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More than half of enterprises host critical enterprise applications in the cloud and more than three-fourths (76%) believe artificial intelligence will be an important part of their supply chain in the next three years.

That are just two of the findings from the most recent annual report published by Loftware, a software company specializing in enterprise labeling and artwork management solutions.

As companies plan for 2024 and beyond, the combination of geopolitical uncertainties, climate instability, and the threat of recession continues to impact companies of all sizes. Organizations are grappling with disruptions that extend far beyond the traditional scopes, requiring a strategic recalibration to weather the storm and emerge stronger in the face of adversity, said Josh Roffman, EVP of Marketing at Loftware. With this in mind, a commitment to bolstering digital transformation strategies through investment in innovative technologies will be critical to streamline operations, drive growth, and increase profitability.

The global survey, which draws on insights from over 300 labeling, packaging, and supply chain professionals across industries in 55 countries, found that investing in cutting-edge technologies such as cloud computing, AI, and IoT solutions is no longer a tactical necessity but an enabler for business growth and agile supply chain operations.

Loftware said this shift is taking place as companies react to continued supply chain disruptions and heightened consumer expectations.

Gartner has said that global end-user spending on public cloud services is forecast to grow 20.4% to a total of $678.8 billion in 2024.

Sustainability also showed up in the report, with 78% of those surveyed saying they have already adopted sustainability initiatives across their organizations and 77% believing stricter regulations and compliance requirements are pushing businesses to adopt sustainability practices.

Cybersecurity threats increase

But, with more data being placed in the cloud, the risk of cyber breeches increases. Another survey highlighted the growing importance of cybersecurity in a supply chain world that is increasingly interconnected. As companies seek more visibility downstream, there are more systems becoming connected digitally, meaning one company could be connected to tens of thousands of systems from smaller, less equipped companies.

Nearly half (46%) of all cyber breaches impact businesses with fewer than 1,000 employees, according to StrongDM, which manages infrastructure for possible vulnerabilities. The firm added that 61% of small and midsized businesses were the target of a cyberattack in 2021.

When it comes to other types of attacks, such as ransomware attacks, SMBs are prime targets. More than 80% of such attacks were against companies with fewer than 1,000 employees, and of those with fewer than 100 employees, 37% were victimized in 2021.

Why are these numbers relevant to the supply chain? Because, simply put, supply chain businesses are not immune, and with 98% of businesses employing fewer than 500 employees, they are increasingly the target of thieves.

A Gartner survey found that 60% of supply chain organizations plan to use cybersecurity risk as a significant determinant in conducting third-party transactions and business engagements by 2025.

This means chief supply chain officers (CSCOs) need to be on top of the latest threats in a quickly changing environment.

Our survey data has shown an aggressive stance among CSCOs who are looking to invest in growth through multiple new technologies, said Brian Schultz, senior director analyst in Gartners Supply Chain Practice. However, each new technology introduces new partners, vendors and service providers into the digital supply chain. The implication for cybersecurity risk is an ever-growing number of new pathways to potential attacks from malicious parties.

A digitized supply chain adds new challenges

As the supply chain becomes more digitized, vulnerabilities are presenting new challenges. With thieves more likely to target small businesses without sophisticated cyber security protocols in place, the challenges are amplified for these businesses.

According to Schultz, CSCOs will need to revamp their third-party risk assessments of outside partners as part of a larger cybersecurity program with clear standards developed in collaboration with risk owners across the C-Suite, including the CIO, CISO and internal audit. The standards in the plan should specifically address:

Up-to-date third-party cybersecurity standards

Mechanisms for enforcement of these standards in contractual language via executed and amended contracts

The development of an audit program to enforce the supply chain cybersecurity plan

A supply chain cybersecurity program will play a significant role in future buying decisions and third-party risk mitigation, said Schultz. In addition, regular audit data from a supply chain cybersecurity program can serve as key performance indicators that can be reported to the board, auditors and business partners.

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52% of Enterprises Have Moved to the Cloud - Supply Chain Management Review