7 Steps to Effective Vendor Risk Management
Wherever an organization’s vendor risk management program is in its evolution, a key to success is to simplify and streamline the entire process from vendor assessment to vendor risk review to ensure the process efficient and sustainable. This paper presents 7 key Steps that incorporate cross-industry best practices to vendor risk assessment. In this guide, you will learn how to establish a top-tier approach to managing third party risk.
Business dependence on the third party supply chain ecosystem has never been more complex. As client, market, and regulatory pressure relentlessly increases, the risks associated with widespread reliance on third parties compounds. Supply chain risk can come in many forms. Top of mind is cybersecurity, but the pillars of third party risk extend much further. For instance, privacy compliance has quickly become a critical issue. Business resiliency (business continuity and disaster recovery), financial, brand and reputational risks are also important vendor risk evaluation criteria.
Effective vendor management starts with an authoritative list of your vendor relationships. From financial institutions to insurers to law firms, many organizations struggle to identify all vendor relationships across functional groups. Additionally, existing systems may have duplicate vendors, misspelled vendor names, or other data inconsistencies.
Whether your organization has a handful of vendors to assess or thousands in your portfolio, the vendor assessment and risk categorization process can be daunting and time consuming as well. There is a lot of vendor relationship and third party risk data to track.
Many organizations that have a formal vendor risk management (VRM) program in place find keeping up with requests for security reviews to be a constant challenge. Other growing organizations may be building a third party risk management program from scratch and struggling with how to start. In either situation, Risk Management, IT and Security teams have a tendency to be understaffed. Executive management across various industries have reported that solid, properly trained resources are often difficult to acquire and retain, and the amount of work required continues to increase.
The following 7 Steps will help, whatever your third party risk management program’s state of maturity. A successful initiative takes multiple people, so use your internal resources to assist. If you are not sure where to start, contact Privva. We are happy to conduct a vendor risk management program strategy review, have a brainstorming session or answer any questions you may have regarding risk management best practices.