Vendor Risk Management: 5 Ways To Improve Your Efficiency
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Consider this: If you’re part of a large company with thousands of suppliers, you need efficient processes and tools to get a good sense of the risk those suppliers present. If you’re a part of (or own) a small company with only 20 suppliers, you likely don’t have a team of full-time employees dedicated to vendor risk assessment—which makes efficient processes critical for you as well.
Traditional VRM tactics are inadequate for understanding the cybersecurity posture of your vendor ecosystem. Find out how new technologies and methods are changing the game.
Whatever your company size and regardless of the number of vendors you have, creating efficiencies across your vendor risk management program isn’t just helpful—it’s critical if you want to properly assess the security posture of your vendors.
To that end, we’ve compiled five tips that will help you make your VRM process more efficient.
Vendor Risk Management: 5 Ways To Improve Your Efficiency
1. Ensure you have an organized team in place.
Internal organization is a prerequisite to VRM efficiency. Whether you have several full-time employees devoted solely to vendor risk management or a combination of employees across the organization responsible for carrying out various vendor risk management responsibilities, it’s important to have clear, defined roles and a set team in place.
2. Turn to automated solutions.
Continuous monitoring is one of the most obvious—and most effective—ways to create VRM efficiencies. Deploying a governance, risk, and compliance (GRC) system or a general third-party risk platform that helps you monitor your vendor risk is much more efficient than maintaining a spreadsheet and sending it back and forth between employees.
Furthermore, if you’re using effective software, it should have features in the system that allow you to automate certain elements that would otherwise need to be completed manually. For example, you could automate report generation for vendors and have it delivered to your inbox at regular intervals instead of seeking out data for different metrics.
3. Put a process in place and stick to it.
There are three standardized third-party vendor risk management processes you may consider using to assess vendor and cybersecurity risk:
Adopting these standards allows you to create a more efficient VRM program because it helps you focus in on a number of important cybersecurity areas with each of your vendors. You don’t have to follow each framework precisely, but using one (or all) of the frameworks above will improve your efficiency.
4. Tier your vendors based on their risk.
Grouping your third parties together based on the risk they pose to your business (or the criticality of the data they have access to) helps you work toward the risk level your company is able to take on and be more efficient during this process. For example, you may decide that tier-one vendors (your most critical vendors) should get a more comprehensive cybersecurity audit and questionnaire than your tier-three vendors. This decision helps you focus more of your valuable time and resources on the assessment of your more critical vendors.
Similarly, if you are using continuous monitoring software, you could create separate alerts for each group if there is a critical change in the group’s security posture. This way, you’d know if your organization could be at risk due to an issue with one of your top-tier vendors.
5. Make your cybersecurity posture a competitive advantage.
You know firsthand how much time, energy, and effort it takes to roll out a comprehensive third-party vendor risk management program. But instead of thinking of this as a drag or a time-consuming project, consider it a competitive differentiation. If your vendor risk management program is well-managed, well-controlled, and well-maintained you’ll have a more secure supply chain as a result. Companies with more secure third parties will in turn have a lower risk of accruing any financial or reputational damage that would result from a third party breach.
Still hungry for more information on vendor risk management efficiencies?
This ebook explains how both traditional and new VRM methods are handled, why traditional strategies are inadequate, and how to effectively mitigate your cyber risk. Download it today!