Tech companies have to prepare for complex global challenges

Evolving Global Risks Bring Complexity to Tech Companies

From severe weather, tariffs and geopolitical risks to "once in a lifetime events" like a pandemic, tech companies have to prepare for complex challenges.
Technology companies today operate on a global scale like no other time in history. Borders no longer constrain commerce and organizations increasingly must deal with external forces across the footprint of their supply chain, digital networks, distribution channels, and consumer markets.
Traditional disruptions – severe weather, tariffs, geopolitical risk – are expected and planned for. The ‘once in a lifetime’ events, like a global pandemic that ground the world economy to a halt, add an entirely new dimension to supply chain management moving forward.
Black swan events can’t be predicted. But companies can control how prepared they are to face them.

Setting Businesses Apart

Seventy-nine percent of organizations with superior supply chain capabilities achieve revenue growth that is significantly above average, according to Deloitte. Only eight percent of businesses with lower performing supply chains have above average revenue growth.1
It’s crystal clear: a well-functioning supply chain sets a business apart. Unsurprisingly, technology companies are leading the way when it comes to innovation, and they’ve played a part in turning the traditional supply chain model on its head. The nature of a supply chain for technology companies can be unique and incorporate not just physical aspects but data, intellectual property and extensive reliance on connectivity and the cloud.
To drive efficiency and anticipate issues, technology companies collaborate with their suppliers real-time in a network-based model. Within the network, suppliers are the nodes that receive and send information such as plans and production schedules on an ongoing basis.2
The network effect has increased efficiency across the world. And while it’s a net positive for the global economy, the proliferation of ‘network nodes’ has created a unique situation for individual companies: nearly all now have global reach, whether they intended to or not. With that reach comes a litany of property and liability considerations.

Growing Complexity of Supply Chains

With the advent of the assembly line in the early 1900s, supply chains have steadily grown for more than a century. Today, the growth and complexity comes from a variety of sources, chief among them:
  • Customer Demands and Delivery: First and foremost, companies need to meet the demands of their customers in a timely manner. Customers not only want product and service choices, they also want options for how the product is delivered.3
  • Cultural Differences: For products sold around the world, companies need to address cultural differences and make modifications based on their target markets.3
  • Globalized supply chain: Companies need to consider a number of other issues such as local legal and regulatory requirements.3
  • Supply Chain Management: Companies must make sure their suppliers can meet their quality standards. Some companies may have their specialized suppliers deploy customized processes. This could lead to a less responsive supply chain and limited options.3

Evolving Threats to Global Businesses

Supply chain disruptions due to climate change, tariffs, and geopolitical risk are on the rise:
  • Climate Change/Weather Threats: Keeping a manufacturing plant operating at full capacity requires a dependable flow of materials. Wildfires, tsunamis, and other events can damage infrastructure, resulting in delays of components and product.
  • Shifting Landscape of Tariffs: Trade deals could force a company to quickly change the countries used for suppliers, partners and customers.
  • Geopolitical Risk: Changes in government can result in new policies that implement updated insurance laws, change intellectual property rights, or alter deliveries.
Evolving laws around unauthorized data use, privacy security, and intellectual property are creating new challenges for businesses as well.
As populations, travel and trade increase, the risk of infectious disease events do too. In fact, the number of epidemics has continued to rise over the last 30 years.4

Mitigating Supply Chain Risks

While the majority of the risks are unavoidable, there are a number of things companies can to do to mitigate the impact of the supply chain risks. For example, companies should:
  • Develop a supply chain continuity plan
  • Map out their supply chain process
  • Determine the location of suppliers
  • Identify sole-source suppliers
  • Identify alternate suppliers to prevent bottlenecks

Seguro global

“American technology companies are under increasing scrutiny,” said Andrew Zarkowsky, Technology Industry Practice Lead. “It’s now more important than ever for these businesses to be good corporate citizens and maintain a favorable reputation.”
Global insurance protects U.S. businesses that have multinational locations or operate throughout the world. With each new country where a business establishes operations, there are new challenges to overcome – an insurance claim has the potential to turn into a maze of red tape due to local laws, language barriers, and customs that differ from country to country.
“A global insurance policy helps protect a company’s operations throughout the world by providing coverage for a variety of risks such as property damage, bodily injury, or cyber and data breach,” Zarkowsky said.

Addressing Local Requirements

A decade ago, a single master policy might have been sufficient for a U.S. business to be insured in most international locations, but those days are over. Today, regulators are requiring locally admitted providers, increased policy limits and broad coverage terms that allow claims service to be delivered through a local policy contact.

An Efficient, Effective, Borderless Solution

The Hartford provides locally licensed and admitted coverage in over 200 countries with a single point of contact in the U.S. It is borderless insurance – delivering one coordinated insurance program for every risk we cover.
“Technology companies are significant drivers of the global economy whose operations often contain complex risks spanning the globe,” said Alfred Bergbauer, Head of Multinational.
“Whether it be interconnected supply chains with goods in transit or sales with the potential to create product and professional liabilities in virtually every country, technology companies face a myriad of risk management challenges,” he continued. “The complexity of these risks requires a risk management partner, like The Hartford, who will invest the time to understand the unique nature of a company’s products and operations, including how and where property and human assets might be exposed, how supply chains are protected and how a company’s products might expose the company’s balance sheet to meaningful loss.”
Para más información, visite
1 Supply Chain Leadership
2 How High Tech Is Leading The Way In Supply Chain Transformation
3 Main Sources of Supply Chain Complexity
4 World Economic Forum, “Outbreak Readiness and Business Impact: Protecting the Lives and Livelihoods across the Global Economy”
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The Hartford Staff
The Hartford Staff
Our editorial team spans writers, researchers, product specialists and subject matter experts. We cover the intersection where best practices and business insights meet.