What is supply chain cyber security and why does it matter?

What is supply chain cyber security?

Supplier cyber security risks refer to the threats of data loss, exposure or a breach of your own systems resulting from security incidents within your supply chain. These risks are heightened in today’s climate. Most companies rely upon multiple suppliers for products and services, including digital services, components and even personnel. In turn, these suppliers will have their own suppliers and so on.

Suppliers and partners bring numerous benefits for companies of all sizes, providing access to services that might not have been available in-house, enabling rapid innovation and improving the bottom line. However, the increasing reliance and interdependency between businesses also pose security risks.

Today’s supply chains can be long, complex and opaque. Adequately securing these ever-growing structures is therefore inherently challenging. Vulnerabilities may occur at any point – and the implicit trust given by companies to third-party vendors is ripe for exploitation by malicious actors.?

It’s no wonder, then, that the SANS institute’s supply chain security webcast noted that, if a company suffers a security incident, there is a 70% probability it will be through one of their vendors.?

Despite the risks, supply chain security remains a nascent field. However, a recent string of high-profile supply chain security incidents has brought this issue firmly into the spotlight. It’s clear that malicious actors are taking advantage of the increasing interconnectedness between businesses. The need for organisations to act is urgent.?

Why is supply chain security lacking?

As noted by NIST, there are presently no standardised practices for supply chain security. Without common standards in place, it is challenging for organisations to assess the risks posed by the vendors they utilise.?

A 2021 survey from the Department of Digital, Culture, Media and Sport (“DCMS”) also found the following barriers to effective supply chain cyber security: (i) little understanding of supplier cyber security risk, (ii) inadequate visibility into supply chains and (iii) a lack of tools to assess supplier cyber security.?

Presently, it appears that too many organisations inherently trust their vendors to have adequate security controls in place. However, such trust must be earned. In fact, we advocate that organisations take a ‘zero-trust’ approach to both employee and supplier security, whereby they dynamically and continuously authenticate suppliers, users and devices to prevent security incidents.

While we are likely to see more government advice – and possibly legislation – to improve supply chain security in the future, companies cannot rest on their laurels until then. Wherever a third party has access to your systems, data or premises, there are security risks to your organisation.??

In a worst-case scenario, a threat actor could exploit your supplier and consequently gain access to your sensitive data and systems (known as an ‘island hopping’ attack). To combat this threat, you must take a proactive approach to supply chain risk management. The importance of appropriate supplier management is reinforced in?ISO 27001, the international standard for information security, in the section dedicated to Supplier Relationships.??

The importance of supply chain security risk management

Despite the absence of standardised practices for supply chain security, globally recognised frameworks and principles exist, which organisations can use to inform their supply chain cyber risk management strategy.

Supply chain security, at its core, is about creating a formal programme for assessing and controlling the security risks associated with using third-party vendors. It’s worth noting that supply chain cyber risk management should not be treated in isolation but should be integrated into broader risk management processes.

Creating a supply chain cyber risk management programme does not occur overnight. It will take time and resources, and will likely involve systemic changes to procurement processes and your organisation’s approach to supplier relationships. You effectively need to shift your company’s cultural view of supplier management.?

While the task is large, the benefits are also plentiful. A robust supply chain cyber risk management programme will reduce the probability of your organisation suffering a vendor-related security incident. You may also discover new operational efficiencies by gaining a deeper understanding of the structure and resilience of your extended supply chain. It will also stand you in better stead to respond in the unfortunate event of a cyber security incident.

Lastly, the increased assurance you receive from successful risk management exercises will improve trust between you and your suppliers. This, in turn, may assist you in winning new contracts.?

How to get started with supply chain risk management

We have written an in-depth guide on supply chain security, which is an excellent place to start if you want to learn more about building your cyber risk management programme.?

As well as our own resources, we advise reviewing NIST’s guidance?on Supply Chain Risk Management Practices for Federal Information Systems and Organisations. The UK’s?National Cyber Security Centre also (NCSC)?proposes?12 principles?designed to enable effective control of?the?supply chain.?

Another valuable resource is ISO 28000,?which provides specifications for a security management system?for the supply chain. Organisations can be certified to ISO 28000 to demonstrate best practices in supply chain risk?management?–?but?be aware the standard?covers the wider topic of supply chain risk management (of which supplier security risk management is just one part).

Digitalising supply chain cyber risk management

TPRM can seem like a moving target. Organisations are continuously onboarding and offboarding suppliers – and these suppliers themselves are evolving and growing. This means that a supplier considered low risk today might be high risk in a matter of months.

Keeping track of suppliers' cyber security risks through manual, paper-based processes is both cumbersome and unreliable. To that end, there is a growing market for technology platforms that simplify the supplier risk process, helping organisations to make sense of supplier risks in a clear, intuitive way.

Our own platform, Supply IQ, offers straightforward tools for supplier assessment, risk identification, risk rating and supplier security improvement activity. Using the SupplyIQ dashboard and reporting system, you can view questionnaire responses, risks identified, risk severity and mitigation work in progress.?

Built and hosted in the UK by our own development team, SupplyIQ becomes your secure, single point of truth for supplier security management. Learn more about SupplyIQ and what Supply Chain Security Services we can offer.

Need advice on supply chain risks for your business?

With the increasing interconnection of business, managing third-party suppliers is becoming a complex and sprawling issue, opening further avenues of risk. Limited resources and the availability of adequate expertise around this subject are proving to be a key challenge. Call us for a no-obligation chat if you need support and direction.

It's also important to note that a supply chain management strategy can help ensure you are NIS 2 compliant. If your organisation falls within the scope of the NIS 2 directive, it would be a good idea to work with supply chain security management services, such as Evalian, that can also support you with complying with NIS 2.

To find out more, visit our blog where we give you an overview of NIS 2, and also how to understand if you are in scope.

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