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How to Ensure Success at Every Stage of the Vendor Lifecycle

Building or improving your third-party risk management program in 2022? Use this best-practice guide to evaluate key capabilities.
By:
Scott Lang
,
VP, Product Marketing
September 21, 2021
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Procurement, infosec and risk management teams typically conduct some form of due diligence on third parties as they are sourcing and onboarding new vendors and suppliers. These teams must ensure that the new vendor is resilient and can reliably deliver on its contractual objectives; has the security and privacy controls in place to govern access to customer data to avoid a compliance problem or data breach; is financially healthy; and is not a reputational risk that can impact the company’s operations.

Yet, Prevalent’s annual third-party risk management study showed that most organizations are not extending their vendor evaluations beyond regular security assessments to include risk areas such as vendor performance and SLA management or offboarding and termination – each of them an important stage in the vendor risk lifecycle.

What’s holding organizations back? Manual, spreadsheet-based processes that leave gaps in third-party risk identification and overcomplicate risk analysis and mitigation, creating frustration for multiple internal teams involved in third-party risk.

It’s clear that organizations must mature their TPRM programs to better automate risk assessments and improve intelligence at every stage of the vendor lifecycle or risk the consequences of data breaches, compliance violations or business disruptions.

TPRM Best Practices: Keys to Ensuring Success at Every Stage of the Vendor Risk Lifecycle

Prevalent surveyed its customers in July 2021 to learn how they manage vendor risk throughout the third-party lifecycle. The results of the survey, available in our new white paper, Navigating the Vendor Risk Lifecycle: Keys to Success at Every Stage, provide helpful guidance and best practices for increasing visibility and reducing risk.

This post summarizes the findings from the study and provides insights on measuring TPRM program maturity and understanding all the stages in a vendor’s lifecycle. For complete insights, be sure to download the full paper. As a bonus, you’ll get real customer case studies and a checklist of capabilities to compare solution against.

Navigating the Vendor Risk Lifecycle: Keys to Success

This complimentary guide details best practices for successfully managing risk throughout the vendor lifecycle. See what we've learned in our 15+ years of experience working with hundreds of customers.

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Measuring TPRM Program Maturity

Before you know where you’re going, you have to know where you are. Our study shows that organizations can be anywhere in their TPRM program and process maturity, but we have grouped companies into three (3) broad, non-linear categories:

  • Automation centric: Organizations at this maturity level are driven by the need to better automate their processes in reaction to inefficient spreadsheet-based approaches. These teams suffer under intense personal daily pains of managing vendors and reacting to third-party incidents without the tools and process to simplify it all. However, risk typically isn’t part of the organization’s ethos.
  • Compliance centric: Companies here have an organizational mandate to address a regulatory requirement that compels them to report on their third parties’ security and privacy postures. They have to do it. It’s in this category that companies come to realize they need a program, not a project. They likely are suffering from manual process or under the weight of a GRC tool that isn’t completely fit for purpose.
  • Risk management centric: Rare outside of large, highly regulated entities, organizations in this category have enterprise-level risk management functions, and risk is part of the ethos of the company. They enjoy executive-level support, board visibility and the resources to at least keep up with daily demands.

How does your organization rank in its TPRM process maturity? Download the paper for additional criteria to score your placement.

Stages of the Third-Party Lifecycle

Results from our study showed that there are seven (7) distinct stages of a vendor’s lifecycle, each presenting its own unique risks and ideal solutions. What are the stages and what are companies looking to accomplish at each stage?

  1. Sourcing and Selection of Vendors. Comprehensive risk profiles that enable faster and easier comparison of vendors, and quick checks against common reputational, financial, security and privacy controls and practices.
  2. Intake and Vendor Onboarding. Straightforward onboarding workflows and vendor import options to create a comprehensive supplier profile, combined with a customizable intake process that is sharable with anyone inside (or outside) of the organization to participate in the onboarding process.
  3. Scoring Inherent Risks. Automatically tier, profile and categorize vendors on virtually any criteria to right-size further due diligence efforts.
  4. Assessing Vendors and Remediating Risks. Multiple pre-built questionnaires (standard and customized); the option to leverage the library of completed assess, or have someone perform the collection, analysis and remediation for you; and built-in remediation guidance and compliance reporting to simplify it all.
  5. Continuous Monitoring for Security, Reputational, and Financial Risks. A comprehensive view of risks that extends beyond an annual assessment and includes regular vendor cyber, reputation and financial alerts. Armed with this information, organizations add a more real-time view of vendor risks instead of the standard static approach endemic to spreadsheets.
  6. Managing Ongoing Vendor Performance and SLA. A vendor’s ability to deliver on its promises is as important as its cybersecurity controls. Organizations want solutions that continuously monitor service level agreements (SLAs) and alert to potential performance problems right alongside their cyber, privacy, or other risk assessments.
  7. Offboarding and Termination of Vendors. Easy to understand workflows, document management and checklists to ensure physical and virtual security controls are in place as a business relationship winds down.

Next Step: Build Your TPRM Program Like the Leaders Do

If your organization is looking to build or improve its TPRM program for 2022, Prevalent can help. Download the white paper, Navigating the Vendor Risk Lifecycle: Keys to Success at Every Stage, and gain helpful insights into:

  • How to determine where your organization is in its TPRM maturity (and how to get to the next level)
  • Tips, best practices and traps to avoid
  • What real customers are doing to solve their TPRM problems
  • Critical capabilities to look for when evaluating vendor risk management solutions

Whether you’re new to third-party risk management or a seasoned pro, you’ll walk away with actionable insights for making your program a success.

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Scott Lang
VP, Product Marketing
Scott Lang has 25 years of experience in security, currently guiding the product marketing strategy for Prevalent’s third-party risk management solutions where he is responsible for product content, launches, messaging and enablement. Prior to joining Prevalent, Scott was senior director of product marketing at privileged access management leader BeyondTrust, and before that director of security solution marketing at Dell, formerly Quest Software. He can be reached on Twitter @scottinohio, LinkedIn and Facebook.
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