Businesses, today, are no longer singular entities that operate in silo; regardless of the size and scale of operations, almost every organisation depends on various third parties to carry out their activities without disruption.
This has also meant that to really benefit from outsourcing or specialisation, procurement teams have had to transfer a significant degree of control and accessibility to these parties.
While this opens up a world of cost-saving opportunities for businesses and is a necessary reality of operating in a globalised world, it also poses plenty of threats. Threats, which can have a serious impact on a company’s finances and reputation.
This is the juncture at which third-party vendor management comes into the picture.
In the new normal, the security landscape is fraught with a variety of risks and challenges. While the solution will never be to retreat from third-party networks and operate in isolation, what’s necessary is that the right steps are taken to secure these in line with the latest risks and trends unfolding.
- Create a robust risk framework
Any great system starts with a powerful strategy, and it’s the same when it comes to vendor risk management.
The correct starting point is identifying the risks and gaps you want to address, the standards you want to comply with, and understanding what needs to change in order to meet your obligations.
Today, there are a variety of standards that apply but not all of them may be relevant. Depending on where your third parties operate, the scope of your operations, and the nature of your risks, you can map out the specific attributes of your TPRM strategy.
In this process, it’s equally important that these obligations are passed down the line. It’s not only important to ensure your procurement team takes ownership of these, but your vendors and external partners as well.
- Eliminate silos in your information sharing process
Despite how sophisticated your TPRM strategy may be, one major roadblock that can hinder your success on this front is a lack of meaningful collaboration within your organisation.
Third-party security is not just an issue for your security teams; it also has a major bearing on the work your procurement and legal departments do. A great way to go about this is to ensure that your vendor data is stored in a centralised location and your teams have a real-time view of it.
It’s also highly advantageous to strategise with relevant teams and departments about the implications of the data collected for your entire organisation. This, in turn, will ensure you take a more holistic approach to third-party vendor management.
- Delegate responsibilities and have clear decision-making frameworks in place
Another recommended practice that can augment the effectiveness of your third-party risk management strategies is a clear delegation of duties with corresponding decision-making frameworks.
This is especially the case when it comes to supplier due diligence. Third parties need to be assigned risk profiles and scores, for example, that guide the next steps you take—a decision that can’t be based on intuition alone.
For this, security teams need to put together risk criteria and a decision matrix that helps them follow standardised steps in the onboarding process. This can be guided based on the impact each risk may have on your operations and data.
- Maintain a real-time view of your risk exposure
In addition to the strategies you put in place and the sophisticated technology you leverage, a real-time view of your posture and exposure is equally crucial.
Today, around 60% of businesses admit they don’t have the resources to monitor the security practices of third parties with whom they share sensitive information .
Point-in-time assessments, while once a mainstay of risk management strategies, can no longer capture the evolving risks businesses face today. What’s necessary, instead, is for security teams to have a real-time understanding of the threats affecting their networks that may be arising out of third-party gaps and vulnerabilities.
Today, this is significantly easier and more cost-effective to do, given the availability of powerful risk rating tools that give organisations greater control over their security monitoring.
Implement third-party vendor management best practices for a more robust security posture
With the security landscape becoming more treacherous by the day, our third-party networks represent a major priority going forward. After all, it remains a key determining factor in the strength of any organisation’s security posture.
By following the latest best practices, it’s much easier to protect your data, networks, and resources from increasingly sophisticated threats—threats we need to be prepared for, both internally and externally.