Things You Should Know About Data Processing Agreement (DPA) In Software Development Outsourcing

Right from our sleeping patterns to food habits, we have it all listed out on various applications on our mobile phones. No denial about the fact that it has made our lives a million times easier, but at the same time we just have all our personal details out there. 

With data being at the center of everything, since May 2018, the General Data Protection Regulation of the European Union has been active. The core agenda of introducing these practices was to predefine standards regarding the usage, access, and how data is shared by the web users. This GDPR compiled a major segment for the outsourcing industry regarding the Data Processing Agreement between the data controllers and data processors. 

So what exactly is the Data Processing Agreement and what is its role in Software Development Outsourcing? Here are a few important terms for starters.

  • Data Processing Agreement
    A Data Processing Agreement is a legal document signed by both the parties, i. e., the data controllers and data processors. This document is to be signed either in a written form or an electronic form and regulates the terms and conditions of the personal data processing of the European citizens. The personal data includes first name and last name, date of birth, place of residence, or basically anything through which it’s possible to identify a person. 
  • Data Controllers and Data Processors
    Let’s say a UK-based healthcare service provider is developing an application for an anonymous mental healthcare service, where the users can consult doctors without revealing their identity. This application is to be developed by another IT firm based in India. Here, the UK-based firm will be the data controller and India based firm will be the data processor. 
  • The data controller is basically the one who defines the rules of how and to what extent the data will be shared. On the other hand, the data processor has to abide by the rules stated by the data controllers and limit the usage of the data. 
  • Regardless of whether you are a data processor or a data collector, it is mutually the responsibility of both parties to protect the end user’s personal data. The essence of the GDPR is that all the involved parties own the responsibility of the data by signing a legal document.
  • Sub ProcessorThere are certain instances where there will be vendors or organizations that might be indirectly processing the user’s data. They would have not directly signed the DPA with the controller and are commonly known as sub-processors. In such circumstances, it will be the data processor’s responsibility to ensure that the sub-processor abides by the clauses and terms of the DPA.

The Next Steps

Once the DPA is signed by all the involved parties, the data processors have to abide by the GDPR rules and regulations. The data controllers inform the data processors of how and what is to be done. In case the data processor outsources some of the project modules to sub-processors, they have to ensure they are well aware of the data access and usage terms.

The Importance of Data Processing Agreement 

With digitalization in almost every sector, there has been a drastic increase in the usage of data. Hence, it has become more than important to protect the personal and sensitized information of the users. With this ever-increasing internet usage, there has been a humongous increase in data breaches too. It gets extremely tricky when the data transfer occurs via various mediums in outsourcing, especially when a cloud-based data transfer is used. 

Therefore, there was a dire need to streamline the usage, storage, and access of data. With remote working being the new normal, it has become extremely important to protect the entire organizational databases, sensitive client information as well as user data. Developers are hired barring the geographical boundaries and hence having a streamlined approach is the smartest thing out there.

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