Data is vital to the operation of all companies and is becoming as important as cashflow to their success. Its value cannot be underestimated, not just for the business involved but also to those who can sell it on to competitors at a high price, or criminals who can defraud individuals.

Losses of data have hit the headlines many times in recent years. One of the most recent concerned staff at phone company T-Mobile, who passed on millions of records from thousands of customers to third party brokers.

They then cold-called the customers as their contracts were due to expire.

Last year also saw the contact details of 10,000 members of the British National Party published online, which led to harassment and threats of the individuals concerned.

And in May, the information commissioner told the NHS to improve its data security after breaches involving the loss of thousands of personal medical records.

This data usually involves the names, addresses and contact details of thousands of people along with their financial information and in the case of the NHS, their medical history.

Sometimes such records are simply lost or mislaid, but often they are sold on at a profit to third parties who can exploit them for their own commercial or, more seriously, criminal gain.

These days businesses are usually adept at keeping their IT secure from attack from hackers and criminals from the outside but less attention is paid to the trojan horse within — employees and those with inside information who can harvest data, often undetected.

Company systems are constantly being developed, modified and updated and very often real data is used in the process. And the more it happens, the greater the risk of abuse from in-house testing staff, consultants, partners and offshore development personnel.

Huw Price, managing director of Eynsham-based Grid-Tools said: “It happens all the time — it is a big hole with major companies in that they tend to use production data in developing and testing environments which tends to be less secure.

“In the testing environment there can be hundreds of testers and developers, and there is more risk of a breach.

“Most data losses would come through internal staff in production, developing and testing environments.”

It is this area where the Government is cracking down, according to Mr Price. It wants to see a minimum of “real” data being used in testing.

“Most companies have been using real data since the dawn of computers but now the Government has imposed legislation and is clamping down.”

The other problem identified by Mr Price is that the vast majority of companies now outsource some or all of their IT requirements, which means they can’t control how it is managed as effectively.

Data is now shipped out to India, for example, where there are good and bad companies, and the risk of loss has grown exponentially in the last five years.

Grid-Tools has been operating for about 20 years in the software field but recently has been focusing on data security as, in the last two years, it has been contacted by a number of global companies and institutions.

Its solution, Datamaker, is a tool that will ‘scramble’ data so that it is unrecognisable but still usable for development purposes.

Mr Price said: “We use lots of different mathematical algorithms which make it practically impossible to get back to the original data.”

Unusurprisingly, the market for this kind of capability is huge, and British companies such as Grid-Tools is leading the way in this kind of technology.

Another key area is the creation of data from scratch, which effectively supplies information such as lists of fictional new customers or members of staff on a payroll, so there is no risk of any data breaches.

The Datamaker system can also work on a wide range of technology and cross-map different databases within a company.

Mr Price said: “At the moment, there are so many mergers between companies such as banks and systems have to be integrated.

“For example, HBOS and Lloyds had up to 600 different systems to merge.”

Mr Price started the company, then known as Bit By Bit, in Wall Street, New York, in the 1980s when even then data was extremely important among the financial sector. He moved to the UK in 1993.

Now the firm works with clients including large United States institutions and UK government departments, and has about 40 clients worldwide.

He claims the larger institutions are more open to the idea of data protection but private enterprise is more focused on the bottom line, which makes it resistant and therefore more vulnerable to leaks and theft.

Mr Price said: “There is a lot of work to be done in the next five years. We are looking to expand into complete test data management for all aspects of industry, and are busy working on more scientific approaches.”

Name: Grid-Tools Established: 1993 Managing director: Huw Price Number of staff: Ten Annual turnover: £1m Contact: 01865 884600 Web: www.grid-tools.com