Top Ten Security Risks for Small Business Outsourcing

Outsourcing is no longer considered as a business process meant for large companies, it can in fact increase the efficiency of small businesses and help them grow and expand in ways they never imagined. There are several security issues linked with outsourcing and this is especially true for small businesses 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 before they begin their outsourcing.

1. Information is everything in today’s world; if you have the right business information you will always have an edge over your rivals and vice versa. When it comes to business process outsourcing it is the information that you are sharing with an offshore outsourcing partner company that works on that information, as you desire. Thus if you do not check the credentials of the company and its reputation you may be placing valuable business information in the wrong hands.

2. Files are transferred electronically to outsource service providers and if this process is not handled in a secure manner with software that assures the sanctity of the data then 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 such as firewalls, anti-virus programs or for server safety that you may wish to utilize 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. In an age when credit card fraud and identity theft is on rampage it is essential for the small businesses to know the kind of security infrastructure the service provider has in place. This would be helpful in ensuring that unauthorized personnel do not have access to such information.

5. Small businesses are liable for any misuse of sensitive data provided to offshore vendor. Furthermore issues such as how the data and information will be transferred to and from between the small business and the outsourced team and to what level the outsourced team would have access to the company’s information are serious security concerns.

6. Data storage, information sharing policies and training procedures for the outsourced team also need emphasis or they may lead to inadvertent misuse or mishandling of information. A clear understanding of the scope of the outsource provider team’s access and working can help sort out these issues.

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 chaos 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. Often the legal system where the offshore outsourcing service provider is located may not recognize the security threats and risks involved in outsourcing and may not be able to enforce the outsourcing contract effectively. This is something that small businesses need to focus on before outsourcing.

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 with their outsource provider and they should strictly enforce it in all stages of their outsourcing project.