JAYEN GODSE, March 2020
Organizations often fail to anticipate the risks associated with third-party vendors. The threats to which they have exposed their own data, and possibly their customer’s data, are often realized only after the breach has happened, so all they can do at that point is damage control.
Without a proactive approach to vendor risk management, your organization can open itself up to increased levels of risk that can have a negative impact on the company’s financial standing, compliance posture, and overall ability to serve its customers. If you want to boost your competitive advantage and sustain future growth, the focus must be on a vendor risk management process that is proactive, not merely reactive.
Proactive Vendor Risk Management
While anticipating and assessing all potential vendor risks may be tedious and may even seem impossible, proactive vendor risk management is a critical discipline that must be integrated into your organization’s overall risk management culture.
Traditional IT vendor management solutions take a reactive approach, using programs that assess, report, and mitigate risks reactively—after they are exposed. The emphasis is placed on reducing fallout and minimizing consequent damage to the business. This focus on events that have occurred – instead of leveraging predictive digital tools such as AI, data analytics, and process automation – can be compared to the proverbial barn door that’s only closed after the horse escapes.
For most businesses, 24/7 coverage of IT systems is not financially feasible. Therefore, it is advisable to partner with vendor risk management company that:
- Provides end-to-end services including distribution, completion, and evaluation of assessments
- Creates customized assessments based on the company’s exclusive vendor profiles
- Immediately identifies potential issues before they turn into critical security breaches
Working with a managed service provider to move from reactive to proactive enterprise vendor risk management helps ensure that your vendors have the right controls in place to properly serve your organization. It also allows your business to improve compliance with regulatory demands, prepare for unexpected risk events, and maintain its reputation.
Putting Proactive Vendor Risk Management to Work
Adopting a vendor risk management strategy that uses the right tools to evaluate vendors and their processes improves your company’s ability to manage and/or avoid both existing and emerging risks. Internal IT staff can also adapt more quickly to unwanted events or crises while building an understanding of how to assess and mitigate risks. Your organization then has a better view of potential future risks, how they might impact your business, and how to avoid or mitigate those risks.
ComplyScore’s managed third party vendor risk assessment solutions help your organization approach risk management and vendor governance proactively and effectively at the enterprise level. By using a more forward-looking approach in your vendor risk management, you’ll avoid unexpected events and expenses for your business. That, in turn, results in improved compliance, greater business value, and ensured sustainability.
The bottom line? When choosing an MSP for your organization’s unique vendor risk management needs, look for one that can maintain a proactive approach that evolves as your organization’s vendor landscape unfolds and grows.