In today’s interconnected business landscape, external vendors, suppliers, and service providers play a crucial role in helping businesses drive growth, improve productivity, and build long-term resilience. However, onboarding these suppliers brings a host of potential vulnerabilities that can significantly impact a company’s security, compliance, and reputation.
Conventionally, the responsibility for evaluating third-party risk was handled by legal and procurement teams during the onboarding process. While many mature organizations now have dedicated vendor management teams, various departments typically share the responsibility, including Information Technology (IT), Sourcing and Procurement, Information Security, Data Protection Officer (DPO), Privacy and Data Governance, Legal and Compliance, Operations, Business Continuity, Finance, and Accounting.
Each department has a vital role to play in risk management. Collaboration, crystal clear communication, and visibility are crucial to minimizing risks and driving efficiency. Organizations must understand the potential impact of widespread vulnerabilities across their extended network, making visibility across all relevant departments vital. This comprehensive approach ensures a thorough third-party risk assessment, effective vendor risk management, and adherence to cybersecurity risk and data protection regulations.
While compliance requirements provide a starting point for managing third-party risk, it’s important to recognize that risk itself is dynamic and context-dependent. To evaluate risks effectively, organizations need to consider the broader implications on the entire organization, necessitating teamwork and cooperation among different departments. Instead of assigning sole ownership to a single department, encouraging collective responsibility can improve visibility and knowledge sharing, allowing for a more comprehensive assessment of risk and the implementation of appropriate risk mitigation strategies.
Implementing a comprehensive third-party risk management (TPRM) program can be a complex process, but it is facilitated by leveraging leading-edge technology and utilizing risk management frameworks, policies, and best practices. Technological advancements have paved the way for powerful privacy management platforms like OneTrust, which streamline efforts and ensure compliance with evolving data protection regulations and compliance requirements.
OneTrust can assist organizations in evaluating and onboarding new vendors more efficiently, measuring risk, tiering vendors, assigning owners, delegating actions, triggering third-party renewals, informing key stakeholders, and generating reports. However, correct implementation and ongoing management are critical to reducing information security risks and ensuring compliance with contractual obligations and data privacy regulations.
At The Data Privacy Group, we’ve developed an 8-step formula for success in implementing a Third-Party Risk Management program that incorporates risk management guidelines and standards:
Stakeholders always play an essential role in ensuring that third-party risk management is in place. By adopting a collaborative approach, implementing risk management best practices, and leveraging cutting-edge tools such as OneTrust, organizations can enhance their third-party risk management processes and effectively navigate the complexities of managing vendor risk and mitigating cybersecurity risks. Additionally, organizations should conduct due diligence processes to uphold contractual obligations and adhere to data protection regulations.
To create a culture of effective risk management, it is also crucial to provide staff with awareness training on third-party risk assessment, data privacy regulations, and risk management best practices. This helps foster a privacy-first culture within the organization and strengthens the overall risk management framework.
To learn more about The Data Privacy Group and how we can assist your organization in implementing robust third-party risk management practices, mitigating information security risks, and ensuring compliance with data protection regulations, please contact our friendly team today.