Supply Chain Digitalization and Vulnerability to Cyber Risks

Abstract

The rapidly evolving digitalization of supply chains has transformed traditional procurement processes, thereby enhancing efficiency and collaboration. However, this increased reliance on digital technologies exposes organizations to heightened cyber risks. This conceptual paper qims to explore the double-edged sword of supply chain digitalization (SCD): While SCD, offers significant benefits in efficiency and transparency, it also introduces and increases the vulnerability to cyber risks. Leveraging concepts from Supply Chain Management (SCM), Information Systems (IS), and Cybersecurity, this paper develops a basis to understand how the adoption of key digital technologies—such as the Internet of Things (IoT), Blockchain, Cloud Computing, and Enterprise Resource Planning (ERP) systems—widens the cyber-attack surface. This is particularly critical in a developing country like Nigeria, where challenges like inadequate digital infrastructure, limited cybersecurity skills, and evolving regulatory environment worsen inherent weaknesses. We discuss the potential consequences and suggest a theoretical model for developing cyber-resilient digital supply chains, and providing a groundwork for future empirical research. In addition, we discussed concepts of Technology-Organization-Environment (TOE) framework, combined with elements of organizational Resilience Theory (Sheffi, 2015). The TOE framework suggests that technology adoption is influenced by the technological setting, the organizational readiness, and the environmental pressures. We extend this by arguing that in a high-risk environment (the 'E' factor, which includes the cyber threat environment), the adoption of technology (SCD) must be balanced against the resulting system exposure (Vulnerability to cyber-risks -VCR).