Introduction
For many organizations, the decision to appoint a Data Protection Officer (DPO) starts as a compliance necessity—a legal box that must be ticked under GDPR. However, forward-thinking leaders are realizing that the traditional model of hiring a single, internal DPO is becoming operationally inefficient and financially risky. As data privacy laws expand globally (from the EU’s AI Act to US State laws), the “lone wolf” internal DPO simply cannot cope with the volume and complexity of the workload.
This guide explores the business case for outsourcing, demonstrating how “DPO as a Service” (DraaS) reduces overheads, eliminates single points of failure, and provides a level of risk protection that internal hires cannot match.
The Economics of Outsourcing: “DPO as a Service” Cost vs. Salary
Direct Answer: The primary financial benefit of an outsourced DPO is the shift from a high fixed cost (CAPEX) to a predictable operational expense (OPEX). On average, outsourcing the DPO function costs 30-50% less than a comparable full-time senior hire.
When you hire internally, the base salary is just the beginning. A strategic comparison reveals the “hidden” costs that bloat the budget:
| Cost Category | Internal DPO ( Full Time Employee | Outsourced DPO (Formiti Service) |
|---|---|---|
| Base Cost | £70k – £100k+ (Senior Salary) | Fixed Monthly Retainer (Fraction of salary) |
| Recruitment | 15-20% Agency Fees + Time to Hire | Zero. Immediate deployment. |
| Overheads | NI, Pension, Bonuses, Office Space normally 30% of Base | Included in the service fee. |
| Tools / Tech | £5k-£15k/year (Privacy Software licenses) | Often included or discounted by provider. |
| Training | £2k-£5k/year (Conferences/CIPP certs) | Provider absorbs all training costs. |
| Total Liability | £100k – £150k per year | Significantly Lower & Predictable |
Key Takeaway: Outsourcing removes the financial burden of “maintaining” an expert. You pay only for the output and guidance, not the downtime, holidays, or sick pay.
The “Hive Mind” Advantage: Why a Team Beats an Individual
Data privacy team expertise.
The greatest risk of an internal DPO is the Single Point of Failure. If your internal DPO falls ill, goes on holiday, or resigns, your organization is instantly non-compliant and vulnerable.
1. Continuity of Service
An outsourced service provides a team-based approach. If your dedicated lead consultant is unavailable, another expert with access to your file steps in immediately. There are no gaps in coverage, ensuring that a data breach on Christmas Day is handled just as effectively as one on a Tuesday morning.
2. Collective Intelligence
No single human being can master every global regulation. An internal DPO might be a GDPR expert but know nothing about Brazil’s LGPD or the new EU AI Act.
- The Outsourced Advantage: You gain access to a “Hive Mind.” When a complex cross-border issue arises, your lead DPO consults their internal network of specialists—cybersecurity auditors, AI governance experts, and international lawyers—to give you a verified answer. You are hiring a department, not a person.
Reducing Operational Risk and Liability
Outsourced DPO benefits.
Beyond cost, outsourcing offers a strategic layer of protection for the Board of Directors.
Removing Conflict of Interest
As discussed in our previous article on Internal vs. Outsourced models, assigning the DPO role to an existing manager (like the Head of IT) is a breach of GDPR Article 38. Outsourcing guarantees independence, satisfying the regulator that your auditor is not policing their own work.
The Liability Shield
- Internal Hire: If your employee makes a mistake that leads to a fine, you cannot sue them. You bear the full cost.
- Outsourced Provider: Professional DPO firms operate under strict Service Level Agreements (SLAs) and carry Professional Indemnity Insurance. While the company is always the “Controller,” an outsourced contract ensures that if the advice given is negligent, you have financial recourse. This transfers a significant portion of the operational risk off your balance sheet.
Strategic Agility: Scaling with the Business
Fast-growing companies need flexibility.
- Scenario: You decide to expand into the US market next quarter.
- Internal DPO: “I don’t know US privacy laws. You need to hire a US consultant.” (Cost increases).
- Outsourced DPO: “We have US-specific experts on our team. We will scale your contract to cover CCPA/CPRA compliance immediately.”
Outsourcing allows you to turn compliance up or down based on your activity levels, M&A activity, or geographic expansion, without the headache of hiring and firing staff.
Common Questions (Q&A)
Q: Is it safe to give an outsider access to our confidential data?
A: Yes. Professional DPO firms are bound by strict Non-Disclosure Agreements (NDAs) and confidentiality clauses that are often tighter than standard employment contracts. Furthermore, a DPO typically does not need access to the content of your databases (e.g., customer credit card numbers), but rather the process of how you handle them.
Q: Will an outsourced DPO understand our specific company culture?
A: A premium service is not a call center. You are assigned a dedicated DPO who learns your business inside out. They attend your project meetings, interview your staff, and integrate into your Slack or Teams channels, effectively becoming a “virtual team member.”
Q: What if we have a sudden emergency?
A: This is where outsourcing shines. Providers have guaranteed response times (SLAs)—often as fast as 1-2 hours for critical incidents. An internal employee might be uncontactable outside of office hours, but a provider ensures 24/7/365 coverage for emergencies.
Q: Can we outsource just part of the role?
A: Yes. Many large enterprises use a “Support DPO” model. They keep one internal figurehead but outsource the heavy lifting—handling Subject Access Requests (DSARs), vendor risk assessments, and DPIAs—to an external team to manage capacity.
Conclusion
The argument for the internal DPO is based on tradition, not efficiency. For the modern, agile business, DPO as a Service offers a superior value proposition: it slashes fixed costs, eliminates recruitment headaches, and upgrades your compliance from a “single person” to a “global team. with comprehenside data protection software”
It is the only model that allows you to scale your risk management as fast as you scale your revenue.