Digitalizing Your Operations? 5 Risks Small Businesses Should Account For

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Relying on pen, paper and a cash register in 2017 is not a viable way to keep your business flourishing.

While initially digitalizing your operations may seem costly and challenging, the benefits are rather obvious. You’ll notice an increase in speed and efficiency thanks to automating your processes. Communication and customer service will become easier as well.

On the other hand, you will take on some additional business risks. Here are five things you must watch out for.

Fraud Prevention

Any business that accepts payments online is at risk for fraud. In fact, 47% of the world’s credit card theft occurs in the US. You must take steps to mitigate that risk for both your business and your customers. One contributing factor to the increase in online debit and credit card fraud may be the additional security measures being implemented in brick and mortar locations. The most obvious of these being the installation of chip reader technology in point of sale systems at most national and local retailers.

It’s no wonder that criminals are focusing their efforts online. E-commerce businesses must be vigilant about using secure payment solutions, and keeping them updated. Having a clear plan of action in case of fraud is also recommended.

Reputational Risks

Today, customers prefer to build relationships with businesses that they respect. While price and service will remain major considerations, social justice and corporate responsibility are two things that consumers mull over before making a purchasing decision.

Consumers will appreciate that you’ve gone digital, but will also want to know how you went about it. For example, are you outsourcing or are you hiring local talent? Are you purchasing software solutions from a company that is reputable, or one that is known for making workers labor in inhumane condition.

Apple, for example, took a huge hit when people learned that the iPad was being produced in near sweatshop conditions. And so does a number of fashion retailers.

Finally, keep in mind that going online makes you subject to reviews and other scrutiny. Ignoring customer reviews, rants and complaints on social media or failing to attend to those in a timely manner, can cost your business a pretty penny.

Loss of Vendor Support

What happens if your software vendor goes out of business? That’s a big risk to take when mission critical data along with your ability to continue daily operations is at stake.

One solution is to include the use of software escrow service in any agreements you have with vendors. This means that a reputable third party holds source code, documentation, and file layouts. This allows the vendor to maintain ownership of their intellectual property while giving you the peace of mind that you will have what you need if the vendor goes out of business.

Losing Data During Migration

Any time you migrate data from one system to another, you risk losing some of that data. Data loss usually happens when the process that is moving information from one system to the next encounters an issue.

Think of it like this. If your computer crashes while you are editing a document, you usually lose the last few changes you made, sometimes more. Data migrations work the same way. This is why it’s important to backup data, and have a means of verifying that everything moved across successfully.

Cyber Attacks

Finally, the risk of cyber attacks cannot be ignored. There have certainly been plenty of news stories about companies who have been put through the ringer after their customers’ personal and financial data has been compromised.

It’s extremely important to put security measures in place to protect sensitive information. This includes customer data, but also sensitive business information as well. Remember that many cyber attacks occur from within the company, rather than being carried out externally.

While none of these risks outweigh the benefits of going digital, it remains good practice to be vigilant. By doing so you are protecting your business and your customers.

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