GDPR software can be a great tool that can cut much of your routine, manual compliance work down. But what is it for and do you even need it?
The General Data Protection Regulation (GDPR) requires you to incorporate data security and privacy in the data management strategy of your business. This can be done by implementing the appropriate technical and organisational measures like secure storage, maintenance, transfer, and use of any data held by your business. The implementation of these measures can be a daunting task involving huge resources. Therefore, the most cost-effective and convenient way to meet these requirements is with the help of GDPR management software.
Before emphasising the need of a management software, it is essential to understand the costs involved in the management and GDPR compliance.
There are two types of costs involved while managing the components of GDPR: compliance costs and market inefficiencies. Compliance costs include the capital costs the companies incur for ensuring management and compliance with GDPR like the costs associated with oversight mandates, such as consumer requests (DSARs); data protection impact assessment (DPIA), data mapping.
Any breach of the GDPR attracts a fine of up to €20 million or 4% of the global annual turnover of the organisation. In any case, the cost of non-compliance is 2.71 times the cost of compliance. Therefore, organisations must invest appropriately to ensure maximum compliance. For instance in 2019, the ICO issued penalties worth £183 million ($222 million) on an airline company, and £99 million ($120 million) on an international hotel chain. However, penalties and other regulatory actions are not limited to only instances of data breaches, but also for providing improper privacy notices or for deficiencies in obtaining consent.
However, the cost of GDPR compliance is usually higher than what was initially expected. While calculating GDPR cost, it is important to take into consideration the opportunity cost of having the employees occupied with the GDPR management process rather than focussing on the operations of the business. According to a survey, around 67% of the organisations involve at least 25 employees for fulfilling GDPR requirements.
The second cost associated with the management of GDPR is the indirect costs in the form of market inefficiencies. Compliance with GDPR has a positive impact on consumer opinion in relation to personal data stored with organisations. Market inefficiencies can be generated in various ways, including increased market uncertainty, productivity losses, reduced ability to innovate, and more. For example, it is estimated that if the United States were to enact overly restrictive privacy legislation, it could generate roughly $104 billion in market inefficiencies, which would be borne out in increased costs, decreased productivity (for both organisations and consumers), and decreased innovation.
Most of the costs associated with the management process of GDPR arises from oversight mandates, such as handling DSARs, consent management, DPIA, data mapping etc. Therefore, it is important to look into the costs involved and the need for utilizing GDPR management software for complying with these obligations.
DSARs are a crucial component of the GDPR. With the increase in consumer awareness, 48% of organisations have invested to improve their compliance. However, despite this 75% of Britain’s DPOs are facing difficulty meeting data compliance obligations and nearly 30% of DPOs are expecting a massive increase in DSARs in the months following the post-lockdown return to work.
With the increase in the volume of DSARs, the business will struggle to meet their 30-day turn-around obligations using conventional manual processes. Many organisations receive 28 DSARs a month on average, yet just 52% are completed within 30 days at an average cost of £4884.53 for a single request.
DSAR requests can be time consuming and costly. In such a scenario, you can resort to an automated process to reduce time and effort. Investing in an appropriate software that smoothens the process quickly and completes the process of dealing with a DSAR with automated workflows can be an effective solution to problems posed by DSARs.
Article 30 of the GDPR requires you to maintain records of their processing activities to be made available to the ICO in order to ensure that you are GDPR compliant. However, maintaining huge records manually requires time and resources. Organisations spent about €3.2 million in order to respond to data breach. This cost includes all data breach related expenses along with the lost productivity and lost time and human resources.
In this scenario, the easiest way to ensure smooth management is to map your data flows and create a personal data inventory. Reliance on GDPR management software to create such inventory saves your valuable time. The personal data inventory can be used to log details of the data subjects involved in each process and produce an account of personal data. Using GDPR management software enables you to specify the other mandatory requirements like the purposes for which the data is processed, the types of personal data being processed and the various categories of data subjects. This can help you generate a report that compiles information to share with the customers or other stakeholders. GDPR management software also smoothens the process by allowing you to update the details whenever changes are made to the process, thereby reducing the hassles of management and ensuring maximum compliance.
A DPIA is an assessment to identify the potential risks in the business that has the potential to affect the security of personal data held by the organisation. Article 35 mandates that a DPIA must include the description of the processing operations, the objectives of such processing and an assessment of the risks emanating from such processing to data subjects and the measures to address those risks.
Employing GDPR management software streamlines the whole DPIA process. GDPR management software enables you to determine whether you need to conduct a DPIA. If there is a need, such software can help you to conduct consistent and comprehensive assessment by helping you identify the risks in processing any data, the likelihood of its occurrence along with its potential impact. You can also use GDPR management software to review and update DPIAs as and when there is a change in processing activities.
One key part of GDPR compliance is documenting each customer’s consent to store their data and communicating this information with them. Therefore, it is essential that you offer your customers an easy way for their personal data to be edited or removed.
Making use of software or a dedicated consent management platform can work wonders for your business. Such platforms allow comprehensive solutions to collect, store, and leverage user consents and preferences. With the right GDPR management software, you can even offer customers a dedicated space to easily access and manage their consent and preferences.
An appropriate GDPR management software not only integrates, unifies, and protects the data you store within a centralised and secure place, but can also provide an agile solution to the issue of GDPR governance, risk, and compliance. These technologies can provide customised enterprise-level solutions for risk management, compliance management, and data privacy. GDPR management software is extremely beneficial for small businesses as they allow smooth management of the customer’s data and comply with legal requirements effectively.
The GDPR has triggered a drastic change in the manner businesses handle customer data. With GDPR management software you can make it easy for your business to meet the important requirements. It can also act like a bonus point and serve as a point of differentiation. The sooner the business is compliant, the sooner you will have the benefit of standing out from the competition. The customer loyalty and confidence that their personal information is in good hands maximises the selling opportunities of your business.
So if you have access to a decent size budget for your compliance, you may be able to splash out on software, but what if you are one of the 95%: SMEs?
Small and medium enterprises (SMEs) fall under the scope of the General Data Protection Regulation (GDPR) and must therefore comply with GDPR requirements whenever dealing with personal data. Compliance requirements include consumer requests, data protection impact assessments (DPIA), and data mapping. Regardless of size, SMEs face a significant burden on data privacy compliance as they must often grapple with their obligations while armed with limited resources and expertise.
GDPR compliance poses several challenges to SMEs relating to proper interpretation of the requirements, as well as correctly understanding their obligations, and what are the appropriate responses.
There are a few exemptions for SMEs with fewer than 250 employees. For example, they are not required to maintain a record of data processing unless it is a regular activity. Nevertheless, for large and small enterprises alike, non-compliance with the GDPR may result in harsh penalties of up to €20 million, or 4% of the firm’s global annual revenues from the preceding financial year, whichever amount is higher. It is therefore essential to ensure compliance with the GDPR, regardless of the size of your business.
While laws such as the California Consumer Privacy Act (CCPA) have made exemptions from compliance with data protection obligations for smaller businesses, the GDPR is almost equal in its treatment of both large businesses and SMEs. Complying with data privacy laws such as the GDPR often creates significant hurdles for SMEs to jump, and the situation has only become more challenging as a result of the Covid-19 pandemic. Pending GDPR obligations, including DSARs, often cause a backlog for SMEs and result in huge compliance costs of up to 50,000 EUR.
In today’s business environment, it is essential for SMEs to be compliant with data privacy laws to maintain a culture of accountability, transparency, and trust with customers. A 2019 survey found that millions of small businesses are non-compliant with the GDPR. Over time, many SMEs across the world have invested heavily in ensuring compliance with data privacy laws.
Automation of GDPR compliance through GDPR management software can significantly reduce your compliance burden. This is especially true for SMEs, since:
Given a rapidly-evolving business environment in which SMEs are forced to deal with a vast amount of personal data, complying with data protection requirements manually is ineffective. Technology and software solutions to automate these processes can significantly assist in reducing your compliance burden, and ensure sustainable and proactive compliance in data privacy which goes further than merely avoiding penalties.
To manage your compliance issues as an SME, an automated management software solutions help to:
Overall, GDPR management software can deliver a number of data privacy compliance outcomes for your SME, however each enterprise has its own individual needs. If an SME is operating on a tight budget, it is important to thoroughly explore whether or not your organization requires GDPR management software.
Each organization has its own unique needs and level of compliance requirements. For some SMEs that perform limited data collection and processing, manual management of GDPR obligations may be the right approach. The need for GDPR management software depends on several factors. To understand the needs of your SME you should consider the following:
Your day-to-day business operations may involve collecting, storing, and processing personal data on your customers and employees. As a first step, you should understand the nature and volume of the data you deal with on a regular basis. Aside from collection and storage of personal data, the retention and deletion of this data is also a pain point from a compliance perspective.
As mentioned above, small businesses are also required to comply with the GDPR, albeit with a few exceptions for SMEs employing less than 250 employees. As a second step, try to understand what your obligations are, and whether they will place a significant burden on your existing staff or IT team. The key aspect here is to make an assessment of the DSAR requests you receive, and perform a data impact assessment on meeting your data mapping obligations.
Depending on the nature of your GDPR compliance burden, conducting legal compliance tasks manually may not be the most cost effective approach. Since non-compliance with the GDPR can result in hefty fines, it is important you optimize the use of your available resources. If your SME is heavily burdened by data privacy compliance requirements, a GDPR management software solution can assist you in automating your compliance activities. However, if your GDPR compliance burden is less significant, then it may be better not to invest in costly data management software.
Understand the various software solutions available and choose the one most suitable to your needs
With privacy tech on the rise, there are several options available to you when selecting a GDPR management software solution. Understanding the unique needs of your business will mean you are better placed to understand which software solution would be the most suitable for your SME.
In these privacy-centric times, customers are increasingly conscious about their personal data, as well as how it is stored and processed by an organization. A Deloitte survey found that more than 58% of consumers are more cautious about sharing their personal data following the enforcement of the GDPR.
Creating a relationship of trust with your customers will allow your SME to use and process data more efficiently and transparently. Ensuring proper compliance with the GDPR helps to build trust with your customers over data privacy. However, a recent study uncovered that only 10% of SMEs are compliant with the GDPR.
For technology-first SMEs that greatly value the privacy of their customers’ personal data, a GDPR management software solution is a powerful tool to ensure your compliance needs are met in a cost-effective and thorough manner. It is also likely that your digitally focused SME may be collecting, storing and processing a significant volume of personal data, which inevitably raises several compliance challenges on a day-to-day basis.
Not only does a GDPR management software solution help to keep the privacy of your customers’ data a top priority, it also significantly reduces the compliance burden that your organization must continuously devote both its time and scarce resources to.
So now we’ve gone through the basics of what you need to cover, whether you are a bigger or smaller business, let’s take a look at what the ideal software kit would look like.
The most effective way your business can comply with the GDPR efficiently and effectively is by equipping your organization with software. By doing so, you can protect your organization against legal issues, as well as save time and money – something essential for any business.
GDPR compliance software tools vary, but a full feature set will help your organization with the following tasks:
Automating compliance with DSAR software not only protects your business from the risk of fines, but also helps increase the efficiency of handling DSARs. Incorporating compliance software also guides employees by giving them a one-stop facility for consumer privacy requests. Using compliance software tools demonstrates to your customers that you take their privacy seriously.
So with all that being said, why can’t you do all the basics manually and, really, do you actually need software?
There has been much talk about how the GDPR has overhauled data practices for digital companies, and that the legislation and similar privacy laws in other jurisdictions have come at a great cost to organizations. Since much of data protection compliance is currently handled manually, it begs the question: what software is out there and do you need it?
The General Data Protection Regulation (GDPR) requires businesses to develop data protection by design and by default. This means that your business must build data security and privacy into every aspect of its data management strategy. This includes compliance with various data mapping requirements, individual rights management or data subject access requests (DSARs), privacy legal updates and information management, etc.
One of the most simple and straightforward ways you can comply with the requirements of data management under GDPR is to employ compliance software. Software can help you to manage the customer data, consent requirement, and other data security issues. In addition to that, software also provides customers with the option to edit the personal data stored with the business.
Let us first look at the rising number of DSAR complaints and data mapping issues that pose a problem in ensuring effective compliance with privacy legislation, such as the GDPR.
A report by Deloitte indicated that 58% of customers are more cautious about sharing their personal information than in the pre-GDPR era. This has enabled companies to not only take positive steps to ensure compliance with the regulations, but also boost their brand image. It is estimated that 48% of the businesses have invested in order to match their data handling practices to the regulations.
This investment has mainly been in the form of adoption of guidelines, and few organizations have opted to use new technology and software to boost their compliance efficiency. However, the rising number of DSAR complaints and the high cost involved in processing them warrants the need for a GDPR software compliance for various businesses.
There has been a stark rise in the number of complaints regarding DSARs. Statistics indicate that the complaints have doubled in the past few years. This fact is highlighted by a survey on the rise and challenges of DSARs, which observed that 9,090 complaints were recorded with the ICO in six months in 2018 as compared to 4,600 complaints in the same time period in 2017 and 4,000 in 2016. This number has continued to rise.
Around 71% of organizations surveyed in 2018 saw an increase in the number of DSARs submitted by employees. This increase in complaints inevitably brings about an increase in the cost associated with responding to them. Around two thirds of the organizations which encountered the increase in the number of DSARs saw their costs rise. In order to deal with the issue, 83% of these organizations have adopted new guidelines and procedures and 27% have acquired new personnel to manage the rising complaints. However, only 20% of these organizations have adopted new technologies or software to deal with the problem.
Under the GDPR, organizations are mandated by law to provide data subjects with a copy of their personal data within one calendar month or face the risk of a 20 million EUR fine or 4% of their turnover, whichever is highest. It is worth mentioning processing of a DSAR in itself can involve huge costs.
According to a recent study, businesses in the United Kingdom with a headcount of over 5,000 are spending around 1.59 million GBP and around 24 full time employees annually in order to process DSAR complaints and ensure GDPR compliance. It is also estimated that, on average, Data Protection Officers (DPOs) receive around 27 requests per month and the cost to process each request could be up to 5,000 GBP. Furthermore, it takes 66 working hours to process and complete one request. This means approximately 30% of the working day is spent processing DSARs.
The repercussions of this time-consuming process are also evident from the cases where the costs of processing DSARs has been very high for several organizations or businesses. For instance, in one case where James Titcombe sought a Freedom of Information request from the Nursing and Midwifery Council, the cost of processing the request was estimated to be almost 240,000 GBP.
In another instance of a troublesome DSAR, one organization had to go through over half a million emails in order to process the request and respond. The cost for processing this one single access request was estimated to be 116,000 GBP.
Having considered the rising number of DSARs and the associated costs involved with them, it is now important to consider the question as to how a GDPR compliance software can be useful for you in dealing with the issues.
Many organizations have noted that a lot of DSARs are without merit, but they have to spend a lot of time separating the valid and from the non-valid requests. This requires managing and reviewing huge volumes of personal data. It is often the case that a single request from an individual produces different responses from different departments. This mix up needs to be resolved before the consumer is answered and this creates additional work and takes up a lot of time.
One of the biggest challenges for DPOs in global organizations is to manage the volume of personal data that needs to be reviewed before a response can go out. Sending out another client’s or employee data by mistake can get the companies in trouble as it is considered a data breach. Moreover, companies have to be careful not to share sensitive business information by mistake.
The mounting costs and the time associated with the processing of DSARs require an effective solution in the form of an efficient GDPR compliance software.
It is impractical and inconvenient for businesses to invest hours to process a single request. This has led to increases in data management costs because each request requires:
Under the GDPR, businesses have only one month to complete the entire procedure. The process, if done manually, requires many hours to process a single request.
Many organizations have new guidelines and procedures about how to comply with the GDPR. However, not so many have hired dedicated, full-time personnel or purchased special technology or software to deal with the issue. Investment in software can help the businesses cut costs, while streamlining compliance workflows and drastically reducing the human factor.
These advantages are the reason why IAPP reports around 28% of the organizations they surveyed in 2019 had already purchased software and 18% were planning to invest in DSAR software. Moreover, the study also showed that 37% of businesses have already integrated data mapping and flow technology, while 24% plan to purchase software to make the businesses comply with the regulations.
The architecture of GDPR compliance software programs aims to increase security management, facilitate communication with the customers, monitor the status of the complaints, and map data to save costs, time, and the resources of the organizations.
In general GDPR compliance software enables organizations to maximise their GDPR compliance. The main thing when assessing whether your business would be better off with using software is to look at how many requests and how much your current privacy operations cost without GDPR compliance software. If your organization receives many requests from consumers and privacy compliance is becoming costly for you, consider trying GDPR compliance software. Automation could well make it easier to meet the requirements of the regulations, while enabling you to invest your time and energy into your key business goals.