Indian SMEs vulnerable to cyber attacks

The first decade of 21st century has witnessed significant and unprecedented rise in the Information & Communications Technology (ICT) sector, which has lead to the emergence of the concept of virtual marketplace.


As these days businesses are becoming more and more dependent on technology to augment growth, the speedy adoption of ICT is also going up fast. To fully realise the benefits of the digital revolution, it is a must for the users to understand the complete importance of securing sensitive information.


Currently, economies across the globe are facing crisis due to economic meltdown and it has impacted growth of businesses of all sizes. In today's world, cyber attacks are not just focussed in its approach but they are also aimed at compromising business systems and networks. Most of them aim to steal high value information and cause disruption. It is believed that with the consistent change in the digital world, the onus lies on the businesses to stay updated about the latest technology so that they don’t fall prey to these risk.


Understanding the meaning of cyber attack
Cyber crime is a term that describes criminal activity in which computers or computer networks are used as a tool, a target. Computer crime consists of unauthorised access to computer systems data changes, data destruction, theft of intellectual properly.


It is also referred to as an attempt to get access to 'key' informations like usernames, passwords, other important details in the guise of a trustworthy entity via electronic communication. Social websites, auction sites, online payment processors or IT administrators are used often to attract the users.


Cyber security and India Inc
During the past four years, India Inc has seen four fold jump in cyber attacks and hence, it is also one of the reason why Indian companies are increasingly understanding the 'true' importance of cyber security for their businesses, irrespective of the sectors they belong to. A report by the Security and Defence Agenda (SDA) and McAfee states that India is among the top five nations in the globe which are most affected by cyber crime.


Since many business organisations depend heavily on the latest Internet technologies to enhance their competitiveness within both the domestic and international markets, the issue of cyber security has started to worry many.
Analysts feel that since Internet has altogether given a new definition to communication, therefore it won’t be incorrect to say that the second name of communication is now Internet. Although, Internet brings many benefits with speed, but questions have often been raised about its misuse and spams.
Meanwhile, according to Trend Micro quarterly security roundup report, India has emerged as the top spam-sending nation in the March quarter of 2012. It contributed to nearly 20% of the world’s overall spam volume followed by Indonesia at 13%, South Korea at 12% and Russia at 10%.


SMEs too faced with cyber attacks
SMEs, mainly, are vulnerable to cyber attacks since they generally have smaller customer base along with limited product lines as compared to the MNCs.


Although, SMEs are considered as an important economic force, they often have poor IT security infrastructure since they witness problems such as absence of resources, IT infrastructure and skilled manpower. The ever-increasing threat of cyber attack has brought the weakness of SMEs to light and made them vulnerable to these threats.


Today, the cyber attacks are aimed at businesses primarily with emphasis to steal high value information and also causing harm.


Meanwhile, a Symantec survey said that the advanced targeted cyber attacks are expanding their foothold beyond the more usual domain of large organisations, with 50% targeting SMEs during last year.
The survey – India findings of its Internet Security Threat Report –from Symantec threw light on various issues. Few of the important findings in the report comprise of:


- Symantec blocked an overall of more than 5.5-billion malware attacks during 2011, witnessing rise of 81% jump as compared to 2010.


- The web-based attacks saw considerable appreciation by 36% with more than 4,500 new attacks every day.


- 50% of the aimed attacks were for firms with lower than 2,500 employees and just 42% of targeted attacks were for the CEOs or senior managers.
This survey proves that it is very crucial that India Inc, especially SMEs, to have ample knowledge about the potential cyber threats.


Symantec also said that the threat of cyber attacks are on the rise in Indian cities like Bhubaneswar, Surat, Cochin, Jaipur, Vishakhapatnam and Indore.


Security breaches costly affair
Analysts believe that the average cost of the worst IT information security breaches in small companies is not a negligible amount. It is shocking to find out that majority of SMEs don’t have contingency plans to counter cyber attacks or even required security level to take measures against it.


Reports suggest that during the 2010-2011 period, India Inc clocked loss of nearly Rs1,000 crore due to data theft.


Moreover, the rising concern for cyber safety needs to act as a warning signal for the small businesses. While cyber attacks on SMEs may not impact national security, but they can have devastating effect on those whose livelihood depends on the digital operations of SMEs.


Security tips on how to protect SMEs against both online and offline risks
- SMEs should ensure that they follow 'need-to-know' policy for its employees. For instance, if data is stored on a central server, limit the count of people who have access to important files. It will prove beneficial at the time of both deliberate and accidental data loss.


- As SMEs often lack technical expertise, seeking professional security advice is an excellent option.


- Create specific norms about email policy as it often comes with considerable amount of risks. Employees need to be informed about the importance of online security issues on regular basis.


- Creation of back up files is a must. It won’t impact regular and daily business activities even at the time of security breach incident.


Meanwhile, a recent study from Microsoft said that Indian SMEs trust cloud security more, since most of them feel it offered significantly higher levels of security. Close to 64% of Indian companies have seen improved security levels after migrating to cloud and 52% claimed that they spend less time worrying about the threat of cyber attacks.


Centre keen to eradicate cyber attacks from India
Recently, Union Home Ministry displayed keenness to work with the National Association of Software and Services Companies (NASSCOM) in the area of cyber crime, as per Home Minister P Chidambaram. According to Centre, every year cyber crime in India is rising at 50% rate. In the past five years, nearly 9,000 Indian websites have been hacked.


NASSCOM and Data Security Council of India (DSCI) want cyber forensic labs to come up across India.


Conclusion
It is high time for the SMEs to develop an Internet use policy to protect their data. It could include policy that permits the employees to know correctly about their responsibilities when they are surfing the web during working hours. Moreover, small changes through awareness and best practices can lead to safe and secured business for SMEs.

The bottom line is that the threats from cyber attacks should not be avoided and cutting costs by not installing data protection measures is not an option. So, staying prepared with such technology will end the stress of losing personal information.

SME sector hardest hit with thriving counterfeiting menace

 Counterfeiting is one of the fastest growing economic evildoing and is emerging as a network of organised crime impacting the profits of companies, governments and individuals. The shortcomings of the growing threat were recently discussed at a day-long seminar on 'Developing a Pro-active Strategy to curb counterfeiting' on the World Anti-Counterfeiting Day on June 13 organised by leading industry lobby, Federation of Indian Chambers of Commerce and Industry (FICCI) forum Committee on Anti-Smuggling and Counterfeiting Activities Destroying Economy (CASCADE).


FICCI-formed panel called FICCI-CASCADE expands into a committee on anti-smuggling and counterfeiting activities destroying the economy. The committee is closely working with the government to curb this menace.
According to FICCI-CASCADE, the share of fake/counterfeit medicines was pegged at 15-20 per cent of the total Indian market, soft drinks at 10 per cent and fake cosmetics, toiletry and packaged foods share a ballpark figure of 10-30 per cent.


The term counterfeit not only signifies the forgeries of currency or documents, but it also describes the imitation of works at toys, art, clothing, software, electronics, pharmaceuticals, watches and many more. Counterfeit, an illegal imitation of goods, results in patent infringement or trademark infringement.
As per the reports made public earlier this year, the counterfeit goods in Asia are mostly produced in China and the nation is considered as the counterfeit capital of the world. Some Chinese companies are from head to toe into this business and are progressively faking many popular products owned by big Indian brands such as Dabur and ITC. The hazard is thinning out in an extent that is triggering losses worth as much as $5 billion annually.
However, the accelerative problem of Chinese counterfeiting is not only handicapping the growth of India but it is laming the economic development of China in the same amount.

Notably, in the recent past the Chinese government is attempting hard to eradicate the outspread thriving multi-billion dollar global industry of counterfeit from the country. The development comes close on the heels of Chinese government facing flak from scores of countries and also understanding the severity of the emerging danger.
In the same development, the neighbouring country has formed a 'leadership group' consisting the non-cabinet ministers to consider and deal with the counterfeiting problem, which is now estimated to account for 8 per cent of China's gross domestic product. In addition, the country has also pledged to expand its suppressed operations on counterfeit goods and establish a long-term mechanism to step up the fight.


The emerging players of Chinese industry have also felt the pinch of the flourishing counterfeits in their country. The counterfeiters are continuously forging their goods and marketing them across the world, which in turn leads to revenue loss and degradation of Chinese manufacturers in the global markets.


To fight and suppress the growing menace, the Chinese manufacturers sought for the needful and stringent law enactment against counterfeiting, so as to keep the threat at bay and help the Chinese industry to sustain the creditworthiness in overseas markets.


The boom of Chinese counterfeit products is ceaselessly hitting the Indian industry, primarily the small and medium enterprise (SME) sector and cottage industries. The peril is speedily killing the revenues of small traders, particularly from clothing, leather and jewellery sectors.
The sufferers demand both compensatory and punitive punishment for counterfeiting. The compensation will fill up the caused damages and punition will discourage the wrong-doers.


The enforcement of tough law against increasing penetration of counterfeiters and infringers is the demand of the hour. In the recently culminated seminar on the World Anti-Counterfeiting Day, Pankaj Agrawala, special secretary, department of consumer affairs, called for joint efforts to root out this nuisance and opined that the consumer consciousness is primarily the key to curb the growing menace of counterfeit goods.


There is a need to take progressive judicial declarations against counterfeiting and infringement. The cooperative, joint commitments from across the world will help to wipe out the problem.

Export consortia: How SMEs can access global markets effectively

The small and medium enterprises (SMEs) today are considered as a vital segment of the Indian economy as they provide a significant contribution to the country's GDP. Today, the SME sector accounts for around 35 per cent of the gross value of output in the manufacturing sector and over 40 per cent of the total exports from the country.


SME players enjoy dominancy in some of India's major export sectors namely textiles and garments, sports goods, leather products, gems and jewelry, handicrafts to name a few. But still they are hesitant to step into global trade. In today's globalization and liberalization era, their penetration is confined with several factors and it is a herculean task for them to compete in a global environment. Some major restrictions faced by the SMEs include resource crunch, shortage of trained manpower, risks and complexities involved in exporting. They choose to compete across local areas, at the domestic level.


In order to assume centre-stage in India's trade policy and also to expand penetration in the global arena, SME owners should come together and form a confederation while complying with their own limits and boundaries. The formation of export consortia by SMEs is an effective way to live up their dream of becoming active players in the export game as it will help them to get over the barriers of costs and lack of skills.


Defining export consortium
A voluntary group formed by small and medium sized businesses which pool in their own expertise, experience, resources and business network is called an export consortium. While in the consortium, they still enjoy their legal, financial and managerial rights. Their objective is to boost the export of goods and services of its members through joint actions.
This group promotes different levels of strategic cooperation among enterprises with their collective activities and initiatives to reach out to overseas markets.


Generally, such consortiums are non-profit alliances, and the members do not have to transfer control of their business to others.


The benefits it offers
SMEs can efficiently make a way into and enhance their market share in foreign markets at reduced expenditure and risk with the formation of export consortia. Besides, it allows the affiliates to improve productivity, increase knowledge and gain a way into larger markets and contracts with joint efforts. By and large, the voluntary group of enterprises is from a same business stream and the collaboration is aimed to make these enterprises globally competitive.


Despite these benefits, export consortia are also faced with some impediments such as delays emerging from the process of looking for like-minded and appropriate business partners and ensuring a productive partnering which itself is a huge effort asking for cohered efforts, dedication and resources. These challenges of a collaborative venture, however, fall short in front of the benefits of an export consortium. Member SMEs must work cordially and efficiently for the consortium to bring them access to exports.
An export consortium allows the members to also opt for collective bidding. This enables them to cater to large orders from foreign buyers which may not have been possible for a single enterprise of a small size.


The way forward

SMEs are progressively focussing on improved production methods, penetrative marketing strategies and management capabilities with the help of their vigour, flexibility and innovative drive in order to uphold and strengthen their operations in the global market. However, when tried, unity and collaboration brings good results as it follows the old saying 'unity is strength and division is weakness'.