The Ferrari Consulting and Research Group through its affiliated Supply Chain Matters blog features a series of blogs outlining individual 2022 Predictions for Industry and Global Supply Chains. In this series, we share with our readers excerpts of the ten specific 2022 Predictions that will be included in our Research Advisory that will be made available in early January 2022.

In this particular posting, we share our prediction related to the ongoing need for cybersecurity defenses and response being an essential requirement in assuring business continuity.

 

In the five prior Supply Chain Matters postings in this Predictions series, we shared the context of our 2022 Predictions, as well as our first three predictions:

Global Economic Forecasts Portend Added Uncertainties for Supply Chain Management Teams

What Should Supply Chain Management Teams Expect In 2022 And Beyond

2022 Predictions for Industry and Global Supply Chains Revealed- Part Oneour prediction of overall product demand and supply networks outlook in the coming year.

2022 Predictions for Industry and Global Supply Chains Revealed- Part Twoour prediction relative to restoring more direct control in inbound direct materials and supply management.

2022 Predictions for Industry and Global Supply Chains-Part Threeour prediction concerning supply chain talent recruitment and retention taking on critical importance.

 

2022 Prediction Four:

Cybersecurity Defenses and Response Will Remain an Essential Requirement in Assuring Product Demand and Supply Network Business Continuity.

Perspective

In our 2019 and 2020 predictions research advisories, we have included a prediction relative to the increased vulnerability of businesses and global supply chain networks to cyber threats and the consequent business disruption or continuity risks. Since that time hackers have especially targeted supply chain IT infrastructure and application systems because of the number of potential vulnerabilities in entry points or lax defenses.

While IT organizations generally hold responsibility for overall data and systems security, cross functional supply chain, procurement and product management teams have a critical role to play in ensuring that business processes, employee and supplier practices adhere and are managed to the highest cyber security standards.

Our belief is that the year 2022 will present added challenges as the sophistication of bad or nation state actors, and the effects of pandemic driven disruption continue to make businesses more vulnerable and subject to cyberattacks. The United Nations has already indicated that incidents of cybercrime were up over 600 percent during the pandemic.

Hybrid work environments that include teams working remotely and needing desktop or mobile access to mission critical supply chain software applications adds to the threat landscape. As more businesses and supply chain teams adopt Cloud-based applications as part of their digital transformation strategies, cybersecurity becomes a joint responsibility in detection, ongoing security, response and mitigation capabilities

Specific Predictions

Companies that are fulfilling product and services requirements for military defense, government agencies or aerospace technology providers such as aircraft will especially encounter stepped-up compliance and mitigation policies in the coming year. Industries delivering deemed strategic products in a nation’s economic growth and welfare will be presented with enhanced policies and directives related to the protection of data and information, as well as stepped-up enforcement for reporting of incidents.

Newer forms of threats now include cyber criminals taking advantage of increased occurrences of more pronounced national disasters such as severe storms, health emergencies or transport delays to prey on system and IT infrastructure vulnerabilities. An added threat is in targeting companies or technology providers undergoing M&A, spin-offs or SPAC activities when due diligence in data security measures may become lax or subject to falling thru the cracks.

Security experts further indicate that as cyberattack and ransomware incidents continue in frequency and scope, the ability of businesses to obtain necessary cyber security liability insurance is becoming much more difficult or constrained, given the amount of losses paid out by liability insurance carriers over the past year. This can result in more out-of-pocket costs for businesses, not only in ransomware demands, but in consequent impacts to the business in lost sales or customers. The ability to garner cyber liability insurance may well be predicated on increased security and mitigation measures on the part of businesses and their supply chain management teams.

Small and medium businesses will especially encounter the threats and business consequences of cyberattacks since bad actors know that such organizations lack the IT worker resources and budget for data and system security measures.

As noted in Prediction Three, cybersecurity threat detection, response and ongoing mitigation also has a dependency on the availability of skilled IT and cybercrime detection talent among both cyber security specialist services firms and business.

A further dependency will be on the ability of Cloud infrastructure hosting and applications software providers to continually augment their data security measures with advanced technologies. In December 2021, a major systems security flaw in widely utilized software, termed Log4j was revealed, reportedly making many systems vulnerable to hackers.

In mid-December 2021, a ransomware attack affected Cloud provider Kronos, one of U.S.’s largest online human resources and payroll administration providers. The outage involving the Kronos Private Cloud application affected a large amount of multi-industry customers and may have exposed sensitive employee data. Restoration of services was expected to extend for several weeks.

 

In this next posting for this series, we will share our prediction related to increased prioritization of supply chain digital transformational efforts in the coming year.

Stay tuned.

 

Bob Ferrari

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