[Blog](/blog) Show links Resources [Blog](/blog) [Breaches](/breaches) [eBooks, reports, & more](/resources) [Events](/events) [News](/news) [Vendor Risk Management](/category/vendor-risk-management) Show links Categories [Attack Surface Management](/category/attack-surface-management) [Company News](/category/company-news) [Compliance and Regulations](/category/compliance-and-regulations) [Cybersecurity](/category/cybersecurity) [Data Breaches](/category/data-breaches) [DevOps](/category/devops) [Human Cyber Risk](/category/human-cyber-risk) [Risks and Vulnerabilities](/category/risks-and-vulnerabilities) [Third-Party Risk Management](/category/third-party-risk-management) [Vendor Risk Management](/category/vendor-risk-management) [Cyber Vendor Risk Management (Cyber VRM) Best Practices](/blog/cyber-vendor-risk-management-best-practices) Publish date November 30, 2025 {x} minute read # Cyber Vendor Risk Management (Cyber VRM) Best Practices [Get a demo](/contact-sales) [Free trial](/demo) [Download the PDF guide](/resources/complete-guide-to-third-party-risk-management) [Free trial](/demo) Written by [Kaushik Sen](/team/kaushik-sen) Chief Marketing Officer Kaushik has a background in software engineering, enterprise solution architecture, and data analytics. He brings a unique, data-driven perspective to cybersecurity education. Reviewed by [Axel Sukianto](/team/axel-sukianto) Marketing Director Table of contents eBook A Complete Guide to Third-Party Risk Management Free resource ### A Complete Guide to Third-Party Risk Management Learn how to protect your business with an effective cybersecurity program. [Download now](/resources/complete-guide-to-third-party-risk-management) Using best practices for[ cyber vendor risk management (Cyber VRM)](https://www.upguard.com/blog/what-is-cyber-vendor-risk-management), organizations can identify, assess, and remediate their [third-party vendor](https://www.upguard.com/blog/third-party-vendor) risks specifically related to [cybersecurity](https://www.upguard.com/blog/cyber-security). Organizations can utilize information attained from [security ratings](https://www.upguard.com/blog/what-are-security-ratings), [data leak detection](https://www.upguard.com/blog/what-is-data-leak-detection-software), and [security questionnaires](https://www.upguard.com/blog/security-questionnaire) to evaluate their third-party [security posture](https://www.upguard.com/blog/security-posture)s using dedicated Cyber VRM solutions. In addition, Cyber VRM solutions can help organizations [prevent data breaches](https://www.upguard.com/blog/prevent-data-breaches), maintain [regulatory compliance](https://www.upguard.com/blog/what-is-compliance-management), and build strong third-party security frameworks. As businesses begin outsourcing to [third-party suppliers](https://www.upguard.com/blog/third-party-vendor), these suppliers can also contract their own service providers, which creates new [fourth-party operational risks](https://www.upguard.com/blog/what-is-fourth-party-risk). This variable in [supply chain management](https://www.upguard.com/blog/what-is-supply-chain-risk-management) means that [cybersecurity risk](https://www.upguard.com/blog/cybersecurity-risk) continues to grow, signifying the [importance of strong Cyber VRM](https://www.upguard.com/blog/why-is-cyber-vrm-important) practices. This article will discuss Cyber VRM and the top practices for building a strong Cyber VRM program. ## What is Cyber VRM? [Cyber vendor risk management (Cyber VRM)](https://www.upguard.com/blog/what-is-cyber-vendor-risk-management) focuses on the [*cybersecurity risks*](https://www.upguard.com/blog/cybersecurity-risk) of third-party vendors and suppliers. Cyber risks can include [information security](https://www.upguard.com/blog/information-security) practices, information technology (IT) services and tools, and overall [attack surface](https://www.upguard.com/glossary/attack-surface) management. Cyber VRM solutions help secure data for third-party vendors by using cyber solutions throughout the entire lifecycle and vendor due diligence process by assessing cybersecurity risk, [cyber incident response plans](https://www.upguard.com/blog/incident-response-plan), mitigation, and remediation processes. Cyber VRM differs from third-party risk management (TPRM) and vendor risk management (VRM) in that it strictly assesses cyber risk. TPRM and VRM solutions are broader categories that may also manage other risks like financial, reputational, operational, or environmental risks. [Learn about the top VRM solution options on the market >](https://www.upguard.com/blog/best-vendor-risk-management-software-solutions) ## Top 7 Best Practices for Cyber VRM Programs Here are the top 7 best practices that all Cyber VRM programs need to implement to limit potential risks. ## 1. Managing Vendor Relationships Managing third-party relationships is essential to scaling any Cyber VRM program and nurturing vendor cyber maturity. Organizations can work with a few dozen to thousands of third parties, which means overseeing each vendor can be time-consuming and resource-intensive. Implementing a vendor relationship management program is necessary for building stronger communication channels. In addition to building stronger communication, vendor relationship management helps organizations: * Measure the level of risk of each vendor * Perform [cybersecurity risk assessments](https://www.upguard.com/blog/how-to-perform-a-cybersecurity-risk-assessment) * Review contractual agreements * Evaluate business costs Because third-party vendors may not have [the same security controls](https://www.upguard.com/blog/data-protection-for-third-parties) as the organization, it's important to monitor their security practices and if they meet minimum requirements. Even security breaches at smaller vendors can result in significant [cyber attacks](https://www.upguard.com/blog/cyber-attack) for all related parties. Additionally, reviewing vendor relationships allows organizations to set clear cyber objectives for the future and reevaluate if the vendor continues to support the company's goals. This process can be done with security checklists, compliance reviews, legal support teams, and external business auditors to ensure the entire Cyber VRM plan is followed through on both sides. [Learn how to choose automated vendor risk remediation software >](https://www.upguard.com/blog/choosing-automated-vendor-risk-remediation-software) ## 2. Standardizing the Vendor Assessment Process Before onboarding vendors, the organization needs to establish minimum security requirements, risk acceptance levels, and a third-party cybersecurity framework to assess vendors efficiently and quickly. Without a standardized vendor risk assessment process, it can be time-consuming and difficult to evaluate a new vendor properly. [Vendor questionnaires](https://www.upguard.com/blog/security-questionnaire) are one of the first tools that organizations should use to assess a vendor's [cybersecurity posture](https://www.upguard.com/blog/security-posture). For many industries, they are also a regulatory requirement. However, the problem with traditional [vendor questionnaires](https://www.upguard.com/blog/top-vendor-assessment-questionnaires) is they are point-in-time, subjective, and time-consuming to fill out. Instead, organizations should use custom or pre-built questionnaires specific to the industry to better assess their vendors and significantly shorten the assessment period. Vendors classified as high-risk through the questionnaires and security ratings may be passed on if the organization feels their risk profile is not worth taking on. [Learn how to implement an effective VRM workflow >](https://www.upguard.com/blog/vendor-risk-management-workflow) ## 3. Continuous Monitoring and Assessment of Vendors After vendors are onboarded, part of the vendor risk management process is to continually monitor and assess their security performance. This monitoring process is necessary to ensure vendors are upkeeping their security controls. For example, security ratings can be used as a quantitative measurement of [security posture](https://www.upguard.com/blog/security-posture), similar to how a credit rating measures lending confidence. Higher security ratings mean better security postures, which is how organizations can measure vendor security. A[ security rating](https://www.upguard.com/) can provide a real-time, non-intrusive measurement of the vendor's current security posture and identify any areas needing immediate remediation. Ratings provide an aggregate view of vendor performance and key risks shared across their vendor portfolio. Third-party data leak detection tools are also important to get automated security alerts if data has been leaked or breached by a vendor. Third-party [cyber risk remediation software](https://www.upguard.com/product/vendor-risk/risk-remediation) is critical to immediately remediate the source of the leak and notify the vendor of the security risk. ## 4. Defining Vendor Performance Metrics Defining [vendor cyber performance metrics](https://www.upguard.com/blog/cybersecurity-metrics) is a great way for organizations to [evaluate the success of a Cyber VRM framework](https://www.upguard.com/blog/vendor-risk-management-implementation-framework)for vendors and service providers. Vendors that don't meet the metrics or key performance indicators (KPIs) outlined in a service-level agreement (SLA) may be removed as providers. Metrics are especially important for vendors with access to sensitive data, such as [PHI](https://www.upguard.com/blog/protected-health-information-phi) or [PII](https://www.upguard.com/blog/personally-identifiable-information-pii). They should also be required to perform their own risk assessments on their vendors to minimize [fourth-party risk](https://www.upguard.com/blog/what-is-fourth-party-risk). For example, if the organization is a [HIPAA-covered entity](https://www.upguard.com/blog/hipaa-privacy-rule), they are liable for vendor data breaches. Data breaches cause significant reputational and financial damage even if the organization isn't legally liable. If you're not sure what metrics are important to your organization, UpGuard's [third-party risk assessment software](https://www.upguard.com/product/vendor-risk/third-party-risk-assessments) can automatically assess your vendors against over 50 industry-specific metrics to determine their capabilities. ## 5. Monitoring Fourth-Party Vendors [Cybersecurity risk](https://www.upguard.com/blog/cybersecurity-risk) doesn't stop with third parties because there is a good chance they also have their own vendors, which introduces [fourth-party risk](https://www.upguard.com/blog/what-is-fourth-party-risk). Fourth-party risk management requires even greater consideration than third-party risk management because organizations likely have no legal contract with fourth parties. Many third parties fail to manage fourth parties the same way they are being managed due to different security requirements. Their security controls may not be sufficient, which creates a major risk management gap. Fourth-party risk management should include the following: * Remediation procedures * Risk exposure management * Provider selection processes * Security rating services However, monitoring fourth parties requires close communication and collaboration with third-party vendors. This includes having a dedicated IT security team and a strong vendor maturity model to help guide vendors that may not have as robust a security program. ## 6. Building a Cyber Resiliency Plan Even with a third-party risk management program in place, cyber attacks can still occur, which is why it's important to build strong cyber resiliency. Cyber resiliency includes [business continuity](https://www.upguard.com/blog/business-continuity-plan), disaster recovery, and [incident response planning](https://www.upguard.com/blog/incident-response-plan), which is a critical part of any Cyber VRM program. A third-party management plan must account for vendors that fail to mitigate their risks in a timely manner, resulting in the contract's removal or discontinuation. The organization and its vendors should be working to improve their cyber maturity as their operations scale, as part of the overall Cyber VRM strategy. ## 7. Use Dedicated Cyber VRM Solutions Building a strong cyber program can be difficult for new or scaling businesses. Managing attack surfaces, detecting data leaks, and third-party vendor security can be difficult and time-consuming. However, using [Cyber VRM solutions like UpGuard Vendor Risk](https://www.upguard.com/) can help organizations better manage their third-party vendor security with managed services and remediation solutions. eBook A Complete Guide to Third-Party Risk Management Free resource ### A Complete Guide to Third-Party Risk Management Learn how to protect your business with an effective cybersecurity program. [Download now](/resources/complete-guide-to-third-party-risk-management) ## Related posts Learn more about the latest issues in cybersecurity. Vendor Risk Management #### [Vendor Tiering That Scales: A Weighted-Model Implementation Guide](/blog/vendor-tiering-that-scales) UpGuard's guide to vendor tiering at scale: a weighted risk model that tiers vendors objectively and routes high-risk vendors for review automatically. [](/team/cassy-van-eeden) [Cassy van Eeden](#) October 13, 2026 Vendor Risk Management #### [The Vendor Tiering Series: Why Tier Your Vendors](/blog/vendor-tiering-why-tier-vendors) When every vendor is a priority, none actually are. Learn how effective vendor tiering defines criticality and maintains a defensible security posture. [](/team/revashni-moodley) [Revashni Moodley](#) February 25, 2026 Vendor Risk Management #### [Building a Robust Vendor Risk Management Dashboard](/blog/vendor-risk-management-dashboard) Discover the importance of building a robust VRM dashboard. This article outlines key features, essential metrics, and best practices. [](/team/nicholas-sollitto) [Nicholas Sollitto](#) September 20, 2026 Third-Party Risk Management #### [The Best Supplier Risk Management Software in 2026](/blog/best-supplier-risk-management-software) Discover the best supplier risk management software in 2026, including UpGuard Vendor Risk, Bitsight, and Riskconect. [](/team/cassy-van-eeden) [Cassy van Eeden](#) October 22, 2026 Cyber Risk Posture Management #### [The Best IT and Cyber Risk Management Software](/blog/best-it-and-cyber-risk-management-software) Discover the best IT and cyber risk management software, including UpGuard, Riskonnect, Diligent, Optro, ServiceNow, Archer, and MetricStream. [](/team/cassy-van-eeden) [Cassy van Eeden](#) September 3, 2026 Vendor Risk Management #### [Shadow IT: Usage-Based Tiering for Vendor Risk](/blog/shadow-it-tiering-vendor-risk) How UpGuard User Risk and Vendor Risk use real-time usage signals to discover shadow IT and tier every app by true risk profile in 2026. [](/team/cassy-van-eeden) [Cassy van Eeden](#) October 20, 2026 [All posts](/blog) Experience superior visibility and a simpler approach to cyber risk management [Get a demo](/contact-sales) [Free trial](/demo)