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Ever thought about the cyber risk posed by your suppliers? If the answer is no, then you’re not alone. However, with businesses (particularly larger firms) beginning to take action in this space, it’s a subject you can expect to start hearing a lot more about.
Whether you work with other suppliers – or you’re a supplier yourself – here’s what you need to know.
What is meant by ‘supply chain cybersecurity risk’?
Supply chain cybersecurity risk basically refers to the risk that a business could be negatively impacted by a cyberattack on one of its suppliers. For example, were a successful hack on a supplier’s network to lead to sensitive information being stolen or systems accessed.
With the 2024 Cyber Security Breaches Survey revealing that a whopping 50% of businesses (including 74% of large business and 70% of medium-sized firms) experienced a breach or cyberattack in the previous months, it’s now more important than ever that businesses protect themselves and consider all areas of potential risk.
This is leading a growing number of organisations to not only think about their own internal IT systems and cybersecurity measures, but also to review the cyber risk presented by their suppliers.
How many businesses are taking action?
While it’s currently much less common amongst SMEs, it’s thought that industry advice and guidance, pressure from clients, and feedback from auditors is all playing a part in encouraging larger organisations to start putting formal processes in place.
Just over one in ten businesses (13%) say they review the risks posed by their immediate suppliers. For medium businesses this figure rises to 27%, and for large businesses 55% – the latter being an increase on the 44% of large businesses doing so in 2022.
So, for SMEs working with larger businesses, it is not only going to be crucial to have robust cybersecurity measures in place for their own safety, but to protect their commercial relationships and growth too.
Here is a step-by-step guide to managing the risk.
The first step to managing supply chain cybersecurity risk is to understand the current picture. Map out your supply chain and identify who are your key suppliers, vendors, and partners, what are their roles and responsibilities, what are the products, services, or data that they provide or access, and what are the potential cyber threats that they face or pose. You should also assess the impact and likelihood of these threats on your business objectives and priorities.
To help manage your supply chain cybersecurity risk you should establish a minimum requirement for security standards for your suppliers, vendors, and partners. You should define what are the acceptable levels of security performance and compliance that you expect from them, and what are the consequences of failing to meet them. You should also communicate these standards and requirements clearly and consistently to your supply chain partners and include them in any contracts and agreements.
Monitor and audit your supply chain security by carrying out regularly check to verify that your suppliers, vendors, and partners are adhering to your security standards and requirements, and that they are implementing effective security controls and practices. Consider using tools and other methods to detect and respond to any security incidents or breaches that may occur in your supply chain, and report and escalate them as appropriate.
Collaborate and share information with your supply chain partners. You should foster a culture of trust and transparency amongst your supply chain partners and encourage them to share relevant and timely information about their security status, issues, and best practices. You should also participate in industry or sector-specific forums or initiatives that aim to improve supply chain security and resilience, such as the Cybersecurity Supply Chain Risk Management (C-SCRM) project by the National Institute of Standards and Technology (NIST).
Continuously review and improve your supply chain security. Regularly evaluate and update your supply chain security strategy, policies, and procedures, and incorporate feedback and lessons learned from your partners and stakeholders. You should also keep abreast of the latest trends and developments in supply chain security and adopt new technologies or solutions that will help enhance your supply chain security and resilience.
Remember, supply chain security is not a one-time effort, but an ongoing process that requires your constant attention and action. By taking supply chain security seriously, you could not only safeguard your business, but also gain a competitive edge and build trust with your customers and partners.
Need expert IT support?
Here at Dragon IS, we work with small and medium sized businesses, helping them with a broad range of issues relating to their IT infrastructure and cybersecurity. Call us for an informal chat on 01908 613 080 or email info@dragon-is.co.uk
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