Supply chain security risks grow for outsourced IT users

Businesses face increasing systemic risks due to their heavy reliance on outsourced IT service providers (OSPs), including cloud hosts, software platforms, and managed service providers. A cyber breach or outage at a single provider can trigger a 'single point of failure' event, leading to simultaneous losses across numerous client businesses, affecting revenue, cash flow, and business continuity.

Traditional vendor risk management, such as annual questionnaires, is often insufficient because it only provides a snapshot in time. Suppliers can undergo significant changes—such as infrastructure migrations, data breaches, or new vulnerabilities—long before the next assessment. Experts suggest moving toward continuous vendor monitoring and external asset discovery to maintain oversight of a supplier’s technology footprint.

In regions like South Africa, these risks are compounded by regulatory requirements like the Protection of Personal Information Act (POPIA). Even if a breach occurs at a third-party operator, the primary organization may still hold the legal responsibility for customer notification, remediation, and managing reputational damage.