Supplier Risk Monitoring Must Change for the Digital World
Written by John Bree
Digital transformation is inevitable. Enterprises across the industry spectrum are thinking digital. The successful enterprise will not rush headlong into digital, rather, it will adopt an organized and systematic approach to transformation.
A digital enterprise will enable the extended value chain – from suppliers to employees to customers – to seamlessly collaborate, react, and interact. Cost effective and efficient digital transformation begins with a series of process assessments and streamlining.
While cutting edge technology promises never-seen-before returns on IT investment, the technology alphabet – AI, ML, AR & VR, cybersecurity – is evolving every day. Considering the cost for large scale technology change, it is essential to think about which tech will survive the next 10 years? Which will not?
I was glad to be a part of the 2nd Annual Digital Convergence Conference last week in NYC, where leaders from the industry shared their perspectives on digital transformation. Many of the speakers represented organizations implementing digital programs. Of the many valuable insights, one stands out for me:
The role of the supplier has never been as critical as it is today.
As I pointed out in an earlier post, traditional point-in-time supplier risk assessments are insufficient for the digital world.
In the digital era, your success substantially depends on your IT advantage. And, your IT advantage will continue becoming more dependent on your suppliers’ ability to innovate and respond with agility.
So, what should you be concerned about?
- Is the supplier equipped to understand your business and support your transformation?
- As an important spoke in your wheel, is your supplier investing adequately in new capabilities?
- Does your supplier take cybersecurity seriously?
- Is your supplier adopting a Design Thinking approach to address not just your needs, but also your customers’ needs?
More importantly, how is your supplier responding to new risk vectors?
In a world of tightening regulations for data security and privacy, your business is only as compliant and secure as your weakest link in the Sourcing Chain. As enterprises explore new ways to be more productive – breaking down silos, bridging gaps, and collaborating better is more important than ever. All risks along the sourcing chain are your risks too.
A cost effective and operationally efficient solution is proactive and continuous supplier risk monitoring.
Episodic Risk Assessments and periodic audits do not provide up to date data on how third parties address and respond to all risk vectors. As you pursue third party enabled digital transformation, real time, continuous monitoring of your critical Supplier ecosystem is crucial to third party relationship governance.
Supply Wisdom is already equipping many enterprises with continuous supplier risk monitoring to enhance and generate better value from their third party relationships.
What do you think? Please share your comments with me, whichever side of the table you are on.
This post was originally published on LinkedIn.