It seems that the potential for a major data breach event has organizations prioritizing third-party risk management across the board. But when it comes to evaluating and managing vendors and the potential threats they may present to the enterprise, the risks reach is far beyond IT-related cyber security challenges.
The importance of the expansion of Third-party Vendor Management (VRM) efforts became painfully clear amid more than a year of supply chain pandemic instability. Between shifting business models and an effort to broaden supply chains, organizations have onboarded new third-party vendors, suppliers and partners and recognized that data security concerns are not the only potential problem.
Companies now more than ever, need to fully vet and apply rigorous due diligence and vendor risk ratings to any third-party entity beyond evaluations of security policies and IT process and procedures. Vendor Risk Management analysis will shed light on the risk a vendor poses to a company, it is critical for management to have access to vendor risk rating reporting data even before any contract is signed and a vendor is onboarded, but throughout the year!
One of the first shortcomings a company can make in their Vendor Risk Management strategy is to lean too heavily on an IT focus. In years past, many organizations have focused their Vendor Risk initiatives on their vendors and their security policies such as SOC 2. While data security and privacy policies are certainly key to a comprehensive risk management program, there are plethora of other factors that affect a vendor risk profile, particularly as companies are taking a more comprehensive Risk Management approach to strategic sourcing.
Companies should develop a comprehensive Risk Management Program, that expands their vendor risk rating beyond internal departments but throughout the Enterprise. There are various departments and individual teams that interact with a third-party vendor throughout the relationship with the company. These various departments include – sourcing and procurement, contract management, legal, compliance, operations, sales, security, etc. These departments may interact with vendors in different ways, but they are only looking at risk from their own, very targeted viewpoint.
This Enterprise-wide approach to Vendor Risk Management involves cross-department collaboration, so the enterprise can take a unified approach to risk assessments and mitigation efforts.
Company’s now need to reevaluate their legacy vendor risk management workflows to adjust the third-party risk assessments and the integration of background due diligence analysis and vendor risk rating into the program.
Historically, a company may have signed a contract with a supplier, sent an assessment questionnaire and measured its vendor risk profile at the beginning of the relationship and never reassessed the vendor risk again.
Today, it is vital for companies to take a more proactive stance with Thid-party Risk and assess a vendor before any contract is executed, but they also need to apply continual monitoring process of vendor risks.
Conducting vendor due diligence vetting during the onboarding process can help identify risks that a new vendor/supplier may pose. Ongoing due diligence vendor risk rating and monitoring provides the detailed information companies need to determine whether to continue a business relationship. Doing business with a high-risk vendor can be extremely detrimental to any companies bottom line, reputation and enforcement actions by international regulators are often costly.
The Modevity Vendor Risk Management Services will provide clients with a powerful automated branded process for vendor assessment questionnaires and a powerful due diligence vendor risk rating reporting service with continuous vendor monitoring.
Modevity has implemented the full range of powerful database technologies, AI and open-source tools that enable our team of research analysts to quickly obtain a complete vendor risk profile. Our client companies will no longer need to implement Vendor Risk Management & Assessment software and staff resources – providing substantial organizational cost savings to their organization.
Modevity Contact info:
Tom J. Canova, Co-Founder, CMO
Phone: (610) 251-0700
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