These days, every vendor is trying hard to sell you the idea that they have everything you'll need when using their services. In many ways, they could be right. There are several advantages that come with having a single service provider with visibility on multiple business units. However, there are also several disadvantages that you should consider as well.
So what are the downsides of centralized data? Why do you need to look at other solutions? And what even are those solutions?
The Rise of One-Stop Shop Business Solutions
Tech giants like Microsoft, Google, and Amazon, are continuously working to build ecosystems of products that serve various complementing business needs. Whether it is managing corporate emails, knowledge management systems, or customer data storage, it’s a never-ending race to offer efficiency and convenience.
For this reason, having a single company manage the bulk of your business needs can be tempting. With a single relationship, it is easy to set targets, manage payments, and mitigate information gaps between the various involved departments. It’s the path of least resistance and a convenient way to consolidate knowledge, processes, and other needs.
So what’s the problem?
Why You Need to Decentralize Your Business Data
When it comes to data, its value becomes greater in context. For example, while one person’s data can reveal things about them as individuals, millions of similar data points can infer or predict trends that will affect entire organizations, or even populations.
With this in mind, external companies that hold too many critical data points across departments have intimate knowledge about your business. If not managed properly, this opens your company to several risks.
First, companies spend a lot of money to develop products, processes, or customer profiles. When left unprotected, third-party service providers may be able to not only access this information, but also use it to help aid competing businesses.
And even if the vendor does not have any malicious intent, centralized information makes it easier for your data to be stolen or held to ransom. When a single provider has access to your critical business data, they become the primary target for hackers, shady competitors, and so on. Not all vendors can adequately protect your data against targeted attacks such as ransomware.
Lastly, if all your critical business processes are dependent on a single service provider, you may encounter difficulty should they have server disruptions, be located in a country that is enacting new data privacy policies, or simply go bankrupt.
How to Decentralize Your Corporate Data
For these reasons, it’s important to think about ways to mitigate dependence on a single vendor, especially for processes that can make or break your business.
1. Segment Access to Critical Data
Having multiple providers will also include that increased difficulty tracing the origins of a possible threat or leak. However, the threat can be significantly reduced with less granular data. For this reason, you have to balance which threat you are more likely to experience and how to properly segment your access points.
Across several business units, it's better to have separate service providers and keep the alignment between internal stakeholders instead. While it may add some extra steps, it helps reduce the amount of access vendors have to company data that's critical to the business.
2. Utilize Offline and Online Data Management
One way to not be dependent on the internet for access to your data is to make sure you save critical data in local storage. These sorts of storage solutions must similarly be frequently updated and kept separate from servers that are regularly accessed by guests and employees with unrelated roles.
While the cloud has definitely made things a lot more convenient for companies, it does create potential vulnerabilities. Cloud storage is not infallible as these services are vulnerable to not just external attacks, but also to badly managed administrative access by your employees.
3. Monitor and Restrict Data Access
Aside from this, it’s also necessary to make critical data accessible to as few people as possible, especially outsiders. For example, make sure you revoke access as soon as individuals leave the company or the moment that an individual or vendor is under investigation.
When it comes to data security, you are only as safe as your weakest link. While no one wants to suspect that partners are stealing data, the reality is that data theft is a common occurrence. In fact, data theft can cost your company millions if left unchecked.
4. Craft an Internal Response Procedure
Regardless of service provider, there’s always a risk that they’re unable to perform up to standard every single time. If no protocols are in place, service disruptions leave your company open to various threats internally as well as externally.
Whether it is due to a natural calamity, active threats by hackers, or a routine service upgrade, it’s best to have procedures in place to make sure your businesses don’t have to stop when your vendors do.
Keep Your Business Running
While it can be tempting to have a single company handle so much of your business needs, the reality is that it is always better to prepare for the worst. Data theft is a very real, active threat that happens across industries worldwide.
For many companies, the cost of protecting data is miniscule compared to the cost of having it stolen and used against them in the form of digital espionage, ransomware, and theft. In general, companies that have several years’ worth of information on millions of individuals are usual targets of cybersecurity attacks. However, even small companies should take security seriously.
Creating a foundation of good security practices will help aid in the eventual scaling of any business, especially those posed for high-growth and international expansion. It’s best not to put all your eggs in one basket and build healthy threat detection systems and response procedures to protect your business on all fronts.