Critical Elements of Vendor Risk Management Automation

The most important step in managing your vendors and supply-chain is to build an effective and scalable vendor risk program that you properly maintain over time. If this sounds like a distant reality from the state of your vendor risk program, you are doing it wrong. Read on to fully understand the challenges and get ready to implement the solutions. A comprehensive vendor risk management program is within your reach.

Critical Elements of Vendor Risk Management Automation

Vendor Risk Management

With the growth and popularity of outsourcing services and products, companies are becoming more reliant on third party vendors in the daily running of their businesses. Connectivity and flawless integration provide huge benefits to productivity but also create increased risk exposure as third parties access your networks, critical systems and data. 

The management and monitoring of risks resulting from third-party vendors and suppliers of information technology (IT) products and services should be a top priority for every company who takes their security seriously. Another issue to consider are the vendors of your vendors, or ‘fourth party risk’.

The cost of an average data breach has increased significantly over the last few years from $3.86 million in 2020 to $4.24 million in 2021. Third-party data breaches are even more costly than a regular data breach by an ‘outsider’ due to added liability costs. The legal battles involved further increase stress and costs, plus damage to reputation and risk of intellectual property loss all amount to a disaster.

The benefits of using third party services are unarguable. The aim is to ensure that they do not create “an unacceptable potential for business disruption or a negative impact on business performance” (Gartner). Strong cyber security controls are needed in order to reduce security vulnerabilities and a robust vendor risk management policy must be drawn up to encompass all elements of vendor risk management. Using industry-relevant compliance frameworks and holding vendors accountable to regulations will ensure that all avenues of security are thoroughly covered.

Challenges to Vendor Risk Management (VRM)

Keeping up with constantly evolving regulatory requirements

NIST frameworks and ISO 27000 are no newcomers to vendor risk management and have required controls in this area for quite some time. As recently as May 2022, NIST have released an informative white paper providing guidance for Supply Chain Risk Management.

Other standards and regulatory frameworks are beginning to understand the importance of vendor risk and are expanding their demands to include more controls governing interaction with and use of vendors. A critical part of successful VRM is maintaining your management policy, regularly assessing its effectiveness and ensuring vendors are updated with all requirements. This can involve a lot of work:

  • Staying on top of new regulations, standards and controls
  • Implementing the changes effectively into your workflows and systems
  • Finding the balance between reducing your risk exposure and allowing your vendors to do their job unburdened by risk requirements.

Requiring vendors to implement industry frameworks is the best way to establish best practices.

Overseeing the VRM Management

Not every company has the resources to appoint qualified professionals to oversee the vendor risk management programs. Yet as your business scales up, more and more vendors come on board and even more resources are needed to assess risk and reduce exposure. Both small and large businesses need to find software that can assist with this mammoth task in a way that allows you to scale up, and doesn’t hold you back.

Creating a baseline standard

Being able to use a centralized database and standardized scoring across all your vendors is important from the get go. Comprehensive evaluation of each vendor and the ability to rank their risk levels is essential to establish the action needed to protect your company. Visibility is key in making smart vendor-related decisions and legacy solutions of spreadsheets and isolated questionnaires are no longer enough to gain a true picture of VRM.

Keeping your VRM program relevant

Constantly assessing your program to see its effectiveness means being able to see patterns and results of VRM. VRM needs constant attention and is as big a part of your risk management program as your internal risks. Make sure your VRM scales up with your company and takes all new threats into account. Use automated software to make this achievable. Regular evaluations of your VRM solution allows you to recognize opportunities for beneficial change, standardize processes, reduce costs, and most importantly, reduce risk.

Start Getting Value With
Centraleyes for Free

See for yourself how the Centraleyes platform exceeds anything an old GRC
system does and eliminates the need for manual processes and spreadsheets
to give you immediate value and run a full risk assessment in less than 30 days

Vendor Risk Management Automation Solutions  

An automated vendor risk management program will enable businesses to manage all aspects of VRM efficiently and optimally, and greatly improve their ability to reduce vendor risk. All the above mentioned challenges can be tackled and triumphed using the power of automation.

Critical benefits of using technology to automate third-party risk management include: 

  • Increase the speed of identifying risks (thereby shortening the risk exposure time and quickening the mitigation response) 
  • Decrease turn-around time (also reducing risk exposure time and certainly adding value to the vendor relationship) 
  • Save hundreds of hours and resources automating security risk assessments
  • Onboard vendors in minutes 
  • Security questionnaire automation
  • Allow vendors to answer pre-loaded questionnaires to measure vendor risk and compliance
  • Measure probability and impact of individual vendors or see them as a whole
  • Actively scan vendor websites to identify and mitigate vulnerabilities
  • See results in real time, watch progress as it happens
  • Data analysis and evaluation tools can be implemented for full visibility and easy assessment of results
  • Produce reports detailing high- and low-level analysis of vendor risk posture for individual vendors and overall
  • Keep vendors updated with regulations and compliance requirements
  • Reduce human error

The Centraleyes Solution

Centraleyes offers all of the above benefits – and more. Once you have your flawless VRM automated program up and running, what do you do with the risks you identify? With Centraleyes, you will empower your vendors with tools to close gaps and reduce risks by providing automated remediation steps for them to follow to fix any vulnerabilities or security flaws you find. Track progress and re-assess vendor security posture in real time.

Leverage all the capabilities of vendor risk and compliance automation with Centraleyes comprehensive risk management solution. Take a look for yourself how we can arm you with the tools to build a robust flawless vendor risk management program.

Start Getting Value With
Centraleyes for Free

See for yourself how the Centraleyes platform exceeds anything an old GRC
system does and eliminates the need for manual processes and spreadsheets
to give you immediate value and run a full risk assessment in less than 30 days

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