to consider outsourcing their DPO:
- Cost-Effectiveness: While pricing varies, outsourcing a DPO can be a cost-effective solution — especially for small and medium-sized enterprises (SMEs). Hiring a full-time internal DPO may be financially burdensome, whereas outsourcing allows businesses to access the expertise of a DPO without the overhead costs.
- Access to Expertise: Data protection is a complex field requiring specialized knowledge and skills. Outsourcing the DPO role allows businesses to tap into the expertise of professionals with a deep understanding of data protection laws, regulations, and best practices.
- Flexibility and Scalability: Outsourced DPO services offer flexibility and scalability, allowing businesses to adjust the level of service as needed. As business requirements evolve, outsourced DPO services can adapt to accommodate changes in the data privacy organization without disrupting operations.
- Independent Perspective: External privacy professionals bring an unbiased and independent perspective to the organization’s data protection practices and overall privacy program. This can help identify potential gaps, provide objective advice, and ensure compliance without internal conflicts of interest.
Are there Outsourced DPO Services?
Yes, there are specialized firms and consultants offering outsourced DPO services. These service providers typically have a team of experienced DPOs who can fulfill data protection responsibilities on behalf of the organization. They work closely with businesses to understand their unique requirements and tailor their services accordingly.
Is an External DPO Cost-Effective?
The cost-effectiveness of an external DPO depends on various factors, including the size and nature of the business, the level of data processing activities, and the scope of the required DPO services. For many businesses, outsourcing the DPO role proves to be more cost-effective than hiring a full-time internal DPO.
The organization can leverage the expertise of an external DPO while avoiding the expenses associated with recruitment, training, and employment benefits.
Internal DPO vs. External DPO: Which is Better for Your Business?
The decision between employing an in-house DPO or outsourcing the role of the DPO depends on the specific circumstances and needs of the business.
Here are some considerations to help determine which option may be better for your organization:
- Resources and Expertise: Assess your organization’s resources and data protection expertise. If you have the necessary in-house capabilities and capacity, an internal DPO may be a viable option. Otherwise, outsourcing can provide access to specialized skills and knowledge.
- Cost: Consider the financial implications of hiring an internal DPO, including salary, benefits, training, and ongoing professional development. Compare these costs with the fees associated with outsourced DPO services to determine the most cost-effective solution.
- Compliance Needs: Evaluate the complexity of your data processing activities and the level of compliance requirements. If your business engages in extensive data processing and faces stringent regulatory obligations, an internal DPO may offer more dedicated support. However, if your compliance needs are more manageable, outsourcing the DPO role can provide adequate expertise.
- Independence and Objectivity: Consider whether an independent perspective is valuable to your organization. An external DPO can provide an unbiased assessment of your data protection practices and ensure that GDPR compliance is maintained without internal bias.
The role of a Data Protection Officer (DPO) is gaining prominence as data protection becomes increasingly crucial in the modern business landscape.
While some businesses opt for an internal DPO, others are turning to outsourced DPO services or DPOaaS. Outsourcing the DPO role can offer several advantages, including cost-effectiveness, access to expertise, flexibility, and an independent perspective.
By carefully considering their specific needs, resources, and compliance requirements, businesses can make an informed decision on if an internal or external DPO is better suited to their data protection needs. Ultimately, the goal is to ensure data protection practices are in line with regulatory requirements and that consumer privacy rights are respected and safeguarded.