An effective TPRM program can reduce the impact of disruptive events and reduce a company’s overall risk exposure. However, TPRM offers far more benefits than just reducing risks. For example, businesses that have implemented a third party risk management program can evaluate and onboard new vendors more efficiently, getting the right tools into the right peoples’ hands – faster. Additionally, a third party risk program can give organisations the ability to monitor their third party relationships over time, identifying new risks as they arise, as well as measuring third party performance. There are numerous other reasons why third party risk management is important, including the ability to:
There is no one-size-fits-all approach to managing third party risk. Every company is different. Still, there are common measures that every business with a strong TPRM program must take. These measures include:
Implementation of a TPRM program is highly dependent on the size of your organisation and scale of your third party management program. With that said, many program implementations follow a common methodology. The Data Privacy Group’s Third Party Risk Management experts have created an 8-step approach to implement a Third Party Risk Management program:
We will import your existing third party list (if you have one) and configure the attributes you’d like to track for each third party. If you don’t have an existing third party list, there are a few methods we can use to identify and onboard third parties, such as conducting third party discovery assessments or leveraging a self-service portal for business users.
With dozens, hundreds, or even thousands of third parties, it’s difficult to know which matter most. We solve this problem by classifying vendors into different tiers:
There are many assessment standards or frameworks to choose from. There is no “right” assessment that works for everyone. However, there is likely a “right” assessment framework that works for your company and industry.
We’ll explore these standards and frameworks with you to ensure we land on the “right” framework for your company.
We will develop your assessment processes ensuring we consider the following questions:
How do we know when a new third party assessment is required?
Who should have the ability to launch a third party assessment?
How much effort do you want to put into validating assessment answers?
Who reviews the assessments?
Which assessment questions generate risks?
How are flagged risks aggregated and reported on?
Are follow-up assessments needed based on initial assessment responses?
How often do you need to reassess your vendors?
Will you conduct assessments yourself, or would an assessment exchange work for you?
For low-risk vendors: We suggest a third party self-attestation approach in which the third party “attests” to the accuracy of their answers.
For medium- to high-risk vendors: We suggest taking a more intensive validation approach, such as a remote audit or potentially an onsite audit.
Every TPRM program needs a way to calculate risks. Your risk methodology, along with your chosen control framework, must be defined internally by your organisation. Our Third Party Risk Management experts will work with you to choose a risk strategy appropriate to your needs.
As we build your different TPRM workflows, we will consider where we can apply automation to save time. We will look to add automation when:
Every business has unique third party risk management workflows. To streamline these workflows, we will focus on identifying the most repeatable processes and tasks. Then, begin configuring automation for these specific aspects of your workflows. As each smaller automation is added, efficiency will compound, and your team will reap the time-saving rewards.
Our Third Party Risk Management experts will work with you to define your reporting requirements and what information would be helpful to display in a dashboard.
The most straightforward metrics we often track include:
Third party risk management is not a static discipline. New threats and requirements are constantly emerging, which is why it’s so important to take a step back from time to time to determine if your program is still hitting the mark. We will work with you periodically to re-assess the program and fix any issues.
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