Could poor cyber security see SMEs miss out on key contracts?

Cyber security is growing in importance for businesses of all sizes due to the potential ramifications of falling victim to hackers.

High profile cases such as that of TalkTalk highlight that firms are increasingly at risk and new research from KPMG has highlighted the need for proper cyber security.

A study of procurement managers found that 84% would terminate existing deals should an SME supplier be hacked.

Suffering a data breach could therefore have significant consequences for small firms, which is why a focus on data protection is key.

The study even suggests that businesses may miss out on essential contracts should they not have the capabilities to adequately protect sensitive data – KPMG suggests as many as 70% of firms could do more in this regard.

This could have severe financial consequences in terms of lost income, although being a victim of hacking could have far more severe repercussions.

It is therefore essential that SMEs take cyber security seriously, as those operating on a tight budgets can ill-afford the extra financial pressures that a data breach may bring.

Any business fearing for their financial position or in need of business rescue should contact insolvency practitioners to discuss the best course of action to take.

Cyber security is becoming a business critical issue as larger firms are focusing on suppliers and whether or not they are capable of operating in a safe technological environment.

Some 94% of those questioned by KPMG revealed they consider cyber security standards before awarding a contract to a small business supplier – showcasing the importance of having proper security measures in place.

SMEs need to focus on how they are tackling issues surrounding cyber security and on the ways in which they can ensure they and their sensitive data sets are protected.

This is especially true as a growing number of procurement managers are looking for cyber security accreditations among their suppliers.

Those without them are increasingly expected to take measures to ensure the safety of data while 47% of existing contracts include clauses that state a firm must report when it is hacked.

Cyber security is already an issue in the limelight, and it will continue to hold such a position for as long as hackings and the loss of information takes place.

By Phil Smith

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