Business Risk

Supply Chain Graphic of the Week: Where Do Executives See the Top Business Risks?

All Eight Risk Categories Surveyed by Hackett Group have Direct Connections to the Supply Chain

April 13, 2017
SCDigest Editorial Staff
SCDigest will note that the Hackett Group consistently produces interesting research, generally related to procurement and financial management.

That was true again with a recent report on procurement’s role in corporate digital transformation, a good topic given all the current attention to digitization – and we would say still with a lack of clarity about what digitization really means.

From that report, authored by senior research director Patrick Connaughton and global procurement advisory practice leader Chris Sawchuk, included the graphic below, which summarizes how corporate executives rate current and future business risks.

The leading current (2017) and expected future business risk relates to cyber security, cited by 47% and a whopping 67%, respectively, as a top concern.

The top four perceived risk areas, as shaded in the gray, are all connected to digitization, Hackett says, commenting that “Cybersecurity is an explicitly digital business risk, but intensified competition and disruptive innovation are also both driven by digital transformation. Critical talent gaps largely involve digital-related skills, as well. These risks currently exceed traditional ones such as weakness in demand and volatility in the regulatory and exchange-rate environment.

SCDigest would note that all eight of the risk categies evaluated by Hackett have pretty strong connection to the supply chain:

Cyber Security: Lot of supply chain data out there, inceasingly in the Cloud

Intensified Competition: Supply chain is a huge factor in competitiveness

Disruptive Innovation: Supply chain needs to both innovate on its own and support the company’s product/service innovation

Access to Talent: Supply chains are struggling to find/retain talent, and needing to hire new types of roles, such as data scientists

Regional Demand Weakness: Getting forecasting and inventory deployment wrong can be costly, while agility can reduce the risk

Regulatory Risk: Supply chain at the heart of that for physical product companies

IP Risk: Suppliers, especially offshore, are a major source of IP risk

Exchange Rates Volatility: Needs to be better considered in many sourcing decisions

It’s an increasingly risky business and supply chain world, that’s for sure.

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