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Security Is a Prime Concern in Small Business Outsourcing

Mani Malarvannan

August 24, 2007

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Small businesses must take security as a key issue during the planning stage itself to protect their business critical data. Today outsourcing is meant for both large and small companies. It can in fact increase the efficiency of small businesses and help them grow and expand in ways they never imagined. There is 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..

Following are top ten security risks small business should know before they begin their outsourcing.

1. 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 then security of the information gets hampered.

2. Though there are no security, privacy, and auditing standards exist that can be followed in BPO projects, small businesses must come up with an overall security framework with their outsource provider and they should strictly enforce it in all stages of their outsourcing project.

4. Since files are transferred electronically to outsource service providers so it should be handle with care.

5. Data storage, information sharing policies and training procedures for the outsourced team also need emphasis otherwise 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.

6. Usually 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.

7. If the company you are outsourcing to is not capable of handling the job that they are entrusted with then this can lead to chaos and increased security risk.

8. Mostly 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, thereby leaving your business information vulnerable.

9. Small businesses are liable for any misuse of sensitive data provided to offshore vendor. Also 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.

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

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