In today’s business environment it’s impossible to find a company that doesn’t contract with a third-party vendor to provide services. However, the convenience, flexibility and opportunities of outsourcing to third parties comes with significant risks.
The risks vary from industry to industry, the common threats being regulatory and the impact of a potential third-party vendor incidents. In recent times, the use of third-party vendors has increased exponentially, with many companies even outsourcing core functions to gain efficiency, savings and new products. In doing so, they’re exposing themselves to high-profile risks.
The biggest challenge going forward will be for organisations to provide the appropriate oversight to these third parties – before it’s too late. Previously third party risk management was a procurement issue, and the old-school process went something like this:
(1) Procurement or business unit would identify potential savings or new opportunity through outsourcing.
(2) Legal would draft the contract and it would be business as usual.
In today’s world, that just won’t make the grade.
Your company can outsource a service or process — but not responsibility. While most business is commenced with a basic due diligence being completed on a third party, there is growing regulatory pressure for rigorous and regular information security and data privacy reviews of third parties’ governance of all data assets. For example, do the third parties with whom you’ve started a business relationship have any of the following in place?
- An information security policy or standard covering the governance, management and operational aspects of information security — and has it been reviewed and signed off at board level in the last 12 months?
- A Business Continuity Plan (BCP) and Disaster Recovery Plan (DRP) outlining the strategy and approach for the continuity of the service they provide to you.
- An incident management policy or related policies covering topics such as detection, identification, logging, analysis and reporting of security incidents.
The silver lining is that this industry oversight is creating information security ownership at a boardroom level, and all third-party vendors are having to improve on every aspect of their information security and governance posture to stay in business and be competitive. This change is driving the industry to self-govern and improve through collaboration, communication and discussion.
Triplicity is third party risk management software that provides you with the framework, tools and processes to run a successful third party risk campaign with hundreds or even thousands of vendors, in an ongoing iterative process. The business benefit is scaled through automation and detailed reporting on all third parties in one location. Triplicity’s reporting dashboard lists all third-party vendors by risk, category, business unit and department, and links associated contracts.
Triplicity is setting the standard for cloud-based Third Party Risk Management (TPRM) software solutions, providing aggregated vendor assessments as a service.
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