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A soon-to-be-released study indicates that supply chain interruptions and impediments remain among the top concerns for U.S. technology companies.
In an annual report expected to be released next week by Chicago-based accounting and consulting firm BDO USA L.L.P., 88% of tech companies studied cited concerns about the reliability of suppliers, providers, distribution of products and services, and the global supply chain.
It was the third straight year that the percentage of companies citing supply chain concerns increased, up from 86% in 2011 and 75% in 2010.
“That risk has always been there,” said Aftab Jamil, a partner and national leader of the technology and life sciences practices at BDO USA. “The last seven or eight years now, we've all seen how the trend of offshoring has been very widespread.”
As part of that trend, technology companies have looked to make their supply chains as efficient as possible, he said.
“Now the flip side of that: If there are any disruptions at all, anywhere in that length, that causes significant business issues,” Mr. Jamil said. Disruptions resulting from events such as last year's Japan earthquake and tsunami and the floods in Thailand “highlight this (risk) not only from a disclosure standpoint but also from a continuity and business risk standpoint.”
The “2012 BDO RiskFactor Report for Technology Businesses” is based on analysis of the most recent 10-K filings of the 100 largest publicly traded technology companies in the United States.
Among the other risks cited by the companies studied, 88% expressed concerns about natural disasters, war, conflicts and terrorist attacks, up from 81% in the 2011 study.
The percentage of tech companies identifying data breaches as significant risks increased dramatically in this year's study, rising to 71% from 25% in 2011. Factors such as the growth in available data, the amount of data available on portable devices, the rise of cloud computing and numerous high-profile data breaches have increased tech companies' concerns about the risk, Mr. Jamil said.
“We think it will remain very high and probably go even higher,” he said. “Not only here, but in other markets of the world as well.”
The BDO USA report is expected to be released next week and will be available on the firm's website at www.bdo.com.