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Critical Questions in the Wake of the Executive Order to Secure the ICT Supply Chain

In an effort to secure the digital supply chain for the United States, President Trump issued an executive order on May 15 prohibiting the trade of information and communications technology or services designed, developed, manufactured or supplied by “foreign adversaries.” The Executive Order on Securing the Information and Communications Technology and Services Supply Chain states that the risk of using such technology and services constitutes a national emergency. Based on discussions with government leaders – such as the Attorney General, the secretaries of Treasury, State, Defense and Homeland Security, the U.S. Trade Representative, the Director of National Intelligence, and others – the Secretary of Commerce will determine which supply chain transactions pose a threat to the United States.

Photo courtesy: White House

Photo courtesy: White House

The impact of this executive order – not only on technology companies – is potentially huge. The butterfly effect in our global economy of these imminent supply chain shifts can not only create significant impact felt by consumers, but it places business leaders in the driver’s seat to navigate some highly perilous terrain. Which begs the question: In light of this executive order, what minefields should these business leaders watch out for?

Contingency planning is key

This executive order is one of many market-influencing developments for which any business relying on a supply chain must prepare. But how do you plan for resiliency in the face of unknown geo-political developments, regulations and policies? As they should for any contingency, business leaders can take initial steps by:

  • Identifying their main sources of revenue
  • Understanding the perceived or real threats to those revenue sources
  • Identify the levers – the factors within their control – that can ameliorate negative impacts

You’re likely thinking, “that’s easier said than done.” Well, I recently read an article about the impact of rising tariffs on farmers. One impacted farmer decided to switch careers to driving trucks because he saw it as a more stable opportunity to support his family. In many ways, it’s much more difficult to pivot a business than a single career, but failing to take action in the face of a market change is a recipe for disaster.

The fundamental Questions

Business leaders must first arm themselves with solid data about their own business ecosystems. That starts with some crucial, fundamental questions. For example, which partners are the real lynchpins to delivering that business’ products and services? And can this sourcing be diversified across the business’ ecosystem to mitigate risk? Understanding the dynamics between internal applications and systems – in addition to external partners, suppliers and customers – will help ensure uninterrupted revenue streams.

In the face of this new executive order, as it relates to technology, the question is: will companies in the United States be able to dynamically transform their supply chain, and even find new and innovative ways of meeting their hardware needs? Will they take the opportunity to finally develop software or virtualize versions of the hardware – and perhaps embark on an entirely new business model? Time will tell.

The lesson in all of this: These are the types of questions every company that relies on – or is attempting to do – business outside of the United States should be asking themselves. To put it simply, can their business be as agile as a farmer-turned-trucker?

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