A successful third party risk management program is essential for safeguarding your company’s reputation, profitability and regulatory compliance. Unfortunately, organizations often struggle to effectively manage these relationships without the right tools.
Modern businesses frequently collaborate with hundreds — sometimes thousands — of vendors, suppliers, service providers, contractors and other partners in order to reach their strategic objectives and satisfy customer demands.
1. Automate the Assessment Process
Building a technology strategy to manage third party risks is essential for organizations that must collaborate with vendors, suppliers or partners. From internet access and office supplies to electricity and everything in between, most organizations rely on multiple third parties for essential operations. Many of these relationships are so intricate that they require specialized knowledge to assess and maintain.
Automating the assessment process enables you to scale your program and guarantee that third parties adhere to your security policies, risk appetite and regulations. It also gives you the tools to reevaluate vendors at any time and update their risk profiles accordingly.
The initial step to automating your third party risk management program is creating an accurate inventory of all vendors within your environment. This inventory should be tailored according to specific company needs and kept regularly up to date.
Once you have an exhaustive inventory of your vendors, it is time to develop questionnaires that will assess them. These could range from basic health and safety questions up to complex information security assessments. Advanced vendor management systems enable you to tailor these questions according to each individual vendor being assessed so that the right size questions are asked.
You can then set up workflow rules that automatically launch a questionnaire to specific vendors when certain criteria are met. For instance, you could require an information security assessment be sent to every vendor handling sensitive data or launch a business continuity assessment when the vendor’s stability is deemed critical.
Alternatively, you can utilize a dynamic scoring solution that utilizes different types of information to generate a risk score for each third party. This may include internal characteristics and publicly accessible details as well as their level of access to your environment.
Once identified, you can quickly and accurately pinpoint any cyber gaps in your supplier’s security posture and then work directly with them to address them. This engagement can take place on the same platform as the assessment, eliminating much friction from the process.
2. Collaborate with Your Vendors
Third parties are often a major headache for companies, as they frequently have access to sensitive data and support crucial business operations. Not only that, but third parties also pose risks such as regulatory fines, financial loss, reputation damage and lost opportunities.
The good news is that creating a technology strategy can help manage third party risks. By automating the assessment process, integrating with your current systems and managing vendors centrally, you can create an effective program to safeguard both data security and operations.
Establishing good working relationships with your vendors can offer numerous advantages, such as reliable products, price flexibility and tailored customer service. By encouraging a culture of collaboration and teamwork in the workplace, you can guarantee that both parties benefit from this relationship.
To foster a long-lasting partnership, be sure to assess potential partners and vendors based on their long-term objectives and vision. Search for vendors who share your company’s growth potential as well as those offering various pricing options and flexible contracts.
Once you’ve identified your ideal partners, be sure to perform regular risk assessments on them. This helps determine the level of threat they pose and guarantees your contract requirements are fulfilled.
This can be achieved through a comprehensive due diligence process that assesses compliance with regulations, cybersecurity risks and financial risk. Furthermore, it helps you create policies tailored specifically for each vendor in order to minimize the likelihood of any issues arising.
As part of your due diligence process, you should take into account factors like the type of data shared with your vendor, its location and security measures. Doing this can help you prioritize which suppliers to work with and which ones to avoid based on potential risks associated with them.
Implementing a robust and comprehensive program for your company will reduce the risks posed by vendors, as well as any negative repercussions it may have on your brand and operations. Furthermore, you’ll be able to prevent costly security breaches, loss of business opportunities, and regulatory fines.
3. Integrate with Your Existing Systems
Building a technology strategy for managing third party risks requires an expansive view of your entire ecosystem, which is why it’s essential to integrate third party risk management processes with existing systems. Doing this can help your organization identify potential threats, mitigate them, and keep systems up-to-date.
Integration is a complex process that necessitates business understanding and technical proficiency, so finding someone experienced enough to bring these elements together is essential. An experienced partner can also assist with executing your strategy and providing support during any obstacles that may arise along the way.
Third party management requires a central repository of vendor information for efficient and effective risk management. This entails creating centralized vendor catalogs as well as using an established, standardized vendor assessment method.
Regulation compliance is particularly critical, as organizations must assess their entire ecosystem against a set of standards. While these requirements can differ by industry, many are based on the types of data you handle and its sensitivity.
No matter your organization’s regulatory obligations, taking a comprehensive approach to vendor risk management is necessary for protecting your reputation, cutting costs and complying with regulations. NAVEX One’s governance, risk and compliance information system (GRCIS) helps you meet these obligations by ensuring that you always know who you are doing business with before, during and after the relationship.
By employing a standard vendor assessment process, your organization can guarantee all vendors are evaluated against the same set of criteria and uphold high security and privacy standards. Not only will this save time and money for your organization; but it also significantly reduces the risk of data breaches or other cybersecurity incidents.
Another advantage of integrating with existing systems is that it simplifies the process for connecting and exchanging data. By employing a hub and spoke integration model, you can connect to multiple third party applications while keeping all your information centralized – making management and troubleshooting much simpler.
In addition to integrating with your systems, you should search for a technology solution that automates assessment and reporting tasks. This will streamline the entire procedure and eliminate manual steps. Automation also helps detect risks as they emerge and create reports aligned with objectives based on vendor data collected.
4. Automate the Reporting Process
Automating the reporting process can save your company time and money by eliminating errors and speeding up production. It also ensures a steady flow of information to key stakeholders. Generating reports manually takes hours or even days; automation allows them to be generated more frequently.
Automated reports can assist in creating visuals that accurately and concisely represent your business’ unique data. Furthermore, it eliminates the need for multiple people to interact with data, freeing employees to focus on more value-added tasks.
No matter if your organization requires daily, weekly or monthly reports, automation can help guarantee they are all generated and distributed promptly. This enables you to address pressing business matters promptly and monitor the progress of your third party risk management program more easily.
Additionally, reports can be distributed only to authorized users, ensuring that only those who need access to this data have access. It reduces programming demands for new reports since fewer will be necessary in order to provide accurate data.
Report automation offers another advantage, as it can be tailored to individual needs and specifications. This enables more in-depth analysis and insights to be provided to decision makers as well as a wider range of stakeholders.
Therefore, businesses may find it beneficial to consider automating their reporting process in 2023. Here are a few things to keep in mind:
When planning reporting frequency for your organization, the first thing to consider is how often they need to receive and analyze reports. Some organizations prefer daily reports for operational data that needs immediate action; on the other hand, some prefer weekly reports for strategic data that requires more time for analysis and drawing conclusions.
Based on your business’ needs, an automated solution can handle the entirety of third party risk management from start to finish. For instance, it should provide you with a dashboard that displays the latest classifications of risks for third parties, their upcoming and past due assessment activities, alerts generated, as well as visual tools like matrices for conducting thorough analyses through visual tools.
