Half of businesses do not assess IT supply chain viability

07 February 2023 Consultancy.uk 4 min. read
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Business leaders have once again been issued with a wake-up call regarding their IT supply chain. A new study suggests that most firms have too much confidence in their mission-critical IT contractors, with half of leaders admitting that while it could lead to outages, they are not routinely assessing their suppliers.

At the start of 2023, researchers found that organisations were too trusting of Managed Service Providers (MSPs). Despite 20% of companies hit by cyber-attacked in the last year saying attacks had come through MSPs, just four-in-ten believed they need to make sure MSPs were certified in providing cyber security essentials, while only one-third agreed personnel of providers should undergo security checks before taking on such work.

Now, a new survey from Coeus Consulting – a Wavestone company – has revealed that companies are also complacent when it comes to the viability of their mission-critical IT suppliers. A mission critical system is a system that is essential to the survival of a business or organisation – so when one fails or is interrupted, business operations are significantly impacted. As such, it is alarming that only 53% of IT leaders are regularly assessing the viability of the companies supplying that infrastructure.

What would the impact of these potential business disruptors be on your organisation’s IT supply chain, and consequently, business operations if they occurred?

“Many business-critical IT services are provided to large organisations by complex and geographically-dispersed IT supply chains. A failure in just one part can have catastrophic consequences for the organisation’s ability to operate,” said Ben Barry, Director, Coeus Consulting.

To minimise the impact of future business disruptions, 89% think it’s extremely or fairly important that IT leadership should focus on IT’s role within business disruption planning. But in detail, only 48% of IT leaders routinely assess for End -to-end supply chain integration, 49% for contractual liability, 53% for financial stability, 58% for operational resilience and 60% for performance.

The poll of 240 IT leaders of large organisations predominantly in the UK and Germany also saw Coeus find that, despite widespread expectation of IT supplier failure, it was also rare that companies were looking to invest in preventing the worst possible disruptions. A 61% chunk said skills availability in their mission critical IT supply chain was their top concern, alongside 64% who identified excessive cost increases.

What would the impact of these potential business disruptors be on your organisation’s IT supply chain, and consequently, business operations if they occurred?

While those were supposedly top concerns, though, investment priorities seem to be elsewhere. A 47% minority of respondents said they were intending to invest in the skills resource ecosystem of their IT supply chain to minimise disruption. Meanwhile, only 42% were exploring ways of training and developing their ecosystem as it currently stands. This may be because many firms are wary of the cost of talent, amid an economic downturn.

A 53% majority said that talent costs would have a high impact on their organisation’s IT supply chain in 2023. The cost of outages of mission critical IT may cost firms far more in the long-run, though, making this a risky approach to resourcing in the coming months.

“With IT leaders now central to business success, there’s a real opportunity for them to grasp the company-wide responsibility of ensuring the business can withstand disruptions. For those willing to seize the initiative, the door is open to move beyond their usual spheres of influence and position themselves for the ‘top job’,” concluded John Gorrell, Associate Director, Coeus Consulting.