Bob had a good feeling as he drove to work that day. He was looking forward to reporting how far ahead of schedule the project was. Little did he know that it would be the most regrettable day of his career.
Bob was the project manager of a consulting project for a major retail chain. The team had been preparing for their testing phase which would be performed by their offshore staff in India.
The breach in client confidentiality
They had run some database queries to pull production data to use for test data and sent it to the offshore team for testing.
As he reported the project’s status to client management, including their accomplishment of sending test data to the offshore location, the client questioned him on what data had been sent. He described the querying process and was surprised to see the shock on their faces.
They told him that transferring that information – data that had not been cleansed of confidential customer information – outside the company’s servers violated customer confidentiality laws regulated by HIPAA (Health Insurance Portability and Accountability Act) laws.
The client was now obligated to self-report the issue to the government and would be subject to significant fines for the violation.
For more information, see Client Relations for Consultants
As a result, the client ended the contract with Bob’s firm as specified in their contract. This resulted in a loss of over $200,000 in consulting fees, not including any follow-up business they could have earned after a successful project.
Consultants can be privy to a lot of confidential information when engaged on a client project. They may be told of strategic or trade secrets or have access to sensitive data that must be kept secure for regulatory reasons or simply to protect the privacy of the client’s customers.
When consultants are told of confidential information they need to take care to never discuss that information with anyone, including casual conversations with friends or even a spouse. Anyone repeating the information to the wrong person can put the client’s confidence at risk.
Client confidentiality should be on the consultant’s mind at all times.
Have you ever breached client confidentiality? What were the consequences?
If you would like to learn more about working in consulting, get Lew’s book Consulting 101: 101 Tips for Success in Consulting at Amazon.com
As always, I welcome your comments and criticisms.