Supplier risk is a top contributor to data breaches. On average, a single data breach costs companies $4.9 million, according to the 2024 Cost of a Data Breach Report by IBM. To counteract this growing threat, many organizations are investing in vendor risk management software.
Vendor risk management software is a tool that provides organizations with a structured and automated approach to identifying, assessing, and mitigating risks associated with their vendors and suppliers. It helps companies safeguard sensitive data, ensure operational continuity, and meet the complex demands of regulatory compliance.
In this article, you’ll learn how third-party risk management software works and how to implement it in your business. You’ll also find mini-reviews of UpGuard and other leading systems and discover how firms in different industries use the technology to protect themselves.
How VRM benefits organizations
- Streamlined vendor assessments: Vendor risk management (VRM) software automates the entire vendor lifecycle, from initial onboarding to offboarding. It allows you to build your own security questionnaires or use existing templates, and it automates the collection and validation of key documents, such as framework certifications and audit reports. This eliminates the need for manual, spreadsheet-based processes that are often slow and inconsistent.
- Automated risk scoring and continuous monitoring: VRM tools move beyond "point-in-time" assessments by providing continuously updated risk scores based on cybersecurity metrics like network security, email security, and vulnerability management. It can also perform external attack surface monitoring to identify risks, such as unpatched software or misconfigured DNS settings. Continuous monitoring and real-time alerts enable you to act on potential threats before they escalate into a breach or compliance violation.
- Regulatory compliance: VRM software enables businesses to ensure vendor compliance with key regulatory frameworks, including HIPAA, SOC 2, and ISO 27001. The platform tracks each vendor's alignment with these standards based on their security questionnaire responses and other evidence, simplifying compliance management throughout the vendor relationship.
How VRM software works
VRM software automates supplier management across the entire vendor lifecycle, from onboarding and contract reviews to offboarding. As with other critical business apps, you control the system via an intuitive dashboard to manage vendor risk assessments, track remediation progress, and stay ahead of compliance requirements.
VRM solutions help you manage risk with the following features:
- Security questionnaires: Build your own security questionnaire or edit an existing questionnaire in the VRM’s library so you can assess whether a vendor's business practices adhere to your cybersecurity, financial, compliance, and operational requirements.
- Evidence analysis: Request, collect, and validate additional documents on your VRM checklist—like framework certification, audit reports, and reports of previous breaches—to verify each vendor’s security posture through evidence analysis.
- Customized workflow automations: Customize workflows to manage key VRM processes like vendor risk assessments, questionnaire and evidence collection, and risk remediation management so your staff has time to handle more complex risk and compliance work.
- Automated risk scoring: Benefit from regularly updated risk scores based on vendors’ performance against key cybersecurity metrics (like network, email, and web security; level of preparedness; intrusion attempts; and mean time to detect) and attack surface monitoring (like unpatched software and misconfigured DNS settings).
- Single source of truth: A central data source ensures everyone works from the same, up-to-date supplier records. This is a big upgrade from the siloed spreadsheets manual VRM teams rely on, which leads to inconsistencies, missed deadlines, repeated work, and missed risks.
We were relying on spreadsheets, emails, and a lot of back-and-forths to assess vendor security. It was slow, inconsistent, and frankly, a nightmare to manage at scale.”
- Andrew Morton, Head of IT, GRC and Assurance at Chemist Warehouse
How to implement a vendor risk management program
Using third-party risk management software, you can follow these eight steps to set it up effectively and get the best return from it:
- Set your goals: Decide on your aims, like cutting vendor onboarding time in half and improving the risk classification accuracy. Then, establish KPIs to check the success of your performance and uncover room for improvement.
- Define your framework and risk thresholds: Choose the framework that reflects your risk tolerance to guide your vendor assessments and evidence requirements. Set a minimum security posture for vendors, making allowances for differences in inherent risk based on factors like the level of access to your data.
- Standardize your questionnaire and evidence gathering: Ask the same questions and collect the same evidence (like breach history reports, audits, certifications, and technical policies)—subject to any risk tolerance exceptions—to ensure consistent risk assessment across your third-party relationships.
- Automate assessments for better visibility: Set annual reviews on your TPRM software for all vendors and more frequent updates for higher-risk ones. This keeps their scores current and flags potential risks early so you can act before they breach policy thresholds.
- Integrate with your tech ecosystem: Push live data into the tools you already use to prevent vendors slipping past other teams like procurement. UpGuard features a range of native integrations into Jira, Slack, and ServiceNow. Zapier lets you connect with over 4,000+ software titles, including GRC, CRM, and ERP software. You can also connect via the UpGuard API and UpGuard webhooks.
- Use daily monitoring and real-time alerts: Set up alerts when a vendor’s security scores drop or a compliance issue, like an expired SOC 2 certificate, arises so your team can investigate immediately and escalate if needed to stay ahead of threats.
- Train your team to use the platform: Educate key people, like IT risk professionals, vendor risk managers, compliance officers, procurement leaders, and their teams, on the VRM’s functionality. That way, multiple co-workers know how to check a vendor’s live score, log a remediation request, and view past assessment activity from the dashboard.
- Adapt and improve: Stay up to date with constantly changing regulations and emerging new cyber risks. Regularly review your overall approach and VRM settings frequently and adjust as needed to maintain the highest security posture.
Comparison of the top Vendor Risk Management tools
Below is a high-level comparison of the top VRM software contenders in this list. For a more detailed analysis of each solution's strengths and weaknesses, download this competitor comparison guide.
The top eleven Vendor Risk Management tools options for improving VRM program efficiency are listed below.
1. UpGuard
Ideal for organizations looking for a comprehensive Vendor Risk Management tool addressing the full scope of the VRM lifecycle, including instant vendor-security risk insights, regulatory compliance tracking, 360-degree risk assessments, and automated workflows.
UpGuard’s performance against Key Vendor Risk Management features
Below is an overview of how UpGuard performs against the seven key features of an ideal Vendor Risk Management product.
(i). Attack Surface Monitoring
UpGuard includes attack surface management software to check for third-party cyber risks like unmaintained web pages and Microsoft Exchange Service vulnerabilities. Monitor vendors on your dashboard and build integrated workflows to analyze and handle attack surface vulnerabilities.
Watch this video to learn more:
(ii). Vendor Risk Assessment Management
UpGuard’s VRM SaaS tool streamlines the end-to-end vendor risk assessment process. It supports everything from gathering evidence to assess inherent risks before onboarding to deciding which risks to accept, waive, and prioritize during remediation. By leveraging AI, UpGuard significantly increases the speed and scalability of risk assessment workflows, elevating the overall efficiency of a Vendor Risk Management program.
Watch this video to learn more:
Learn more about how UpGuard is using AI to reimagine TPRM >
(iii). Security Questionnaire Automation
Address the most common cause of VRM process inefficiency: delayed questionnaire submissions. UpGuard uses automation technology to revolutionize the vendor questionnaire process, helping vendors complete their questionnaires faster and more efficiently.
- AI Autofill: This feature auto-populates suggested responses based on a database of a vendor’s previously submitted questionnaires.
- AI Enhance: This feature allows vendors to produce clear and concise responses from a set of bullet points.
UpGuard’s vendor questionnaire automation features significantly reduce time spent completing questionnaires, which means you receive responses in hours, instead of days (or weeks).
Watch this video for an overview of these features in UpGuard’s AI Toolkit.
UpGuard’s AI-powered features are available across all of its pre-built vendor questionnaire templates, which map to popular frameworks and standards, including HIPAA, PCI DSS, and ISO 27001.
Learn more about UpGuard’s questionnaires >
(iv). Risk Remediation Workflows
UpGuard includes an in-built risk remediation workflow for instantly addressing risks identified in risk assessments and questionnaires. To help security teams prioritize remediation tasks that will have the greatest positive impacts on an organization's security posture, UpGuard projects the likely security posture improvements for selected remediation tasks.
(v). Regulatory Compliance Tracking
UpGuard’s VRM solution tracks each vendor’s degree of alignment against popular regulations based on security questionnaire responses.
UpGuard’s security questionnaires map to the standards of regulations like HIPAA, PCI DSS, and NIST 800-53, identifying compliance risks based on questionnaire responses. This feature offers a competitive advantage to VRM and Third-Party Risk Management programs, simplifying compliance management, even during the most critical phases of a vendor relationship —onboarding and offboarding.
Watch this video for an overview of how UpGuard helps users proactively communicate compliance efforts with stakeholders:
To expedite remediation processes, UpGuard offers vendor collaboration features, streamlining communication about specific security risk fixes.
Watch this video to learn how UpGuard streamlines vendor collaborations to achieve optimum remediation efficiently.
(vi). Vendor Security Posture Tracking
UpGuard’s security rating feature quantifies vendor security postures by evaluating over 70 critical attack vectors across ten risk categories.
- IP/domain Reputation
- Website
- Encryption
- Vulnerability Management
- Attack Surface
- Network
- Data Leakage
- DNS
- Brand Reputation
UpGuard’s vendor risk ratings mechanism adheres to the Principles for Fair and Accurate Security Ratings to produce objective, independently verifiable security posture measurements.
Learn more about UpGuard’s security ratings >
(vii). Cybersecurity Reporting Workflows
UpGuard’s Vendor Risk Management platform offers a library of customizable cybersecurity reporting templates showcasing vendor risk mitigation efforts and the performance of other risk management processes to keep stakeholders informed of your VRM performance.
To streamline the complete reporting workflow, UpGuard allows board reports to be exported into editable PowerPoint slides, relieving the burden of preparing for VRM and TPRM board presentations.
Learn more about UpGuard’s reporting and dashboard features >
UpGuard’s performance against key Vendor Risk Management metrics
Below is an overview of how UpGuard performs against three primary performance metrics collectively representing the usability and reliability of a VRM tool.
(i). User Friendliness
Customers on Gartner and G2 often praise UpGuard’s intuitive, user-friendly design.
Download UpGuard’s G2 report >
"I really value how simple it is to install and operate UpGuard. The program offers a complete cybersecurity answer and has an intuitive user interface."
- 2023 G2 review
To get a sense of how quickly the onboarding process is with UpGuard, 7 Chord, an independent provider of predictive pricing and analytics to fixed-income traders, was able to onboard over 20 of its vendors and start monitoring them immediately in less than 30 minutes.
"We found UpGuard’s design very clean and very intuitive – more intuitive than the UI of its competitors, making it an easy decision to go with UpGuard."
- 7 Chord
(ii). Customer Support
UpGuard strives to offer the best levels of customer support in the industry. Currently, UpGuard maintains a 98% satisfaction rating, with local and global support and a dedicated customer support manager for each client.
“UpGuard offers the best support after onboarding. UpGuards CSM representatives are very professional & prompt in responding to the issues raised. Tech support is also great.”
- 2023 G2 review (read review)
(iii). Risk Scoring Accuracy
UpGuard’s risk-scoring mechanisms aim to reflect the most objectively accurate profile of a vendor’s security posture.
UpGuard’s vendor risk profile offers a detailed breakdown of all risks influencing security posture measurements—represented as security ratings. With detailed reviews of discovered risks and instant remediation requests for each risk, you can independently confirm the legitimacy of each security threat and the accuracy of its criticality ratings.
UpGuard’s risk scoring accuracy has been highlighted in independent user reviews.
"UpGuard offers the most up-to-date and accurate information about third parties. Its third-party monitoring capability is handy for most medium to large enterprises."
2023 G2 review (read review)
2. SecurityScorecard
Ideal for businesses needing detailed risk assessments and strong visualization capabilities.
See how UpGuard compares with SecurityScorecard >
Good to know:
- Attack surface monitoring: SecurityScorecard’s attack surface scanning tool monitors open ports, DNS, HSTS, and SSL—but unlike UpGuard’s daily checks, SecurityScorecard only checks weekly.
- Vendor risk assessment management: You need separate Atlas licenses to integrate a vendor questionnaire and evidence exchange platform to generate vendor risk profiles. This could lead to disjointed vendor risk data, making it hard for users to understand a vendor's total actual risk.
- Security questionnaire automation: SecurityScorecard offers a vendor questionnaire management module with a library of questionnaire mapping to popular regulations and standards.
- Regulatory compliance tracking: The app’s collaboration feature makes it easy for security teams and impacted vendors to work together. By combining security rating data with questionnaire data, SSC can discover emerging compliance risks, even between official assessment schedules.
- Risk remediation workflows: The company offers LIFARS-led managed remediation services following a data breach. Alternatively, firms can handle remediation cases themselves. Like UpGuard, SecurityScorecard also projects the impact of selected remediation tasks on a company’s security posture.
- Vendor security posture tracking: The platform tracks vendor security postures with a security rating feature that evaluates cyber risks across 10 risk factors, grading vendors from A to F.
- Cybersecurity reporting workflows: The platform allows you to create customizable reports featuring relevant vendor risk data and in-depth board reports. Use them to showcase risk trends in your vendor ecosystem and benchmark your VRM performance against industry averages.
3. Bitsight
Ideal for enterprises requiring a risk-based TPRM tool with extensive vendor profiling.
See how UpGuard compares with Bitsight >
Good to know:
- Attack surface monitoring: Bitsight pulls internal and external attack surface insights from multiple sources (cloud, geographies, subsidiaries, and your remote workforce) into a single dashboard.
- Vendor risk assessment management: Bitsight allows you to customize vendor risk assessment to your firm’s risk profile, avoiding the ineffective one-size-fits-all approach.
- Security questionnaire automation: Bitsight uses Third Party Trust, which it recently bought, for vendor security questionnaire review workflow. The platform’s questionnaires map to popular industry standards, such as NIST, ISO, CIS Controls, and Shared Assessments.
- Regulatory compliance tracking: Bitsight doesn’t publish a list of the regulations it supports compliance with. Be careful not to sign up for a VRM solution unless you have complete confidence in its ability to address regulatory compliance risks.
- Risk remediation workflows: Bitsight claims to support the complete vendor risk management lifecycle, including remediation workflows. But clearing resolved risks can take too long, which may leave your security posture looking worse than it is.
- Vendor security posture tracking: Bitsight’s external attack surface monitoring features aim to represent your vendor’s attack surface as an attacker would see it. The company quantifies security postures as a numerical value rating from 0 to 820.
- Cybersecurity reporting workflows: Bitsight’s Executive Reporting feature pulls relevant vendor risk metrics into a cybersecurity report for board meetings. A particularly helpful part of Bitsight’s reporting workflow is the inclusion of Cyber Risk Quantification, which estimates the financial impact of selected cyber threat scenarios.
4. OneTrust
Ideal for SMBs focusing on automating vendor risk assessments and improving regulatory compliance.
See how UpGuard compares with OneTrust >
Good to know:
- Attack Surface Monitoring: OneTrust’s Data Discovery product helps you track sensitive data flows to minimize your sensitive data footprint. However, the solution's external attack surface visibility is limited.
- Vendor Risk Assessment Management: The platform maps to the primary stages of the VRM lifecycle, including due diligence and continuous monitoring.
- Security Questionnaire Automation: OneTrust streamlines security questionnaire workflows with questionnaire templates mapping to popular standards. The questionnaire can be adapted based on a vendor’s previous responses.
- Risk Remediation Workflows: OneTrust provides out-of-the-box remediation suggestions for all third-party vendors added to a centralized inventory, streamlining remediation workflows from the first instance of importing.
- Regulatory Compliance Tracking: With questionnaire templates mapping to popular regulatory standards, OneTrust identifies compliance-related risks across all assessed vendors.
- Vendor Security Posture Tracking: OneTrust leveraged security rating technology to track security posture deviation across all monitored vendors.
- Cybersecurity Reporting Workflows: OneTrust includes a cybersecurity report generation feature to keep stakeholders informed of vendor risk management efforts.
5. Prevalent
Ideal for organizations needing a flexible hybrid approach to VRM.
See how UpGuard compares with Prevalent >
Good to know:
- Attack Surface Monitoring: Prevalent offers comprehensive real-time monitoring for vulnerabilities and vendor-related security risks through its Global Vendor Intelligence Network. The platform’s scope of third-party attack vector monitoring extends to dark web forums and risk intelligence feeds to support information security and data privacy standards.
- Vendor Risk Assessment Management: The platform supports the entire vendor assessment lifecycle, including due diligence, continuous monitoring, and remediation. Prevalent provides pre-built, customizable assessment templates aligned with industry standards like GDPR, SOC 2, and PCI DSS. The platform also includes an exchange for sharing completed vendor risk reports, streamlining the due diligence process.
- Security Questionnaire Automation: Prevalent tracks the distribution of vendor security questionnaires, ensuring potential risks of third-party relationships undergo ongoing monitoring with point-in-time assessments. Notifications are triggered via automated reminders to encourage timely questionnaire completions.
- Risk Remediation Workflows: Prelavent includes a vendor risk remediation workflow that integrates into its risk assessment module to progress detected risks through the management lifecycle seamlessly.
- Regulatory Compliance Tracking: Prevalent’s questionnaires map to regulatory standards and frameworks to discover areas of misalignment. Compliance evidence can be exported into compliance reports to support audits and regulatory reviews.
- Vendor Security Posture Tracking: Prevalent uses security ratings to quantify and monitor the security posture of vendors. These security ratings consider historical data breaches among other vendor risk factors.
- Cybersecurity Reporting Workflows: Prevalent offers customizable cybersecurity reporting templates pulling VRM insights from the platform for stakeholders
6. Panorays
Ideal for businesses seeking in-depth third-party risk management and monitoring.
See how UpGuard compares with Panorays >
Good to know:
- Attack Surface Monitoring: Panorays leverages its Risk DNA technology to quantify risk scores based on various attack factors. The platform also addressed the external attack surface to offer visibility into third-party digital footprints.
- Vendor Risk Assessment Management: The Panorays platform includes features supporting all stages of the VRM lifecycle, from onboarding to continuous monitoring.
- Security Questionnaire Automation: Panorays leverages AI technology to scan previous questionnaire responses and supporting documentation, such as certifications, to expedite questionnaire completions.
- Risk Remediation Workflows: The platform integrates with third-party workflow apps like ServiceNow and RSA to streamline remediation workflows.
- Regulatory Compliance Tracking: Panorays tracks compliance risks with its library of questionnaires mapping to the popular regulatory standards. Tailored assessments can also be created based on unique compliance risk contexts with the platform’s Risk DNA feature.
- Vendor Security Posture Tracking: Panorays quantifies vendor security postures with security ratings for real-time tracking of vendor security posture deviations.
- Cybersecurity Reporting Workflows: Panorays offers customization templates for generating cybersecurity reports, providing an overview of the VRM performance for stakeholders and board members.
7. RiskRecon
Ideal for enterprises seeking deep, actionable insights into the cybersecurity health of external partners.
See how UpGuard compares with RiskRecon >
Good to know:
- Attack Surface Monitoring: RiskRecon offers real-time monitoring of vendor vulnerabilities in an organization’s attack surface. The likelihood of vendors suffering a security incident such as a data breach is quantified by considering 11 security domains and 41 attack vector factors.
- Vendor Risk Assessment Management: RiskRecon supports the onboarding and continuous monitoring phases of the VRM lifecycle, but it does not provide vendor risk assessment workflows.
- Security Questionnaire Automation: RiskRecon does not offer an in-built security questionnaire workflow, which is a significant concern given the criticality of this phase in the VRM lifecycle. To fill this gap, RIskRecon is forced to partner with other solutions offering a risk assessment solution, which unnecessarily bloats the digital footprint and, therefore, the attack surface of this VRM tool.
- Risk Remediation Workflows: The platform has a very limited remediation workflow, not accommodating for collaboration between multiple parties. Without a seamless process for inviting parties to collaborate with specific remediation processes, the limitations of RiskRecon’s remediation workflow impact the scalability of a VRM program being supported by the tool.
- Regulatory Compliance Tracking: Through its compliance indicators feature, RiskRecon can measure alignment against popular regulatory standards and cyber frameworks. However, the platform does not offer the degree of compliance effort visibility expected by compliance teams.
- Vendor Security Posture Tracking: RiskRecon uses security ratings to quantify and monitor vendor security postures.
- Cybersecurity Reporting Workflows: RiskRecon includes a cyber risk report generation feature that summarizes an organization’s security posture based on external security risk factors.
8. ProcessUnity (formerly CyberGRX)
Ideal for businesses wanting to reduce the busy work involved in due diligence.
See how UpGuard compares with ProcessUnity >
Good to know:
- Attack Surface Monitoring: ProcessUnity offers continuous monitoring of external inherent risks, quantifying vendor security postures as security ratings.
- Vendor Risk Assessment Management: The platform emphasizes supporting the due diligence phases of vendor onboarding, particularly pre- and post-contract due diligence. A more streamlined and secure due diligence workflow encourages efficiency in the downstream risk assessment process.
- Security Questionnaire Automation: ProcessUnity offers a risk assessment library mapping to popular regulations and standards. By leveraging AI technology in its Predictive Risk Insights feature, ProcessUnity could expedite risk discovery through questionniares efforts.
- Risk Remediation Workflows: The platform leverages AI technology to streamline third-party risk discovery and remediation through its Predictive Risk Insights feature.
- Regulatory Compliance Tracking: ProcessUnity primarily focuses on tracking compliance risks associated with the Digital Operational Resilience Act (DORA) and the German Supply Chain Act (LkSG).
- Vendor Security Posture Tracking: The platform offers security rating features to expedite the process of vetting potential vendors within the due diligence phase of VRM.
- Cybersecurity Reporting Workflows: ProcessUnity offers a configurable cyber reporting template for tailoring VRM reports to the visibility requirements of stakeholders.
9. Vanta
Ideal for small businesses needing to simplify vendor compliance tracking
See how UpGuard compares with Vanta >
Good to know:
- Attack Surface Monitoring: Vanta offers a continuous monitoring solution based on tracking alignment against security and regulatory standards. However, the platform provides minimal coverage of the external attack surface in its monitoring scope.
- Vendor Risk Assessment Management: Vanta automatically assigns an inherent risk score for all onboarded members to expedite progression through risk assessment workflows. The tool bases its risk assessment approach on the guidelines of ISO 27005, helping users meet the standards of ISO 27001, SOC 2, and HIPAA.
- Security Questionnaire Automation: Vanta automates manual, repetitive questionnaire tasks, such as the completion of repetitive questionnaires.
- Risk Remediation Workflows: Through its risk management solution, Vanta integrates remediation workflows into its risk assessment feature to expedite vendor risk management.
- Regulatory Compliance Tracking: Vanta tracks compliance against all of the popular cybersecurity frameworks and regulations.
- Vendor Security Posture Tracking: Vanta does not incorporate vendor security ratings or vendor data leaks into risk assessment and remediation insights.
- Cybersecurity Reporting Workflows: The platform allows compliance reports to be generated through its Trust Report feature.
- Risk Scoring Accuracy: The trustworthiness of Vanta’s risk scoring calculations is questionable, given its limited consideration of the external attack surface.
10. Drata
Ideal for organizations needing to streamline compliance workflows and maintain audit readiness.
Learn how UpGuard compares with Drata >
Good to know:
- Attack Surface Monitoring: Drata helps organizations achieve audit readiness by monitoring compliance-related risks. However, the solution lacks an inventory discovery feature, which is a critical component of Attack Surface Management.
- Vendor Risk Assessment Management: The platform offers a policy builder to simplify compliance risk tracking in its assessment workflow.
- Security Questionnaire Automation: Through its Trust Center, Drata expedites the vendor security profile building, streamlining the questionnaire workflows that follow
- Risk Remediation Workflows: Drata streamlines risk management by automatically mapping discovered risks to their corresponding risk controls. Users can also opt to receive alerts about evolving risks related to their tailored treatment plans.
- Regulatory Compliance Tracking: Drata tracks compliance gaps against 14 popular cybersecurity standards.
- Vendor Security Posture Tracking: Drata tracks vendor security postures using qualitative methods, a subjective indication of vendor risk severity through a graphical risk posture bar. This approach makes it difficult to align multiple parties with risk management strategies due to its subjective nature. A more objective approach to security posture tracking that multiple parties are more comfortable aligning with, including stakeholders, is the use of security ratings.
- Cybersecurity Reporting Workflows: The platform allows security posture reports to be generated for stakeholders and board members to communicate cyber risk exposures at any time.
11. Black Kite
Ideal for dynamic risk rating, open-source threat intelligence, non-intrusive cyber reconnaissance, and detailed reporting.
Learn how UpGuard compares with Black Kite >
Good to know:
- Attack Surface Monitoring: Black Kite covers a comprehensive scope of the third-party attack surface to build its risk insights. Some of the risk domains covered include set reputation, credential compromises, social media monitoring, and dark web searches.
- Vendor Risk Assessment Management: Black Kite does not offer an in-built risk assessment workflow. Users would need to integrate separate third-party risk management software to build a complete vendor risk assessment program.
- Security Questionnaire Automation: Black Kite uses AI technology to parse completed questionnaires and other relevant cybersecurity documentation to calculate compliance and risk exposure scores for each vendor.
- Risk Remediation Workflows: The compliance risks detected through the platform’s AI-powered document parsing capabilities expedite risk discovery and subsequent remediation tasks. However, the platform primarily focuses on the remediation and management of compliance-related risks.
- Regulatory Compliance Tracking: With its cyber-aware AI, Black Kite can parse multiple document types, not just questionnaire responses, to build a comprehensive compliance risk exposure profile. Detected risks are automatically mapped to popular frameworks, including SOC 2, NIST, GDPR, and ISO27001,
- Vendor Security Posture Tracking: Black Kite assigns technical security ratings to vendors across a wide range of attack vector domains. However, its large number of data points casts its risk-scoring accuracy into a questionable light.
- Cybersecurity Reporting Workflows: The platform’s strategy report feature allows cybersecurity risk posture insights to be readily shared with stakeholders.
Real-world applications of vendor management software
Here's a breakdown of how three industries that are most vulnerable to third-party risks use VRM software to reduce their exposure to vendor-related security issues and maintain compliance at scale.
1. Financial Services
Banks, insurers, and investment firms rely on an expansive digital supply chain to manage core operations, yet these third parties often introduce new attack vectors. Financial institutions are prime targets for cybercriminals due to the sensitivity of client data, monetary assets, and the systemic importance of their services. This sector must also comply with an evolving list of stringent regulations, like PCI DSS, SOX, GLBA, GDPR, AML, and KYC, among others.
Vendor management software helps financial services organizations enforce consistent due diligence, automatically assess the cyber posture of vendors, and maintain auditable records for compliance. Platforms like UpGuard protect financial services by prioritizing third parties based on risk criticality, continuously monitoring for changes in risk posture, and streamlining incident response if a vendor is compromised.
With financial services regulators increasingly expecting evidence of ongoing oversight, VRM tools provide a defensible and scalable way to prove governance.
2. Healthcare
Modern healthcare organizations rely on a network of vendors to process, store, and transmit protected health information (PHI), ranging from EHR platforms and billing processors to AI diagnostic tools and telehealth apps. This complex ecosystem creates multiple points of failure for privacy violations and data breaches. Laws like HIPAA and HITECH hold covered entities accountable for their vendors’ security practices.
VRM platforms are vital in mitigating these downstream risks. By centralizing third-party assessments, tracking evidence of compliance, and automating the review of vendor security controls, healthcare organizations can reduce the likelihood of PHI exposure.
Tools like UpGuard also monitor a healthcare entity's external attack surface of vendors, flagging vulnerabilities such as open ports or misconfigured cloud storage, issues that have led to numerous healthcare data breaches.
In a field where reputation and patient trust are paramount, proactive vendor oversight is not optional.
3. Technology
The technology sector is fast-paced, often integrating dozens or hundreds of APIs, SDKs, and third-party SaaS platforms into their products and internal systems to support rapid scaling. These dependencies accelerate development but also increase the attack surface. A vulnerability in one downstream vendor can cascade through the stack, leading to widespread disruption, as seen in incidents like SolarWinds.
Vendor management software enables tech companies to maintain agility without sacrificing security. Automated vendor discovery features surface shadow IT and fourth-party dependencies, while security ratings and issue tracking provide real-time insight into each vendor’s risk posture.
With platforms like UpGuard, engineering and security teams can jointly vet third parties during procurement and implement tiered oversight based on business impact. This proactive model supports compliance with ISO 27001, NIST, and SOC 2, while giving stakeholders confidence that the innovation pipeline is protected from third-party failures.
FAQs about Vendor Risk Management tools
What are the key features to look for in vendor risk management software?
Look for a vendor risk management platform that speeds up onboarding, tracks each vendor’s security posture in real time, and evaluates each one against your organization’s risk tolerance. Choose a solution that offers automatic alerts for compliance issues, supports custom workflows aligned with your internal processes, and delivers data-driven insights to help you make better decisions.
How long does it take to implement a VRM solution?
The length of time it takes to set up a VRM solution depends on the platform you choose. With a user-friendly, cloud-based platform like UpGuard, you can set up the software so it’s operational within an hour or two. Larger businesses may need longer to fully integrate the platform with their existing VRM workflows.
Can vendor risk software integrate with my existing GRC tools?
VRM solutions like UpGuard integrate with existing GRC tools through APIs, webhooks, and native integrations with apps like Jira and ServiceNow. When speaking with a VRM provider's sales rep, ask them whether their platform integrates with the software you use.
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