Final answer:
Five root causes of technological risk in the procurement process are technological dependence, security risks, digital divide, vendor risk, and technological obsolescence.
Step-by-step explanation:
Technological risk in the procurement process can be caused by various factors. Five root causes of technological risk in the procurement process include:
- Technological Dependence: When an organization becomes heavily reliant on a specific technology, any disruption or failure in that technology can significantly impact the procurement process. For example, if a company heavily relies on a specific software system for procurement, any technical glitches or system failures can disrupt the entire process.
- Security Risks: With the increasing use of technology in procurement, there is a higher risk of data breaches, cyber attacks, and loss of privacy. Organizations need to implement robust cybersecurity measures to protect sensitive procurement information.
- Digital Divide: Unequal access to technology can also contribute to technological risk in the procurement process. If some stakeholders or suppliers do not have access to the necessary technology, it can create challenges in communication, collaboration, and data exchange.
- Vendor Risk: The selection and reliance on technology vendors can introduce risk in the procurement process. Issues like vendor bankruptcy, vendor lock-in, or contractual disputes can disrupt the procurement process and create technological risks.
- Technological Obsolescence: Rapid advancements in technology can lead to the obsolescence of existing procurement systems and tools. Organizations need to carefully evaluate and update their technology infrastructure to avoid being left behind by outdated technology.