In business and in life, it's an online world. If your supply chain company isn't keeping up to date with the latest digital technologies, the odds are you're falling far behind your competitors - and likely doing so faster than you realize. With that in mind, it's important to make sure your investments keep you moving in the right direction, but with an important note of caution.
Experts largely say some of the biggest business risk companies may face in the supply chain these days comes from increased digitization and access to critical information, according to Blue Turtle Technologies. Especially given how many companies rely on third-party organizations for their ongoing business operations within the supply chain, even a small crack in the armor - not only for themselves, but also in their partners' systems - could put their platforms and operations at risk.
Even if you have the budget to have an on-call or dedicated security team, those professionals are likely to only have control over your in-house systems, the report said. That means they cannot guarantee resilience against issues originating from other firms' systems if you automate data sharing back and forth. This necessitates a third-party risk management program that will at least allow your business to react to threats more nimbly.
How common is the threat?
However, not all threats were external, and regardless of their source, they could cause major damage. In 2019 alone, there were almost 300 cybersecurity incidents reported that directly targeted companies' supply chain operations, and by far the most common type of incidents were those related to ransomware, according to a recent study from DHL's Resilience 360, as highlighted by TechRepublic. While the number of directly affected businesses on a global scale was relatively low (fewer than one per day, on average) the consequences can be shattering.
In the wake of being hit with such attacks, companies may see potentially massive disruptions to their day-to-day operations, the report said. One Belgian company was hit with a ransomware attack so difficult to deal with the company shut down operations for a month and put hundreds of employees on furlough until the problem could be sorted out. Unfortunately, the success of such incidents is only likely to embolden others to try them as well, making them more common going forward.
Investment on the rise
This all comes at a time when companies see the need to catch up with industry trends and are pouring more money into software platforms that give them greater control of their data, according to market analysis from Technavio. It's expected that from this year through 2024, the market for supply chain management software will grow at a compound annual rate of nearly 11% to a value of $9.56 billion. More than a third of that growth is expected to come in North America.
With all this in mind, companies need to make sure they are investing cautiously and wisely, putting the security infrastructure in place to grow along with the industry - but without taking on added risk.