Third-party vendors are an important source of strategic advantage, cost savings and expertise. Yet outsourcing is not without cybersecurity risk. As organizations' reliance on third-parties grow, so too does their exposure to third-party risk and fourth-party risk.
In fact, a recent HSB survey found nearly half of data breaches in 2017 were caused by a third-party vendor or contractor.
Pair this with the fact that breaches involving third-parties cost more than $370,000 more for an adjusted average total cost of $4.29 million.
This has led to organizations investing in creating a third-party risk management (TPRM) framework and strengthening their vendor risk management (VRM) processes.
Many organizations are turning to technology to help scale their vendor risk teams across their ever-growing vendor base and to stay on top of new cyber attacks and cyber threats as they emerge.
When automation is brought to vendor risk management, organizations are able to greatly reduce their cybersecurity risk, improve information security and use vendor assessment questionnaires over the vendor lifecycle rather than at a single point in time.
Does Technology Improve the Speed of Vendor Risk Assessments?
Third-party risk management software can greatly increase the speed at which your organization can identify risks. A key challenge for most organization's third-party risk management programs.
Traditional vendor risk assessment processes and communication methods have long turnaround times, inhibiting your organization's ability to obtain a quick and comprehensive view of your digital supply chain's security posture.
This can greatly increase the risk exposure of your organization and delay the onboarding of new service providers.
In order to make quick decisions, governance, risk and compliance (GRC) teams need to be able to access and aggregate data about third-party relationships quickly and efficiently.
The speed at which your organization can comprehensively assess vendor information is critical to the success of any vendor risk management program, and ultimately the value that vendor relationship brings to your business.
New vulnerabilities and data leaks appear on CVE every day and quicker vendor assessments and selection time means less risk and less downtime.
Your organization's critical vendors could range into the hundreds and sometimes even thousands of vendors that affect your business's bottom line.
Tools like UpGuard Vendor Risk provide Cyber Security Ratings that instantly show an organization's quantified security performance over time.
As new threats and vulnerabilities emerge in real-time, you can instantly assess the impact on your third and fourth-parties and follow up as needed.
Learn how to use ChatGPT to improve your cybersecurity posture >
Can Technology Improve the Scalability of My Vendor Management Team?
The number of vendors and other third parties in every organization's ecosystem is on the rise. According to a recent report by BeyondTrust, on average 181 vendors are granted access to a company's network in a single week, more than double the number from 2016.
81 percent of companies have seen an increase in the number of third-party vendors in the last two years, compared to 75 percent in the previous year.
This is driven by the increasing popularity of cloud computing, new SaaS tools and an increasing demand for outsourcing to sophisticated vendors.
Whether we like it or not, there is an increasing number of third and fourth-parties connected to our organizations.
Most organizations are resource constrained and do not have the people or time required to adequately conduct due diligence on all of their third and fourth-parties.
This is why IT security teams are quickly turning to software to automate the burden of third-party risk management processes allowing them to focus on vendors based on risk and criticality to the business.
The alternative is greater risk exposure that increases the likelihood of third-party security breaches.
Technology can automate and streamline cybersecurity risk assessments and processes across your entire supply chain.
Doing so means your organization does not need to continually hire and train more people and can instead focus existing staff on mitigating the most immediate risks.
The questions you need to be asking yourself are:
- How can my organization monitor an increasing number of vendors, suppliers and third-parties?
- How can we monitor a large vendor base with greater diligence and frequency?
UpGuard Vendor Risk helps organizations scale their third-party risk program by automatically monitoring their vendors' security performance over time and benchmarking their performance against their industry.
Each vendor is rated against 50+ criteria and given a Cyber Security Rating calculated daily. We'll notify you when their score drops and automate your security questionnaires to help scale your security team by 10x.
Our risk management system centralizes your vendor risk into a dashboard that prioritizes the most critical risks and provides remediation workflows to ensure risks are resolved in an auditable manner.
Learn how to get your questionniares completed faster >
How Does Technology Improve Collaboration?
The most difficult aspect of vendor risk management isn't identifying the risk. It's working with vendors, suppliers and third-parties and giving them the resources they need to fix security issues. Getting vendors to act quickly means that both organizations must communicate effectively, using data and evidence rather than conjecture.
Additionally, it can be hard to prioritize what to fix first and which security issues are weakening your security posture the most.
For small vendors with limited resources, understanding what actions provide the greatest improvement is essential.
Just as SLAs are becoming more data driven, you need to have a data-driven conversation with vendors and have an agreement about what will be fixed first and be able to independently verify when it has been fixed.
Helping your vendors remediate risks and improve their security posture doesn't just benefit your organization, it benefits the broader ecosystem as shared third-parties make security improvements.
UpGuard's Vendor Risk management tool provides organizations and their vendors with the data and resources that are critical to these conversations.
