- 25 May 2023
Third-party risk is everywhere, and it’s growing all the time as a result of greater connectivity. Protecting your organisation and its stakeholders means more than getting the best value for money from your suppliers; it also involves ensuring that they don’t expose you to reputational harm and cybersecurity risk, nor create weak links in your supply chain.
Here are the most common issues most people face with their third-party and security risk management and assessments, and how to deal with them.
1. Problem: You’re wasting a lot of time and money on manual management of your third parties.
Fix: Automation is the key to keeping records up-to-date, minimising inaccurate or bad data, eliminating human error, and creating maximum efficiency. Long gone are the days when a spreadsheet and a Friday afternoon spent ‘catching-up’ on record keeping will suffice.
Look for a solution that will allow you to create a standardised structure that can be applied to all of your existing and new third parties.
2. Problem: It’s too difficult to make side-by-side comparisons of suppliers during the request for proposal (RFP) process, leading to less-than-optimal selections.
Fix: Design a well-structured RFP process with built-in flexibility, so that it allows suppliers to demonstrate innovation and highlight key areas in which they can meet your needs. Avoid poorly structured questionnaires that are rigid yet vague, thereby eliciting responses that have nothing in common with each other.
The solution you choose should:
- Allow your respondents to reuse answers for other questionnaires, saving them time and effort.
- Enable respondents to allocate questions to their subject-matter experts, and collaborate on the same platform with their colleagues.
- Provide a standardised structure for questionnaires, and generate an analysis of responses for you. These reports will help you to benchmark the responses, no matter how many suppliers you’re dealing with. Ideally, your solution should also be able to give you visual aids, like dashboards, so that you can easily create presentations to decision makers.
- Connect to real-time risk data, so that any flagged suppliers can be eliminated from the RFP process at an early stage.
Your RFP platform should also save you time and ensure that you get the most out of the process by sending automated reminders to respondents before the deadline, and tracking the progress of respondents during the RFP.
3. Problem: Vendor networks are increasingly complex, making it hard to see where risk exposure lies.
Fix: Everybody wants, and needs, greater oversight of their third parties. Automation is key to achieving this, because it can give you a risk analysis in real time. When choosing a third-party management solution, ask about options for integrating greater capabilities, like cyber security monitoring and risk ratings.
4. Problem: Organisations in regulated industries are coming under heightened pressure.
Fix: A good third-party risk management (TPRM) tool will allow you to easily generate reports for regulators and other stakeholders. These reports will demonstrate your organisation’s thorough due diligence, RFP and TPRM processes, as well as provide evidence of ongoing monitoring of your risk exposure.
5. Problem: You are experiencing a growing number of cyber attacks through your exposure to your third parties.
Fix: Identifying an area of unnecessary risk exposure is the first step to eliminating it. Find a solution that will let you reduce your dependency on a large number of third parties for business operations across multiple jurisdictions.
Ensure your off-boarding processes are robust and carried through, so that dormant or ended relationships don’t continue to provide threat actors with a way into your systems. Don’t forget that the RFP process is where you have the opportunity to avoid suppliers who present you with an unacceptable level of risk.
6. Problem: You have a lot of sensitive client, customer and stakeholder data that is at risk in the event of a security breach.
Fix: The solution you select will need to give you effective control over what your third parties can access when it comes to your organisation’s sensitive data, while still allowing you efficient use of the information you need to make the best decision.
Orbit Diligence is your hub for deep-dive due diligence
Whatever problem you’re facing, Orbit Diligence is here to help you overcome it. It will free up your valuable resources by automating your due diligence questionnaires and request for information and request for proposal processes. It's a flexible, scalable solution that allows you to use an extensive library of off-the-shelf questionnaires and risk frameworks, or incorporate your own materials.