The Risk Manager’s Guide to Fast, Effective, and Continuous Supplier Due Diligence
Supplier due diligence is a key part of any third-party risk management (TPRM) program. Whether you are onboarding a new vendor or looking to reduce risk in your existing vendor portfolio, understanding your vendors’ risk profiles is a must.
Here’s how you can perform smart, efficient supplier due diligence – without placing undue burden on existing resources.
1. Validate vendor assessments
Before your business enters into a contractual agreement with a vendor, you must identify the cyber risk they pose to your organization. Ordinarily, this is achieved using security questionnaires or assessments which can provide context into your vendors’ security controls and handling of risk.
But these assessments are problematic for several reasons:
a) Questionnaires only provide a point-in-time snapshot of risk: As your suppliers digitally transform, outsource functions, and add new partners to their supply chains, their risk postures are constantly changing. Unfortunately, traditional security assessments only capture a point-in-time view of a vendor’s cybersecurity health.
b) They require you to take your vendors at their word: When your vendors complete a security questionnaire, their input is subjective and, without an extensive cybersecurity audit of their security programs, unverifiable. Taking your vendors’ data at face value can introduce hidden risk.
c) Assessments tend to be one-size-fits-all: No two vendors are alike, but typical supplier due diligence efforts often treat all vendors the same, meaning less critical vendors are assessed in the same way and using the same questionnaire as critical vendors – creating more work for risk management teams.
Security questionnaires still have their place in the vendor onboarding process, but they must be validated with objective data-driven insights. Rather than relying on their claims, it’s essential that you proactively and automatically assess your suppliers’ risk postures using objective data insights and analysis.
For instance, with Bitsight TPRM you can gain near real-time visibility into a vendor’s security posture – at the click of a button – and validate their questionnaire responses quickly and confidently.
The result is a more accurate picture of cyber risk. And, instead of relying on a one-size-fits-all approach to risk assessment, you can better prioritize those vendors whose security needs are most pressing for more in-depth security assessments.
2. Keep tabs on cyber risk throughout the vendor lifecycle
Your supplier due diligence efforts don’t end once the contracts are signed. Maintaining a pulse on your vendors' changing risk profiles is vital.
With Bitsight TPRM, you can monitor your vendors’ cyber health continuously and automatically throughout the life of the relationships. You’ll get dashboard views into each vendor’s risk profile and receive alerts the moment new risk – such as an insecure access port, misconfigured system, even a risky fourth-party relationship – is discovered. You can also choose to be alerted if a vendor’s risk posture drops below pre-agreed thresholds or contractual SLAs.
Because risk management is a collaborative process, you can also share Bitsight’s findings with your vendors and work together to improve cyber health across the supply chain.
A better way to manage cyber risk
As your organization works with more vendors, scaling your vendor due diligence is a challenge. Assessments take time, are often manual, and expose your organization to increased cyber risk.
But through automation and data-driven insights, Bitsight can help you make more informed third-party risk management decisions – without adding headcount.
And now, through our acquisition of ThirdPartyTrust, we are unlocking advanced capabilities that allow you to manage risk throughout the entire vendor lifecycle automatically, efficiently, and at scale – in a single integrated tool.
Contact us today to learn more about the Bitsight TPRM offering and our acquisition of ThirdPartyTrust.