In today’s world, organisations are having to adapt to the ever-changing digital landscape, with more of them turning to outsourcing their key business operations. This can include everything from core IT services, to HR, marketing and customer service. This can result in cost-savings, increased flexibility and capacity that they would otherwise not be able to deliver on their own. However, how can organisations be sure that the suppliers they are going into business with are trustworthy and comply with the same high standards that they themselves follow? How can they prevent themselves from being exposed to much higher risks in their supply chain?
In an article recently shared by Consultancy.uk, it was noted that organisations are placing too much trust in their supply chain’s digital security. The article stated that as many as 64% of UK companies had been victims of fraud or economic crime since 2020, with 20% of them saying that this had been caused by incidents from outsourced suppliers. This demonstrates that many organisations are failing to ensure that their suppliers are compliant with the necessary cybersecurity checks, thus potentially exposing themselves to financial and security risks. The impact of these not just being experienced by the organisations themselves, but by the wider marketplace. These statistics are not just worrying, but potentially critical to an organisation’s success.
How to mitigate supply chain risks
By taking the time in the earlier phases of the sourcing process, organisations put them in a better position to protect themselves in the long run. This means ensuring that suppliers have undergone thorough vetting, security checks and due diligence. Throughout this process, it’s also vital to pay clear attention to any red flags, including poor communication, high employee turnover, poor quality standards and price inconsistencies. These issues are most likely to appear early in the engagement of the supplier but can be difficult to spot. However, given the risks that may arise and the percentage of organisations which have been victim to such experiences, it’s worth taking the time over. Understanding the risks that may occur, establishing strong communication and governance, and continually striving to improve, will help maintain the health of your supply chain.
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