$4 million, that’s how much a security breach can end up costing your company. Not only patching it up, but all the consequences it brings with it — the aftershocks. A dip in your brand’s reputation, your downtime, and the wallop your stock will take due to the PR nightmare, Federal fines, and legal suits.

There’s a reason why software supply chain risk management and the companies that conduct it are racking in the dough, why it is a multi-billion dollar industry — and that reason is simple, they are a necessary evil. You need them because the alternative, disregarding them, is the equivalent of playing Russian Roulette with a fully loaded firearm.

What is software supply chain risk management?

property management software

Software supply chain risk management is the process of supervising and solving for risks that are present in a software’s lifecycle.

This process can be broken down into three steps:

  • Identify and assess the risks in the software supply chain.
  • Develop a strategy to mitigate these risks.
  • Implement the strategy and monitor for any new or recurring risks.

This process is ongoing and never ends, and requires dynamic responses to changes in the technology supply chain, as well as an analysis of the possibility of new risks. Software supply chain risk management is a critical part of any organization’s IT risk management strategy.

4 key types of risks to be aware of in software supply chain risk management


The software supply chain is complicated and takes into account a rather complex interconnected network of organizations involved in the development, delivery, and support of IT software. As with any complex system, there are many risks associated with the interaction between these entities. These include:

  • Intellectual property risk, where a supplier could use intellectual property without authorization from their customer and receive a financial benefit for this unauthorized use.
  • Financial risk, where organizations that outsource their software development or service provision may not have adequate controls in place.

Different types of security vulnerabilities

Software supply chain risk is a type of security vulnerability that occurs when the software developer does not follow best practices and instead relies heavily on code from third-party providers — including untested open-source codes.

This can lead to all kinds of problems, including the exposure of sensitive data and network intrusion. It can also cause serious financial damage. Security vulnerabilities are a big problem in the current technology landscape. They can be caused by several different factors, such as software bugs, human error, and malicious intent.

Many different types of security vulnerabilities exist in today’s world. The most common type is a software bug, which is created when the code for a software program does not work as intended.

Another common type of security vulnerability is human error, which often occurs when an employee does something they should not have done or does not do something they should have done.

The third type of security vulnerability is malicious intent, which happens when someone deliberately tries to break into a system or network with the intention to cause harm.

Third-party software risks

Third-party software risks are a type of risk that is associated with the use of software that has not been developed in-house. These risks are a result of the lack of control over third-party suppliers and their potential impact on the system or organization.

Many organizations have been able to mitigate these risks by implementing a strict assessment program. This involves identifying, assessing, and mitigating any risks associated with the use of third-party software.

Policy & process risks

Software supply chain risk also occurs when there is a vulnerability in the software provided by the vendor. The customer does not know about this vulnerability because the vendor does not disclose it to them. These types of vulnerabilities occur often and will “eventually” be patched up by the vendor — meanwhile until that update comes down the pipeline, there is a “technological debt” with the consumer. Most responsible vendors disclose the type of vulnerabilities, allowing their clients to take appropriate measures.

Many risks come with this process, one being that if there is a vulnerability in the software, then it will be exploited by hackers and other malicious actors. One of the most notable cases of this was WannaCry in 2017 — a very malicious global ransomware attack that used a crypto worm and targeted computers operating Microsoft Windows.

Customers need to look for vendors who have higher levels of security and transparency so that they can avoid these risks altogether.

Licensing threats

There are two types of licensing threats. One is the risk that a competitor will copy your product or service and sell it. This type of licensing threat can rear its ugly head in the following ways:

-Patent infringement

-Trade dress infringement

-Trademark infringement

The second type is that a business is using a third-party code or an open-source code erroneously, exposing themselves to civil actions by the code maker. Each code you download and install into your codebase has a licensing agreement. Those you create in-house aren’t the issue, those that have been engineered are in such a fashion that the licensing agreement is yours to do with as you please. Those that you bought or downloaded are legal landmines. They demand that your team sticks to its premises and practices, otherwise its coders, creators, or owners can find you liable for damages — for issues of their product.

Letting experts handle your software supply chain and mitigate its many risks


Software supply chains are becoming more complex and interconnected than ever. It is not just a matter of the software being secure, but also the hardware, services, and data that feed into it.

The risks to software supply chain risks vary from business disruptions to cyber-attacks. To combat this, you need experts who are up-to-date with the latest innovations in cybersecurity. These experts can help you identify and mitigate threats by making your software supply chain more resilient.