Kiteworks, a leading provider of data privacy and compliance solutions, recently released its 2025 Data Security and Compliance Risk: Annual Survey Report, revealing that most organizations lack the visibility needed to manage risks across their vendor ecosystems — potentially putting supply chains at critical financial, operational, and compliance risk.
“The complexity of modern supply chains has outgrown manual oversight,” said Tim Freestone, Chief Marketing Officer, Kiteworks. “Procurement and supply chain leaders must recognize that every vendor relationship is also a data relationship. Without clear visibility, organizations are effectively flying blind — and paying the price.”
The report highlights that nearly half of organizations cannot accurately track their third-party vendors, creating a cascade of risks. Companies managing 1,001–5,000 vendor relationships — the so-called “danger zone” — are particularly vulnerable, with 24 percent experiencing seven or more breaches annually, and 26 percent facing $3–5 million in potential litigation costs. This range represents a gap where manual oversight fails but enterprise automation has not yet been implemented.
Additional findings include:
- A lack of visibility into vendor counts and AI usage can lead to untracked compliance hours, increasing operational risk.
- For every $1 spent on visible compliance, organizations incur $2.33 in hidden costs from audit inefficiencies, wasted staff time, and delayed operational improvements.
- 17 percent of organizations have AI governance frameworks, yet AI tools increasingly flow through vendor networks, exposing intellectual property, privacy and regulatory vulnerabilities.
- Five foundational measures can dramatically reduce risk: 1) accurate vendor counts, 2) percentage of AI-generated content, 3) documented breach history, 4) compliance time investment, 5) detection speed monitoring.
- Kiteworks’ 1–10 risk algorithm synthesizes vendor-related breach frequency, detection speed, and financial impact, helping supply chain executives to quantify risk and prioritize interventions.
The complete Kiteworks 2025 Data Security and Compliance Risk: Annual Survey Report is available here.
