Supply Chain Security Why Supply Chains Need More Cybersecurity

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The greatest risks for cyberattacks often lurk where they are least expected: within the supply chain. Therefore, transparency over all identities and access rights is crucial. AI-supported solutions can help manage the growing threats.

Cyberattacks are no longer an exception and have become part of everyday life for German companies. However, the greatest danger often lies where it is least expected: in the supply chain. Many organizations underestimate the risks of a lack of transparency, inadvertently providing attackers with access to sensitive data and systems. The Federal Office for Information Security (BSI) continues to classify the threat level for German companies as "high." The number of reported IT security incidents is increasing, and attackers are becoming increasingly professional. The BSI assumes that this trend will continue.

Without a comprehensive concept for identity security that covers all identities – from employees to third-party providers to machines and AI agents – severe consequences are at risk. Protection against cyberattacks must therefore be a top priority. What is crucial is consistent control over who is allowed to access which resources, regardless of where the identity is located within the supply chain.

A Complex Network of Identities

In the discussion around cybersecurity, companies often focus exclusively on their own full-time and part-time employees. However, modern supply chains have long involved freelancers, external service providers, temporary workers, as well as employees of partner companies and suppliers. These groups are often overlooked and represent potential entry points for cyberattacks. Companies must therefore consistently include all individuals with access to their systems or data in their security strategy, regardless of their employment status or employer.

This is not only about human identities. Due to AI and automation, the number of machine identities is rapidly increasing, such as through software bots or robotic process automation. According to a study by Sailpoint, nearly seven out of ten companies (69 percent) now manage more machine identities than human identities. 57 percent of companies admit that machine identities have already been granted unauthorized access to sensitive data.

But without clearly regulated access, neither the company itself nor the supply chain can be effectively protected. The question is: Who is allowed to access which data, when, why, and for how long?

Excessive Access: An Underestimated Danger

The more complex identity structures become, the harder it gets for companies to manage and protect access to applications and data. The significant increase in unstructured data, such as spreadsheets, emails, and multimedia files, further complicates oversight. The result is excessive access permissions, which in turn create vulnerabilities and make it easier for cybercriminals to infiltrate the corporate structure.

According to the study results, around four out of five companies have already experienced security issues due to improper access. The rapid increase in digital identities and data volumes has led many companies to prioritize simple and fast access processes. This often comes at the expense of IT security. The result is an oversupply of identities, allowing attackers to move unnoticed through networks and gain access to a wide range of data.

Supply Chains as a Gateway

Attacks on companies repeatedly demonstrate how cybercriminals specifically exploit vulnerabilities in the supply chain to gain access to sensitive data and systems. They often succeed in infiltrating IT infrastructure via compromised third-party providers or deployed software. This not only endangers the affected company but also its partners and customers. The impacts of such attacks are far-reaching, ranging from data loss and operational disruptions to significant economic damage and loss of trust among business partners.

Visibility is therefore key to protecting against such threats. Without a comprehensive overview of all identities and access rights within the supply chain, suspicious activities often cannot be detected in time. Studies show that security breaches are often only discovered after months – a period during which attackers can operate undisturbed. It is all the more important for security teams to rely on a multi-layered arsenal of tools and tactics and to equip identities with only the access rights that are absolutely necessary.

AI and Automation as Game-Changers

In today's digital era, tools that leverage AI and machine learning are indispensable. Traditional manual processes are no longer sufficient to address the growing cyber threats given the multitude of identities. AI-powered solutions enable real-time analysis of large datasets and the detection of patterns indicating potential threats. Automating access permission allocation ensures that employees and external parties only have access to the resources they truly need.

The benefits of this approach speak for themselves: 83 percent of companies report that their investments in security solutions in 2023 have led to fewer identity-related security incidents.

Human and Technology: The Dream Team for Greater Security

Identity security requires close and continuous collaboration between HR, IT, and specialized departments, particularly during onboarding and offboarding. This applies not only to internal employees but also to external forces such as service providers, contractors, or temporary partners. While HR processes map the lifecycle of internal employees, IT must ensure that every identity – regardless of employment status – is granted only the minimal necessary access rights (“Least Privilege” principle).

Automated processes are essential in this regard: they help systematically assign roles and access rights, regularly review them, and revoke them in a timely manner upon departure or project completion. The assessment of third-party cybersecurity practices should also be automated and risk-based – ideally integrated into a comprehensive Identity Governance & Administration (IGA) system.

Regulatory requirements such as ISO/IEC 27001 or NIS2 increasingly demand transparent and controlled management of identities, both within the company and along the supply chain. A robust identity security strategy thus becomes not only a prerequisite for cyber resilience but also for meeting legal requirements.

*Klaus Hild is Manager Solution Engineering Enterprise at Sailpoint. He is responsible for the entire DACH region.