In a world where we outsource more and more of our business to key third-party players, it’s important to manage your business risks along with these rewarding partnerships. Whether you’re a small business or a large corporation, it’s important to make sure you stay safe in day-to-day business. Managing your third-party relationships will be critical to the success of your business. Having one in place before onboarding a vendor is ideal, but it’s never too late to take control of your vendor risk management (VRM).
An Overview of Third-Party Risk Management (TPRM)
What does it even mean to have a vendor risk assessment framework in place? Today we’ll look at how the security procedures, checks, and vetting you do on your vendors, together with access management, will come together to create a security framework for your business.
TPRM isn’t just about a one-and-done onboarding, but rather a pattern of behavior and risk assessment with your vendors that evolves with your needs and relationship. And it all starts with a solid TPRM framework.
What is a Third-Party Risk Management Framework?
Think of your third-party framework as the overall guidance you put in place to handle every vendor partner you have. This way, you create one streamlined process that ensures no risk management loopholes are left. It’s not a static process, but rather a seamless procedure that leads from vendor onboarding through day-to-day activities, keeping you safe along the way. When you correctly assess your third-party risk management procedures, identify different levels of risk, and act to create a smooth vetting procedure and long-term access control that empowers your staff to work but keeps your organization safe, you create a third-party risk management framework.
The Importance of Having a TPRM Framework
Why do you need that third-party risk assessment framework, however? A robust program of TPRM that covers all stages of the vendor lifecycle, from onboarding through daily activity to offboarding at the end of the relationship is essential. There’s no point in focusing solely on business metrics like delivery times while financial, security, and reputation risks are left to wreak havoc.
Likewise, there are regulatory and legal requirements, and compliance, to be considered. When you understand the risks your business is exposed to, you can take steps to reduce them. Otherwise, you're wide open to exploitation and data loss.
How To Select a TPRM Framework?
How do you find the right vendor assessment framework for your needs? It starts by considering your company’s regulatory, compliance, and oversight requirements. Then you should decide where you draw the line on acceptable risks- this could look very different for an accounting or financial company vs a florist, say. From there, you will also need to integrate data on your existing business processes, the joint ventures you have in place, how much you rely on third parties, and any holistic risk management strategies you run internally.
With that in place, you have a better idea of what you really need from a third-party management framework. From there, it’s important to establish and enforce a standardized way to assess risk, assign risk categories, and then mitigate that risk through smart automation, procedure, and legal frameworks. Many organizations take third-party risk management directly to the CEO or board of director level, ensuring fully regulated protocols are in place.
Many holistic 3rd-party risk management framework solutions exist. It’s not a case of one being intrinsically better than the other. It’s a case of finding the right match for your specific needs. Overall, the solution you choose has to be easily implementable day-to-day, in a way that will not significantly impact your operations or result in bloated, slow procedures. However, it must also adequately reduce your operational risk in using third-party vendors.
An Introduction to Certa
For most organizations, finding a way to build your third-party framework around software will be the most productive step possible. This way you can easily control and implement company-wide solutions at the click of a button, as well as reduce risk through limiting the control individual parts of the organization have over the process.
With Certa’s unique TPRM framework solution, you can make convenient, centralized TPRM hubs that are intuitive to use, easy to adapt to your organization’s unique needs, and thorough. With a decentralization from the needs of IT department control, it’s never been easier to implement the TPRM frameworks you need to keep your business safe whilst ensuring day-to-day procedures are not interrupted. From onboarding throughout the entire lifecycle of your vendor relationship, Certa will ensure that quality TPRM is simple, intuitive, and effective throughout your organization.