Difficulties related to supply chains is costing 38% of organizations at least $500,000 a year, according to research by Cleo. Pictured: A woman takes a jug of milk off of depleted refrigerated shelves at a Giant Food Supermarket Jan. 12, 2022, in Springfield, Va. (Photo by Alex Wong/Getty Images)

Research released by cloud-based integration platform Cleo on Tuesday found that while 85% of companies said they are losing money to integration issues related to their supply chains, some 24% are losing $500,000 or more — and another 14% said they are losing over $1 million per year.

According to the researchers, these numbers are up from just 10% each of the prior two years, reflecting a 40% year-over-year uptick. 

The reason for such losses? Cleo’s researchers said it largely comes from outdated integration systems that are not cloud-based, and poor business-process integration with their ecosystems. Because of a lack of end-to-end business process visibility, about half (49%) of all businesses don’t really know what’s happening at key integration points across their business transactions.

In 2021, 45% of integration experts surveyed said it took between one week and one month to onboard a new supply chain partner, up from 37% the year before. The root causes for these delays are not with poor partner performance, said the researchers, but internally with the companies themselves, where outdated legacy or homegrown applications not born in the cloud, over-reliance on manual processes, or too much custom code are hindering partner onboarding for more than 50% of businesses. 

It's worrying that 50% of organizations are electing to mitigate supply chain issues by adding more complexity to their supply chain, said Casey Ellis, founder and CTO at Bugcrowd.

“Process and delivery complexity is a challenge every organization has, but troubleshooting a broken machine first involves stopping and inspecting — not adding additional variables to make a larger broken machine,” Ellis said.

Gadi Naveh, a cyber data scientist at Canonic Security, said the opportunity of integrating a business’s service and visibility to the supply chain can help with better service to customers. However, with such integrations, the company may expose its infrastructure to the risks faced by the supply chain.

“Organizations need to consider how to manage the risks of that exposure along with enabling the business needs, especially in such times where your supply chain can be targeted just because of its national affiliation by opposing states,” Naveh said.