Information security outsourcing involves contracting an outside provider to manage and deliver security services and operations. This allows companies to offload certain security functions rather than handling them in-house.
The practice of outsourcing information security emerged in the 1990s as companies sought to reduce IT costs. By delegating security operations to specialized third-party providers, organizations could gain access to advanced security expertise and technology without large capital investments.
There are several key reasons companies choose to outsource aspects of their information security:
- Access to skilled security talent and expertise
- Improve focus on core business activities rather than security operations
- Introduce efficiencies and optimize security spending
- Leverage advanced threat detection and response capabilities
- Shift from capital expenses to operating expenses
While outsourcing infosec does come with risks, many organizations find the benefits outweigh the drawbacks and strategically outsource certain security functions.
Benefits of Outsourcing Infosec
Outsourcing information security functions can provide organizations with several benefits:
Cost savings – Outsourcing to managed security service providers (MSSPs) allows organizations to convert fixed costs into variable costs, reducing IT security budgets by up to 50%. MSSPs have economies of scale and specialized expertise that result in lower costs for the organization. Organizations only pay for the services they need rather than hiring full-time staff.
Access to expertise – MSSPs maintain staff of specialized security experts and manage security for multiple clients, allowing them to stay on top of the latest threats, technologies, and best practices. Organizations gain access to high-level expertise they likely could not replicate internally. Outsourcing frees up internal staff to focus on core business activities.
Focus on core competencies – Organizations can focus internal resources on core business operations and outsource non-core functions like infosec to specialized providers. This allows concentration of efforts on primary revenue-generating activities.
Scalability – MSSPs can scale security capabilities up or down as needed. Organizations avoid costs of hiring, training, and maintaining full-time infosec staff to meet fluctuating security needs.
Risks and Challenges of Outsourcing Infosec
Outsourcing information security functions can provide many benefits, but it also comes with significant risks that organizations need to consider and manage. Some of the top risks of outsourcing infosec include:
Loss of control – When outsourcing infosec functions, organizations give up direct control over those operations and must rely on the vendor to properly manage them. This can make it harder to ensure policies and procedures are being consistently followed.1
Security risks – Outsourcing security functions can potentially expose an organization’s systems and data to greater risk if the vendor’s security practices are not up to par. Proper vendor vetting and ongoing oversight is essential to mitigate this risk.2
Communication challenges – Outsourcing can make communication more difficult due to geographic, cultural, and time zone differences. Poor communication with infosec vendors can lead to misunderstandings and issues not being promptly addressed.3
Hidden costs – Outsourcing contracts may appear cheaper upfront but can incur many hidden costs over time such as knowledge transfer, travel, and vendor management. Organizations should do a thorough cost analysis when considering outsourcing.
Infosec Functions Commonly Outsourced
Many companies choose to outsource certain information security functions to managed security service providers to reduce costs and leverage external expertise. Some of the most commonly outsourced infosec functions include:
Managed security services – Outsourcing 24/7 monitoring, management and response for security devices and systems is popular since it requires specialized staff and infrastructure. A managed security services provider (MSSP) can monitor networks, endpoints, cloud environments and more to detect threats and incidents.
Vulnerability testing – Identifying vulnerabilities across an organization’s IT infrastructure is critical but time consuming. Outsourcing periodic vulnerability scans and penetration testing to an experienced firm can reveal exploitable weaknesses.
Compliance auditing – Staying compliant with regulations like HIPAA, PCI DSS and GDPR requires regular audits. Outsourcing to qualified auditors can ensure independent and rigorous assessments are conducted.
Incident response – Having the expertise to quickly isolate, investigate and remediate a security incident is key but difficult to maintain in-house. Retaining a specialized incident response firm allows faster containment when breaches occur.
Selecting an Infosec Outsourcing Provider
Choosing the right information security outsourcing provider is crucial for protecting your organization’s data and systems. When evaluating potential providers, focus on assessing their capabilities, experience, certifications, reporting practices, and communication style.
- Look for providers with proven experience handling security for organizations similar to yours. Ask for client references and case studies. According to Verizon, a leading security provider selects partners with at least five years of experience serving clients in your industry.
- Evaluate the provider’s capabilities in key security services like threat monitoring, incident response, vulnerability assessments, compliance audits, and more. Make sure they can deliver the specific services you need.
- Require certifications like ISO 27001 to validate the provider’s expertise and practices. According to eSecurity Planet, certified partners undergo regular audits to maintain compliance.
- Review the provider’s reporting process. You need regular, detailed updates on threats detected, response actions taken, vulnerabilities found, and compliance status.
- Assess communication skills and culture fit. According to LinkedIn, the provider should communicate well and collaborate effectively with your team.
Taking time to thoroughly vet potential partners will help you select an outsourcing provider with the right mix of capabilities and experience to protect your organization.
Developing the Outsourcing Contract
One of the most critical aspects of outsourcing information security functions is developing a comprehensive contract that protects the client’s interests. The contract should clearly define service levels, pricing, confidentiality, liability, termination rights, and other key terms.
Service levels should specify quantitative metrics like system uptime percentages, maximum response times for incidents, and timeframes for completing projects. Having measurable service levels allows the client to hold the provider accountable for meeting expectations. The contract can specify financial penalties if service levels are not achieved. Pricing terms will establish the fees to be paid, any upfront costs, and provisions for price increases over the term of the agreement. Outsourcing contracts usually last 1-3 years.
Confidentiality is crucial when outsourcing security functions. The contract must prohibit the provider from disclosing or using the client’s proprietary information except as necessary to deliver services. Information security providers should agree to handle sensitive data properly and prevent unauthorized access. The contract can specify monetary damages for confidentiality breaches.
The outsourcing provider’s liability for security incidents, data breaches, and other failures should be clearly addressed. Maximum liability caps are common, but the client will want recourse if negligence occurs. Intellectual property ownership is another key issue – the client will usually want to retain IP rights over any solutions developed by the provider.
Finally, the contract should allow either party to terminate early with notice, like 30-90 days. This provides an exit if the relationship is unsatisfactory. The provider must agree to return data and transition work smoothly upon termination. According to sources, comprehensive contracts are essential for successful security outsourcing.
Managing the Outsourced Infosec Relationship
When outsourcing information security functions, it’s important for the client organization to actively manage the relationship. This includes ongoing communication, monitoring performance, conducting periodic reviews, and adequately protecting sensitive data.
The client and vendor should establish clear channels for regular communication. Appointing relationship managers on both sides can help facilitate discussions of priorities, performance metrics, and any issues that arise. It’s key that the client provides prompt feedback to the vendor on their work.
Monitoring and measuring performance is essential. The client should regularly review reports and metrics based on the key performance indicators established in the contract. This allows the client to identify any deficiencies and work with the vendor to quickly resolve them.
Conducting periodic reviews of the relationship is recommended, such as quarterly or biannual assessments. These reviews examine the service levels achieved, objectives met, customer satisfaction, and opportunities for improvement. They provide a formal mechanism for both sides to discuss the relationship status.
Lastly, the client must verify that the vendor implements strong data security protections per the contract terms. The vendor should provide evidence of controls like encryption, access restrictions, breach detection, and secure data transmission. Audits may validate that client data is properly safeguarded. As Kasema and Mungai note, data privacy and confidentiality are paramount when outsourcing IT services.
Bringing Outsourced Infosec Back In-House
Many organizations choose to bring previously outsourced infosec functions back in-house for various reasons. Some of the top reasons for insourcing infosec include:
Greater control and visibility – With outsourcing, companies cede some control over processes and operations. Insourcing gives them full oversight and ability to align infosec tightly with business goals.
Improved security – Keeping sensitive data and operations in-house reduces risks associated with third-party vendors. Companies may worry about data breaches or loss of intellectual property when outsourcing.
Cost savings – While transition costs are high initially, insourcing can reduce long-term infosec costs by eliminating vendor margins and overhead.
However, bringing outsourced infosec back in-house also poses some key challenges during the transition:
Building in-house capabilities – Companies must recruit, hire, train and manage their own infosec team with relevant skills and expertise, which takes time and investment.
Disruptions during transition – Insourcing can disrupt continuity of operations and service levels as existing vendor relationships are severed and new teams are onboarded.
High upfront costs – Transitioning from outsourcing requires large upfront investments in personnel, tools, infrastructure, and processes before long-term savings can be realized.
Cultural challenges – Integrating insourced staff and teams can involve complex organizational and cultural changes for both employees and management.
By carefully planning the transition, providing adequate resources, and managing changes, organizations can successfully bring outsourced infosec functions back in-house and reap the long-term benefits.
Outsourcing Infosec Offshore
Many companies choose to outsource their information security functions to providers located offshore. This allows them to take advantage of lower labor costs in countries like India, China, and the Philippines. However, offshore outsourcing does come with some unique benefits and risks.
The main benefits of offshore outsourcing for infosec include significant cost savings, around 40-50% typically, and access to a large talent pool. Time zone differences can also allow for 24/7 coverage. However, there are also risks related to data privacy regulations, intellectual property protection, and cultural differences.
Countries like India, China, and the Philippines are common destinations for offshore infosec outsourcing. But communication and coordination can be challenging due to language barriers, geographic distance, and cultural differences. There may be differences in work styles and business etiquette as well.
Companies need to carefully evaluate providers and locations when considering offshore infosec outsourcing. Clear communication, well-defined requirements, and close management of the relationship are key to making it successful. But the cost savings may outweigh the extra effort required.
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The Future of Outsourced Infosec
The future of outsourced information security looks bright as new technologies emerge that can augment and enhance infosec capabilities. Some key trends that will shape the future of outsourced infosec include:
Artificial intelligence and machine learning will become more prevalent in outsourced infosec services. AI can analyze massive amounts of data to detect threats and suspicious activity at a scale and speed difficult for humans to match. Outsourcing providers are investing heavily in AI to reduce costs and improve services (1).
Automation will handle many basic infosec tasks, enabling outsourcing providers to focus their human talent on higher-level strategic initiatives. Software robots can automate repetitive processes across IT and security operations (2).
Cloud computing grants outsourcing providers scalable infrastructure to keep pace with client growth and changing needs. The cloud’s flexibility and global availability underpins many outsourcing services.
As outsourcing providers leverage these emerging technologies, they can deliver improved threat detection, faster response times, greater cost efficiency and enhanced expertise to clients. With innovations in AI, automation and the cloud transforming the infosec landscape, the future of outsourced security looks increasingly compelling for organizations seeking world-class capabilities.