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How Large Companies Can Help Small and Medium-Sized Enterprise (SME) Suppliers Strengthen Cybersecurity

How Large Companies Can Help Small and Medium-Sized Enterprise (SME) Suppliers Strengthen Cybersecurity

Jillian K. Kwong, Keri Pearlson
This study investigates the cybersecurity challenges faced by small and medium-sized enterprise (SME) suppliers and proposes actionable strategies for large companies to help them improve. Based on interviews with executives and cybersecurity experts, the paper identifies key barriers SMEs encounter and outlines five practical actions large firms can take to strengthen their supply chain's cyber resilience.

Problem Large companies increasingly require their smaller suppliers to meet the same stringent cybersecurity standards they do, creating a significant burden for SMEs with limited resources. This gap creates a major security vulnerability, as attackers often target less-secure SMEs as a backdoor to access the networks of larger corporations, posing a substantial third-party risk to entire supply chains.

Outcome - SME suppliers are often unable to meet the security standards of their large partners due to four key barriers: unfriendly regulations, organizational culture clashes, variability in cybersecurity frameworks, and misalignment of business processes.
- Large companies can proactively strengthen their supply chain by providing SMEs with the resources and expertise needed to understand and comply with regulations.
- Creating incentives for meeting security benchmarks is more effective than penalizing suppliers for non-compliance.
- Large firms should develop programs to help SMEs elevate their cybersecurity culture and align security processes with their own.
- Coordinating with other large companies to standardize cybersecurity frameworks and assessment procedures can significantly reduce the compliance burden on SMEs.
Cybersecurity, Supply Chain Management, Third-Party Risk, Small and Medium-Sized Enterprises (SMEs), Cyber Resilience, Vendor Risk Management