Security Risk in Outsourcing in Small Business by Mani Malarvannan

Not only big business but also small business can outsource their work. Outsourcing increases the efficiency of work. Several security issues linked with outsourcing. This is especially applicable to small business where business processes outsource (BPO) management is not efficient or effective. Small businesses must take security as a key issue during the planning stage itself to protect their business critical data. Following are top ten security risks small business should know:

1. Collecting information is one which will keep you at an edge over your rivals and vice versa. Business process outsourcing is nothing else than sharing information with your outsourcing partner. Thus only credentials and reputation of the company should not matter

2. Since the files are transferred electronically to outsource service providers so it should be handled with care to get high end security. Software used must give high security otherwise you are placing you company and business at risk.

3. Often the employees of the company you are outsourcing to may not be aware of the security software and thereby leave your business information vulnerable.

4. Most often the data that needs to be processed by the service provider is confidential and if it is not handled in a secure manner it may be considered as an invasion of privacy. This is especially true when the information includes names, addresses, social security numbers and credit card information of clients and employees

5. Small businesses are liable for any misuse of sensitive data provided to offshore vendor because most of them can't afford costly but good quality security software

6. Emphasis must be given to data storage, information sharing policies and training procedures for the outsourced team or they may lead to inadvertent misuse or mishandling of information.

7. It is vital that the number of people who will handle the business data and information in the outsource provider's office is known to the small business. Issues such as the personal security of the service provider, security against industrial espionage and other such issues need to be adequately addressed. Simple issues such as if employees in the BPO vendor's office can take home information that they have worked on or if sub-contractors will have access to the small business information need to be dealt with before the outsourcing contract is signed

8. If the company you are outsourcing to is not professionally capable of handling the job that they are entrusted with then this can lead to confusion and increased security risk. For instance any certified public accountant would know that the financial information of a business and the manner in which they are processed has dramatic affects on its tax issues and the manner in which its budget is planned and earmarked.

9. Legal system of both the companies country must be check thoroughly otherwise you may Face problem with the contract.

10. Though there are no security, privacy, and auditing standards exist that can be followed in BPO projects, small businesses should come up with an overall security framework they require for their project.

About the Author

Mani Malarvannan is cofounder of Cybelink, a company specializes in small business financial and accounting outsourcing like Bookkeeping, Tax, Accounts Payable, Accounts Receivable, etc. For more info visit www.cybelink.com