Editor’s note: The following is a sponsored blog post from OneTrust:
Building trust throughout an organization requires working collaboratively across lines of the business and gaining interdepartmental, cross-functional visibility. Nowhere is that more important than each business unit’s network of suppliers and partnerships. Management of your third parties and their associated risks is paramount to the organization’s security posture and reputation.
There are three key reasons your third-party management (TPM) program may be struggling or not as secure as it could be.
- You’ve Built Silos
Every business seeks growth, and the more that occurs the bigger and better the results can be. However, a natural reaction to that growth is a new set of risk factors that will differ between business units, leading to an organic — albeit unwanted — silo effect.
While risk takes on different factors depending on department, it has one overriding theme: it’s inherent to the organization as a whole.
The owners of each risk domain need specialized tactics and processes to most effectively manage risk as it relates to their area of the business, such as privacy, security, ethics, or ESG. While many of those practices will be transferable, each domain has unique needs and capabilities, and often a risk language or criteria, making it very difficult for third-party management teams to translate a comprehensive profile across the business.
However, data is not always shared proactively between these separate risk domain stakeholders.
And thus, silos are created. Departments function with tunnel vision, putting specific weight on risks tied only to their core responsibilities. In doing so, there’s a severe lack of communication and knowledge sharing (and even cost savings) between departments contributing to the same goals: business growth and success.
- You Can’t See the Full Picture
The crux of third-party management is to ensure a business’s wider network, throughout its supply chain and business enablement tools, keeps its goods secure, and maintains compliance to support its organizational requirements as well as the needs of its customers.
Risk is fluid and changes depending on the context of the product or service being outsourced and must be evaluated in the context of business objectives: How does this impact the organization as a whole?
Since third-party risk is horizontal across most business functions, understanding those broader implications requires a collaborative, ongoing perspective rather than a function of check-point certification or compliance reporting.
The stakeholders who own and contribute to an organization’s TPM program need to take a collaborative approach to assess their vendors and understand each one’s true impact on the business. If third-party risk only lives in compliance or procurement, that collaboration aspect can easily be overlooked because it falls outside that business unit’s scope. Or, it is only evaluated during onboarding, compliance audits, or incident events.
Just because your business has chosen a model that is hybrid or decentralized doesn’t mean you still can’t pull all of that together for enterprise risk management and decision making.
Cyber risk should be seen as an essential function across all business units in a holistic manner — rather than exclusive to a particular department or group — in order to reduce the risk and events of non-compliance. The broader context of risk must be communicated and considered in compliance-based engagements to avoid critical, business-damaging information from being kept from the other departments.
- You’re Stuck in the Stone Age
Decision trees. Spreadsheets. Overextended resources. Many departments in your company are still treating the risk management protocols as if there are no alternatives. Historically, this function was one of box-checking and not true risk management. Businesses that continue down that path won’t be able to embrace the fact that risk management requires risk appetite.
The simplest and quickest way to grow your business is to deploy the necessary tools that will automate processes, specifically across the third-party landscape. For the sake of your own business and the third parties your company partners with, risk management and speed to market should be a top priority going forward.
The Road Ahead
As businesses scale to keep up with the demands of digital transformation, the reliance on third parties and the emergence of the digital supply chain is an innate part of almost every business function.
To build a successful third-party management program at scale that will enable decision-making at speed, you’ll need software designed specifically for the task. TPM software is a powerful tool that organizations can leverage as risks evolve within cybersecurity and privacy domains — but also as other risk domains move to the forefront, such as environmental, social, and governance (ESG) as well as ethics and compliance. In doing so, it’s critical to choose a software provider that can scale to the breadth and depth of the changing third-party risk landscape.