What is data security management and what are the challenges for your procurement function?

February 15th, 2024
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As the volume of data created, stored and used by organisations continues to grow, protecting data security has also become a priority. This is especially true for departments that handle sensitive and/or confidential information, such as the procurement function. For companies, it is crucial to have a comprehensive understanding of the ins and outs of data security and its challenges in order to ensure effective and secure management of their operations.

What is data security management?

Big Data has become the cornerstone of any company’s overall strategy. If properly leveraged, this vast data set is an extremely valuable resource, synonymous with strategic advantage. In return, making sure to implement data security policies has become just as essential. It is even a major issue of competitiveness, differentiation and data compliance (notably with the General Data Protection Regulation, known by its acronym GDPR). According to a recent study on cyber risk management conducted by insurance agency Hiscox, 72% of companies recognise that they will damage their brand image if they do not offer a high level of security and privacy when processing customer and partner data.

Data security management refers to security best practices, policies and technologies implemented to protect an organisation’s critical and sensitive information. It helps to:

· Safeguard against unauthorised access to data;

· Prevent data loss;

· Protect against data breaches;

· Avoid data leakage;

· Control data corruption;

· Prevent data theft…

This high level of protection must be maintained throughout the data lifecycle.

It covers multiple aspects: From physical hardware security to access controls, including application software security. Companies must protect their information assets against external data security threats, namely cybercriminals, as well as insider threats including potential human error.

Corporate data security management is based on three main pillars:

· Confidentiality means ensuring that only authorised people can access sensitive and critical data.

· Integrity means ensuring the accuracy and authenticity of data by preventing any unauthorised alteration.

· Availability means ensuring that authorised users can access data when needed.

The challenges of data security management for the procurement function

Procurement functions manage a multitude of data within their company, most of which is sensitive and/or confidential. This includes identifiable information about suppliers (contact details, financial information, products and services…), orders (prices, terms of purchase…) and contracts (general terms and conditions, confidentiality clauses…). This is why there are major issues in the procurement world around protecting sensitive data against malicious attacks.

According to the latest survey conducted by consultancy firm PwC, 90% of procurement departments are concerned about cyber threats. In addition, 27% of them claim to have already been the victim of an intrusion.

The breach or leakage of information can have a severe impact on company finances and reputation. Compromising the confidentiality, availability or integrity of data inevitably leads to consequences. The procurement function is also involved in product development, requiring the protection of intellectual property. Theft of this information would have a direct impact on the company’s competitiveness.

Data security management is not limited solely to internal practices. It also extends to how suppliers manage and protect sensitive information shared. Still according to the Hiscox study, the number of companies that have caused a security breach for business partners has doubled in one year, reaching 24%. Procurement departments must therefore ensure that their own teams, internal customers and suppliers comply with the necessary data security measures and standards, while becoming compliant with regulations.

Strategies for securing procurement data

To ensure data security, the procurement function has several options. Here are some of them.

Raising team awareness

First and foremost, it is essential to raise employee awareness of best information security practices. The procurement team, as well as internal customers, must be aware of the risks and know how to protect sensitive information.

To make sure everyone is on the same page, companies can set up mandatory training, quizzes or even simulation exercises. Because the human factor is the cause of most IT security flaws, establishing a strong cybersecurity culture is essential in any company. For instance, employees must know they should avoid using their personal devices for work.

Controlling data access

To guarantee data security, it is vital to control access to databases, corporate networks and administrator accounts. This involves determining who can access what, when and where. It also entails regularly assessing access rights to reflect staff departures, arrivals and mobility within the company. This approach can also be strengthened through data security technologies such as multi-factor authentication (MFA).

As a reminder, multi-factor authentication combines multiple authentication methods. In addition to the traditional username/password, this can take the form of sending a code via SMS or push notification to a dedicated application.

Implementing the right security tools

Investing in advanced data security solutions is essential. Firewalls help monitoring network traffic and prevent unauthorised access. As such, they serve as the first line of defence.

As part of their security processes, companies can also rely on intrusion detection systems to identify and counter potential attacks in real time. Data encryption software makes data unreadable to any unauthorised person. Without a decryption key, the files remain inaccessible even if compromised.

IT security and cybersecurity rely on robust measures to ensure data protection. This has also become imperative for the procurement function, given the critical nature of the information it handles. The procurement team must commit to a strong data security strategy to preserve the confidentiality, integrity and availability of information that is essential to its daily operations.

Effective data security management relies on a proactive and continuous approach involving all the company’s stakeholders. This is how companies improve risk management and ensure business continuity.

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