Every organization uses third-party vendors, and most organizations use lots of vendors – which brings lots of vendor risk in tow. At this point most risk managers understand that they need to manage that vendor risk somehow, but the work to assess and manage those risks has escalated to the point that it’s almost impossible to do manually.
The answer, then, is to automate vendor risk management.
After all, a faster vendor assessment results in less risk exposure and downtime. Conversely, an inefficient assessment process leads to poor use of corporate resources. Slow vendor selection could cause downtime as the business waits for a new vendor.
A lengthy assessment process exposes you to unmitigated risks if you are already doing business with a supplier. Automation is the best way to overcome all of this.
What Is Vendor Risk Management Software?
Vendor risk management (VRM) software helps organizations develop and automate their vendor risk management program. It allows you to use a cyber risk management framework and software-as-a-service (SaaS) to manage risk more efficiently.
Vendor risk management software collects and manages vendor risk data to protect companies from data breaches and non-compliance that might happen thanks to those vendors. This software helps organizations assess and monitor all risks that can harm the relationship between a company and its suppliers.
An integrated platform can help them track requirements, findings, and workflows. In addition, automated reporting informs the dialogue between you and your third parties as you work together to mitigate identified risks and optimize processes.
An automated vendor risk management framework is often implemented as part of a broader governance, risk, and compliance (GRC) effort. Still, the software can also be used as a stand-alone product. When delivered separately, you and your vendor should integrate overall risk management solutions with other tools, such as supply chain suites and GRC software.
Third-Party Risk Management Tools
Third-party risk management (TPRM) software and technologies may be the solution to filling the gap for businesses in a burgeoning market. Besides offering solutions for vendor risk management (VRM), TPRM focuses on onboarding, risk analysis, and due diligence for businesses that collaborate with third parties.
Here are some of the best third-party risk management tools to manage supply chain risks and streamline processes.
UpGuard Vendor Risk
UpGuard, founded in 2012, provides a cyber resilience platform to help manage IT business risks. UpGuard’s technologies assess an organization’s IT infrastructure and predict the likelihood of future invasions and failures.
Upguard Vendor Risk, its TPRM technology, enables the assessment of outside businesses. The CyberSecurity Threat Assessment Report (CSTAR) score given to vendors allows the client organization to assess the amount of risk and take necessary action. This product also aims to comprehend the exposure to fourth-party risk through third-party evaluations.
UpGuard now has 66 ratings and an average rating of 4.5/5 stars on Gartner Peer Insights. The best reviews and ratings for UpGuard praised its simplicity in implementation, accessibility and user controls, and flexible pricing.
OneTrust debuted in 2016 with marketing compliance and privacy management solutions. The compliance monitoring provider offers Vendorpedia to assist firms in assessing vendor data flows to comply with various international standards. Vendorpedia provides privacy impact analyses, data inventory mapping, repair activities, and regular audits on a web-based platform.
Vendorpedia currently has 139 ratings and an overall rating of 4.5/5 on Gartner Peer Insights. The best ratings for Vendorpedia point to its accessibility and usability, the caliber of its technical assistance, and the automation of vendor management. In addition, OneTrust ranked as a Leader in the Gartner Magic Quadrant for IT VRM and Forrester Wave’s TPRM study in 2020.
Aravo Solutions was established in 2000 in response to the growing demand for supplier management. Aravo’s TPRM provides supplier information management (SIM) solutions with three product levels (Express, Standard, and Advanced) depending on complexity requirements. Other features include adding new vendors, automating risk analyses, and doing due diligence.
Aravo now has 21 ratings and an overall rating of 4.6/5 stars on Gartner Peer Insights. The features that received the best ratings were configurability, professional guidance in vendor risk assessment, and price and contract flexibility. In 2020, Aravo was positioned as a Challenger in the Gartner Magic Quadrant for IT VRM Tools and a Leader in the Forrester Wave for TPRM.
The Canadian company, Galvanize, provides a software platform for audit, risk, and compliance solutions. (Galvanize was acquired by GRC provider Diligent in 2021.)
The ThirdPartyBond solution offers tools for end-to-end third-party risk monitoring, vendor onboarding, automatic evidence gathering, and evaluation questionnaires. In addition, ThirdPartyBond monitors service level agreements (SLAs), keeps up-to-date intelligence feeds, and offers reporting features.
Galvanize now has 63 ratings and an overall rating of 4.4/5 stars on Gartner Peer Insights. The best reviews and ratings for Galvanize mentioned responses to product queries, integration and deployment, and improved efficiency.
One of the biggest businesses on our list and a publicly listed cloud solutions supplier is ServiceNow, which provides several tools for business operations. The IT workflow solutions from ServiceNow are excellent for businesses wishing to bundle services and provide GRC products independently.
ServiceNow’s vendor risk management tools within this product line include formal tiering, third-party security score integration, routine automated assessments, and escalation mechanisms.
ServiceNow VRM has received 84 ratings with an average rating of 4.3/5 stars on Gartner Peer Insights. Remediation, exception management, standard application programming interface (API), and contract efficiency received ServiceNow’s best ratings and evaluations.
What Are the Benefits of Using Third-Party Risk Management Tools?
Relying on a third party for essential business goods or services exposes a firm to reputational, financial, and information risks if something goes wrong with the third party. To safeguard a business from the risks of working with an outside vendor, third-party risk management (TPRM) is crucial.
The challenge, really, is the sheer range of risks that a third party might pose to your organization. For example, you might have suppliers providing raw materials, shipping services, website and cloud hosting, and more. If any of those suppliers suddenly stopped providing their goods and services, that could swiftly bring all sorts of disruption to your own business.
You need to understand what those risks are, and the disruption they might cause. In an age when large organizations could easily have thousands of third parties providing goods and services, TPRM brings speed and scale to your risk management efforts. Handling each vendor one at a time, with manual processes for onboarding, risk management, and monitoring, will never let you keep pace with the potential threat.
How Do You Perform a Vendor Risk Assessment?
Vendor risk assessment is part of vendor risk management (VRM). The VRM life cycle involves supplier identification, risk assessment, supplier onboarding, risk mitigation, and continuous monitoring. It’s also sometimes called supplier risk management, although both terms drive at the same basic idea: how companies manage their third-party relationships.
The vendor risk assessment identifies and assesses the potential hazards associated with dealing with a supplier. This is accomplished by evaluating the supplier’s vulnerabilities, security controls, values, objectives, policies, processes, and other security-related activities. Companies can then assess whether the benefits of working with a particular third party exceed the dangers.
Determine Which Risks Concern You
Before analyzing your suppliers, consider the most critical threats to your company. Cybersecurity, financial, regulatory, business continuity, and reputational risks are all considerations.
The specific risks you choose to track will depend on your organization and the objectives of your VRM program. Many organizations don’t keep track of all potential hazards, because not all hazards pose the same threat to you. (Some will pose no risk to you at all.) Advanced vendor risk management tools can be more specific about the risks they track, giving you a better picture of your company’s overall risk exposure from third parties.
Automate Your Vendor Assessment Process
You can automate the actions in those vendor risk evaluations. Review internal procedures to identify areas of your evaluation workflow and checklists that can be performed automatically.
Examples of automation include automatic flagging of risks, assigning risk owners, and triggering reassessments based on a new risk or expiring contract. In addition, your company can use automation to send out and collect due diligence questionnaires for each supplier.
Why automation? Because automating these activities eliminates tedious and manual tasks. Workflows and audit trails are appropriately documented. Assessments and questionnaires are saved and tallied electronically. All this information is accessible and searchable within the software program.
Make Responding to Assessments Easy for Suppliers
Getting a supplier to respond to an assessment can be laborious, so consider how you can make the process easier for your suppliers. Questionnaires should be straightforward without sacrificing the quality of information. Be available to guide vendors through the process, especially if they have little experience doing these types of assessments.
It is in your best interests to assure that your suppliers feel supported so they’ll give you honest and accurate feedback.
Automate Your VRM Program With ZenRisk
Once you’ve onboarded a vendor, keeping tabs on its security is only the beginning. You’ll need to send self-assessment questionnaires, obtain penetration testing results, continually update your vendor data, and more. And you need to be on top of changes in real-time; otherwise, your own organization’s security and compliance could be in danger.
Using ZenRisk risk management software to manage your third-party vendors takes the hassle out of vendor risk management. Continuous monitoring features ensure that you’re always on top of things. In addition, ZenRisk streamlines workflows, so you don’t have to manage reminders manually. It will even send out questionnaires and tally the results as they come in.
With ZenRisk’s integrated platform, all your governance, risk, and compliance activities can be managed from a single source of truth. Built-in templates ensure consistency, and dashboards deliver real-time metrics. What’s more, ZenRisk offers bidirectional integration with ServiceNow’s IT suite of workflow tools.
Compliance officers, quality managers, and supply chain professionals will be aligned and can focus on the big picture. Liberated from the tyranny of spreadsheets, your business will rise above the risks.
Schedule a demo today to see how ZenRisk can help you automate your VRM program!