Monitoring and Managing Technological Risks
Year after year, new technologies revolutionize how we do business, offering incredible benefits to organizations, but reliance on technology also increases risk exposure.
When technology fails, the business disruption can result in revenue loss and damaged consumer confidence. Whether a customer’s data is stolen, electrical outages at an overseas plant occurs or there is simply a lack of technology in an emerging nation where you operate, technological risks can be incredibly damaging.
Without an effective technology risk management strategy, your organization’s profitability and your reputation could be impacted.
The Many Types of Technology Risk
Before determining how to manage technology risk, you must understand the many types of technology risks that organizations and their supply chains face. Unfortunately, at least one of these situations is likely to happen to your organization or your supply chain at some point in the future. In order to protect your business from reputational, financial, regulatory and strategic risk, you must prepare with effective technological risk management.
There are many types of internet-related technology risks. As our technologies advance, hacks become even more sophisticated and, therefore, there are even greater risks for these technology disruptions. Cyber-attacks, DoS attacks, security breaches, password theft, information security incidents are all technological risks threatening your organization. When it comes to these types of technology risk, those hacking the system and accessing sensitive information can be either outsiders or insiders—staff within your own organization or in your supply chain.
You and your supply chains may also face technology outages. Whether service is not being successfully delivered to customers or an entire factory cannot function correctly, an outage can be damaging to your organization. When operations are in emerging nations, for example, technology like electricity¬¬—or other infrastructure-related issues—can be less reliable, and outages can disrupt the supply chain.
Automation poses another technological risk. While automation can be incredibly helpful for companies, it can also lead to job losses—and therefore, negative publicity. Not to mention that when automation breaks down, the supply chain suffers.
Each type of technology risk has the potential to cause financial, reputational, regulatory and/or strategic risk. It is essential to have an effective technology risk management strategy in place to anticipate a potential problem before it happens.
One of the More Damaging Technological Risk Examples
In a recent data breach involving Equifax, a credit reporting agency, private information of as many as 143 million people was stolen. The impact was not only significant in numbers, but significant as far as the value of the information goes. Names, addresses, social security numbers and birth dates were accessed by the hackers. And worse, it took Equifax 6 weeks to notify customers.
Weeks following, the CEO of Equifax stepped down from his position. Dozens of lawsuits were filed against Equifax. Because the company failed to secure the sensitive data of its customers, it now faces not only the financial damage from the lawsuits, but also incredible reputational damage that will be hard to recover from.
How to Manage Technology Risk
Businesses must effectively monitor and manage technological risks within their organization and supply chains, as these technology disruptions can lead to costly and damaging consequences. For full visibility of your supply chain and to mitigate technology risks, use LexisNexis Entity Insight—a fast, efficient and cost-effective solution for proactively monitoring local and global suppliers and third-party business partners.
The solution applies the PESTLE analysis framework (Political, Economic, Socio-cultural, Technological, Legal and Environmental) and leverages a wide range of market intelligence unavailable on the open Web, empowering you to anticipate and manage technological risk more effectively.