Complex Interdependency of IT Security Risk in B2B Supply Chain

Abstract

Managers often decide to integrate supply chains of collaborating firms. Whether such decisions are for competitive posture, cost saving or operational efficiencies, it is important to understand that supply chains integrate not only the flow of goods but also the information processes and assets and more often than not, the IT networks of the firms. Thus two developments occur. First, IT security losses of one firm collocate at the other firm's servers as information assets like demand forecasts are shared. Second, the Intranets of both firms get connected with the help of VPN or similar technologies, making it possible that a breach can travel from one firm to the other. This in turn makes IT security risks of SC firms strategically interdependent. This chapter analyzes such interdependent IT security risks and provides insights for SC and IT managers who are poised to collaborate with other downstream or upstream partner firms.