An innovative pairing of government and tech are working together to protect human rights abroad. 

The UK government has published its first ever cyber security guidance that provides advice on how to manage export risks, thus leading the way in ethical business export practices.

‘Assessing Cyber Security Export Risks’ is the first tech sector guidance of its kind in the world. It provides cyber security companies of all sizes with actionable advice, to help identify and manage the risks of exporting their products and services. It gives detailed background information and a framework to help companies develop their due diligence processes, manage human rights risks and identify national security risks. This reduces the likelihood of a buyer being able to use their technology to help perpetrate human rights abuses. It also reduces the likelihood of reputational damage to British companies.

Sounds a bit too UK-orientated. Why should I be interested in this?

On the face of it the guidance is catering for a suitably British audience, but let’s not downplay the importance of this publication. Guidance of this kind is truly a watershed moment – hopefully providing impetus, inspiration, and paving the way for similar initiatives.

Cyber security capabilities are used around the world to strengthen the integrity of critical national infrastructures, prevent the theft of corporate and personal data, and tackle fraud. Their export presents the UK with a significant economic opportunity. HM Government has recognised this and is working with industry through the Cyber Growth Partnership to help companies realise this growth, with the aim of increasing UK cyber security exports to £2bn by 2016.

Most often cyber security capabilities are used only to defend networks or disrupt criminal activity. However, some cyber products and services can enable surveillance and espionage or disrupt, deny and degrade online services. If used inappropriately, they may pose a risk to human rights, to UK national security and to the reputation and legal standing of the exporter.

Ruth Davis, Head of Cyber, Justice and Emergency Services, techUK said: “The advice in this document is designed to help companies reduce reputational risk and to have confidence in the deals they make. We believe that ethical business practice is key; human rights and a vibrant British cyber sector are two sides of the same coin.”

The Guidance sets out a risk assessment process that helps companies to: 

• Look at the capabilities of the product or service they want to export and how it could be used by purchasers.
• Examine the places where they are exporting to including their political and legal frameworks, the state’s respect for human rights and potentially vulnerable people.
• Assess who the end purchaser of the product is and how they intend to use it.
• Evaluate potential business partners and re-sellers.
• It also provides advice on how to mitigate and build risk management clauses into the contract.

Dibble Clark, Cyber Lead at 3SDL, a Malvern Cluster cyber security company commented: “Recent events have put the human rights responsibilities of cyber export companies in the spotlight and there is particular scrutiny on our sector, both from governments and NGOs. The responsibility to respect human rights is something no company can ignore, whether large or small.

Rt. Hon Baroness Anelay, Minister of State for Foreign and Commonwealth Affairs said: “This groundbreaking guidance will help cyber security businesses manage human rights risk by adopting effective due diligence policies and enable them to respect human rights wherever they operate.”

They say this is the most wonderful time of the year – but the growing transatlantic popularity of this sales phenomenon won’t just put strain on cash registers… The frenzied (sometimes violent) stampede of bargain hunters will undoubtedly place strain on supply chains and logistics networks too.

According to Visa, £360,000 is expected to be spent every minute on Black Friday (28^th November) – with a further £281 million forecast to be spent on the busiest day for online shopping; Cyber Monday.

Black Friday has long been established as a traditional sales bonanza in the US, and is predicted to see $2.48 billion spent online this year, up by 28 per cent. Meanwhile the more recent eCommerce follow up Cyber Monday is expected to increase by 15 per cent to $2.6 billion, and Thanksgiving Day itself has been predicted to see online sales of $1.35 billion, up 27 per cent.

Global IT services company IT Infotech have shared with us its thoughts on why retailers, logistics and delivery firms should be prepared for extra pressure through Black Friday to Cyber Monday.

The American tradition has been an increasingly popular import in the UK, with leading retailers including Amazon, Argos and John Lewis offering sales both online and in-store.

“UK retailers are already bracing their logistics operations to handle the Christmas rush, which can see as much as 70 per cent of yearly sales volumes achieved in the last two weeks of December”, says Venkata V, who works with some of the top retailers around the globe.

“However, with the US expecting one of the biggest sales periods in history this Thanksgiving, the UK should be prepared to see a spike in demand and more strain on their logistics. Even retailers not offering specific Black Friday discounts themselves can expect more demand as shoppers are inspired to hunt for Christmas bargains.”

The rapid escalation in demand created by sales events like Black Friday can be extremely lucrative, but also cause havoc on unprepared supply chains, as demonstrated by China’s recent “Single’s Day” event. The country’s biggest sales event saw the e-commerce leader Alibaba rake in sales of over £9 billion, but the day has previously slowed down delivery times from two days to over a week.

Saravana Kumar who heads Supply Chain consulting in ITC Infotech says: “Marketing, production and logistics teams should work closely together to make sure their operation can handle increased demand on the 28^th of November, especially as they are likely to already be stretched by the Christmas period. Flexible retailers have a strong opportunity to capitalise on the sales event by reacting to demand and adjusting their pricing strategy on the fly, increasing and lowering prices as needed”.

“The increased complexity of omni-channel retail has made the supply chain more challenging, also presents an opportunity for well-prepared operations. Capacity should be available to quickly move stock for the most popular products around to meet increased demand online or in particular stores.”

Further comment is offered from Paul Doble, chief sales and marketing officer at DX, a leading independent mail, parcels and logistics end-to-end network operator:

“Throughout the busy Christmas trading season retailers must try to forecast as accurately as possible the volumes that will need to be sent, and then communicate these expectations to their logistics partners, who will take up a huge percentage of this volume. The alternative is the situation many retailers have faced in previous years, where through a combination of inaccurate planning, poor communication and unanticipated weather conditions, demand outstrips capacity and leaves retailers unable to meet their promises to online shoppers.”

Doble continues: “It’s a problem that is often exacerbated when retailers try to maximise the online shopping window, pushing back their Christmas order deadlines and thereby drastically increasing the risk of delayed deliveries when bad weather and other factors disrupt the supply chain.”

Doble concludes with a thought-provoking double-header: “Ultimately, when Christmas presents fail to arrive, it will be the retailer that bears the brunt of disgruntled Customers and negative publicity. As such, retailers need to be asking themselves the question: just how robust are my Christmas delivery plans?”

This is a guest article from Visna Lampasi, The Faculty’s 2014 Chief Procurement Officer of the Year (Asia Pacific).

With the growing emphasis placed on the CIPS Ethical Mark, we quizzed Visna Lampasi – Global Chief Procurement Officer & Procurement Thought Leader on how to detect fraud in your organisation.

Procurious asks: Do you believe fraud has become a bigger issue for Procurement in recent years? And if so, why? 

Visna answers: The number of instances in procurement fraud and corruption is increasing and becoming a far bigger issue than previously for organisations globally.

Whilst some industries have imposed pay freezes and pay cuts over the last number of years, the living costs have been rising and during a time when the jobs market has been stagnant.

If you couple this with an organisation who has poor procure-to-pay controls, then this will unfortunately reveal opportunities to defraud.

Procurious: From a  procurement perspective, what do you see as the most common examples of unethical conduct  are in the supply chain today?  (bribery; misconduct by suppliers; misappropriation of company funds etc.)

Visna: There are many types of procurement fraud, which can be committed across the entire source-to-settle core process not just procure-to-pay.

The ones that I have come across the most throughout my procurement career are: – 

·         Fictitious suppliers and sub-contractors
·         False, inflated or duplicate invoices
·         Unjustified sole source awards
·         Bribery and kickbacks
·         Undeclared Conflicts of Interest
·         Purchases for personal use or resell
·         Split purchases

Procurious: What do you believe are the most important activities for detecting and deterring fraud in the business?  

Visna: The simplest way to prevent procurement fraud is to: – 

1)      ensure that you have robust “Procurement Policies & Procedures” in place and that these are reviewed regularly to ensure that they are effective,

2)      proactively drive organisational “Compliance” against these policies and procedures,

3)      ensure appropriate “Segregation of Duties” – ensure that the person who can set-up a supplier, issue purchase orders, and process an invoice for payment is not the same,

4)      ensure tight controls within your “Procure-to-Pay” process as a minimum, with appropriate checks and balances in place.

Don’t forget to address your “Source-to-Contract” process as well, which is the front end of the Source-to-Settle process and more often than not is disregarded.

Procurious: Government Procurement have long had strict gift and hospitality policies in place and the private sector are increasingly following suit. Do you think there’s such a thing as ‘going too far’?

Visna: There needs to be a balance here and one that takes into account different cultures and customs that an organisation is going to encounter when doing business both locally and overseas.

The important thing here is that an organisation has a policy in place around gifts, meals and entertainment and that is being followed by its employees.

Full transparency is key and will assist to address questions around reasonableness and perception prior to acceptance.

Procurious: Western countries often have quite different beliefs and practices around what constitutes unethical behaviour.  Do you have any tips for dealing with suppliers in other countries which may take a more lax attitude towards gifts and payments?  

Visna: My suggestion would be to look to your organisation’s corporate values and Code of Conduct for guidance around expectations of ethical behaviour and determine if these align with the country you are seeking to do business with.

Many organisations also have lists of embargoed countries, which will also assist in identifying whether the country is approved to do business with.

Procurious: If businesses are serious about taking a ‘zero tolerance attitude’ towards corruption, what policies, procedures and employee training will be fundamental?   

Visna: Robust procurement policies and procedures are fundamental, supported with regular communications and on-going training to increase awareness and build capability.

Current members of The Chartered Institute Procurement of Supply can complete an eLearning  module on Ethical Sourcing, which incorporates elements around procurement fraud and corruption.

A license can also be purchased for the Chartered Institute of Procurement & Supply Anti-Procurement Fraud Training,  which will allow organisations to deploy this online training to all of their employees globally.