Cost benefit analysis vs

confidentiality

Cost benefit analysisOverviewCost-benefit analysis provides an

organizational framework for identifying, quantifying, and comparing the costs and benefits (measured in dollars) of a proposed policy action. The final decision is informed (though not necessarily determined) by a comparison of the total costs and benefits.

General Information tool for comparing the benefits of proposed

projects with the costs. help users identify the alternative with the

maximum net benefit (benefits minus costs). There are four basic steps to performing a cost-

benefit analysis:Identify the project or program and

alternativesDescribe quantitatively the inputs and

outputs of each alternativeEstimate the value of the costs and benefitsCompare benefits and costs

Application Gives manager a better understanding of the

impact of alternative courses of action in terms of costs and benefits.

Identify alternatives that are the most beneficial, comparing projects that differ in magnitude and duration.

Cost-benefit analysis requires the conversion of all benefits and costs into common units.

cost-benefit analysis is an important tool for helping managers do the most environmental good with limited time, funding, and other resources at their disposal.

Strengths Compares costs and benefits using equal terms

Provides a clear indication of net cost or benefit helping justify decisions at various levels

Simplifies complex concepts and processes

Accepted more readily than other economic methods

Is all pervasive.

Limitations

Difficult to determine accurately the discount rate of future costs and benefits, as well as indirect impacts

Often requires non market valuation methods with varying degrees of complexity and accuracy

Costs are easier to estimate than benefits

Can be a time-consuming and expensive process

Does not usually consider questions of environmental justice and how costs and benefits are distributed across different groups

Confidentiality Information having value and is worthy of

protection.  Information relating to new products,

trade secrets, financial performance ,customers valuable asset , gives it an advantage over its competitors. Businesses guard this information closely. It is vital that this information is properly

protected from unauthorised use and disclosure. 

Benefits of confidentialityProtecting Sensitive InformationKeep sensitive business information secret

from the public and competitors.special formulas, plans, processes or

devices that they use to gain an advantage over competitors.

confidentiality of such trade secrets can allow a company to maintain its competitive advantage.

For example, a soft drink company might keep its recipe confidential so that no one can copy it or use it to form new ideas.

Marketing AdvantagesAllows companies to pick and choose the

information actually released to the public.

Sometimes, businesses do not want consumers to know everything about the development of their products.

For instance, a software company might not want to release information about software that is under development because early versions of software are often replete with problems that need to be fixed before release.

Drawbacks Marketing DrawbacksDecrease awareness of products and services.

If a company updates consumers with news about upcoming products and services, it can help create demand for those products and services before they become available.

Transparency of business practices, such as releasing information about how products are produced, can also build consumer trust.

Information Leaks

A major drawback of confidentiality is the possibility of information leaks.

Many companies choose to patent inventions, which serves as legal protection against anyone trying to copy the invention.

If confidential information is leaked, a company might not be able to defend its intellectual property as effectively is it could otherwise.

Security and confidentiality in outsourcingAny organization that decides to

outsource part of its operations puts its reputation, along with any data processed or customer interactions performed on its behalf, in the hands of a third party.

Organizations need to consider who has access to sensitive or confidential information and how that access affects compliance with regulations and policies.

Those responsible for the outsourcing process should consider several issues, including:

Will the vendor limit its employees’ access to sensitive information?

Is information stored at a vendor site? If so, is every storage location known to the outsourcing organization?

What controls and security practices does the vendor enforce to provide assurances that critical information is handled appropriately?

BanksWhy Do Banks Outsource Activities?By outsourcing through experienced service providers, a bank can quickly improve the quality of its services, increase its operational or financial efficiencies, and, in many cases, reduce costs. increase its focus on the core business functions, high capital investment and technology requirement

ACTIVITIES THAT ARE CURRNTLY OUTSOURCEDProcessing of applications collected which includes data

capturing, preparation of bank schedules, etc. Clearing of instruments Tallying of Instruments and Reconciliation 

CRM and KYC softwareSetting up of ATMsClearing of instruments Tallying of Instruments and ReconciliationAnalysis:Outsourcing neededBut keep a close watch on how the disclosed

information is being handled.No compromise with confidentiality.

Case studiescase 1October 2003 - Lubna Baloch and University of

California San Francisco Medical Center(UCSF)

Facts: - Compensation for work not paid - Threatened to post medical records on the Internet

Result: - Patients aggrieved - No further work to Baloch from America - Legal Action taken

Case 2Several offshore workers, based in Bangalore,

India, employed by Heartland Information Services of Toledo, Ohio.

Facts:- Threatened to expose confidential

information unless they received payment. - The officers of HIS failed to notify clients and shareholders- Something unexpected: One of their

clients filed a case against HIS for failing to disclose the incident.- Image damaged

How is India dealing with data privacy and security issues? Most of the security fears unfounded.

-Strong legislation-Clear agreements and measures set up between

companies. -Confidential data stored on servers of the companies that are outsourcing and their Indian vendors have tightly

controlled access. 

No reason to panic - One has to understand that Indian companies have as much to lose as their clients if an incident were to occur. This is why efforts to counter any mishaps are being taken.

The country is not only moving up the value chain by offering more complex services, but is determined to establish its trustworthiness. 

PrecautionsEnsure that you have an exit planOnly disclose information to people who need to

know that information Ensure each recipient is under an obligation of

confidence owed directly to your business.Impose a requirement that all confidential

information must be destroyed or returned to your business when no longer required.

Keep accurate and up to date records of exactly what information has been disclosed and to whom.

Mark all sensitive and commercial information as “confidential” prior to release.

ConclusionEvery piece of information when disclosed

becomes redundant”Cost benefit remains a part of vital

information for the organisation, if disclosed may lead to opportunities lost and other forms of damage.