Businesses Suffer From Big Security Gaps

VERNON HILLS, Ill. ( TheStreet) -- Small businesses are realistic about how they're faring in the economy, but they suffer delusions of grandeur when it comes to subjects such as disaster recovery, data backup and information security, according to a report by CDW.

Still wary about an economic rebound, only 45% of respondents said they were optimistic about their chances for significant growth in the next five years. But while 99% of 613 surveyed executives reported believing their businesses could recover data in the event of a major loss, the majority haven't actually prepared for it.

To wit: Forty-five percent of responders said they have no plan to evacuate vital records and equipment in case of an emergency (hurricane, fire, what-have-you), 29% have no data-restoration systems, 29% have no means of backing up data from a remote location and 13% don't even bother to back up their data on a regular basis.

"We took it as a classic case of the knowing/doing gap," says Lauren McCadney, senior director of the small-business segment at CDW. "Typically, there are multiple layers to a business continuity plan. What we've seen happen is that businesses have one piece in place, not understanding that if they don't have the entire solution, they leave themselves vulnerable."

At the same time, the majority of businesses don't have sufficient IT-security measures in place, the report says. A fifth have failed to install anti-virus software, such Norton AntiVirus from Symantec ( SYMC), on all company PCs. Fifty-one percent don't bother to change their passwords periodically. Two-thirds have no virtual private network or remote access client (such as those available from Citrix ( CTXS) or Cisco ( CSCO). That's an important security measure for any small business that employs telecommuters. And 37% don't bother with spam filters.

The study also found that most small businesses aren't prepared for the sudden departure of the chief executive or other key executive. That's due, in part, to employees failing to adequately share information. Sixty-two percent of respondents reported they have no knowledge-management system in place, or just aren't sure whether they do. That may have something do with the fact that "knowledge management" is an overused, amorphous marketing term. And in the past, small businesses may have shied away from knowledge-management software because it required multiple licenses for multiple applications. But in the age of social media, there's no excuse not to share information. Software analysts are bullish on the next release of Sharepoint from Microsoft ( MSFT), which is in beta tests now and due out next year. It includes features such as blogs, wikis and user profiles. There's even a "Sharepoint for Small Businesses" page on Facebook.

"This is the direction that knowledge-management -style initiatives are going in -- encouraging collaboration among workers through social media and the sharing of expertise rather than just having a static repository of it," says Katey Wood, a research associate at The 451 Group, a technology consultancy in New York.

-- Reported by Carmen Nobel in Boston.