How to Prepare for a Vendor Management Exam
Increased third-party vendor outsourcing, high-profile security breaches, and expanding regulatory requirements have made Third-Party Risk Management (TPRM) more urgent than ever.
Auditors and examiners are paying closer attention to whether or not your vendors’ technical, physical, and administrative controls are being properly assessed. Are you prepared for a vendor management exam? Or does the prospect raise your blood pressure?
If you’re not ready, now’s the time to prepare. Don’t get caught being reactive — stay on top of TPRM tasks all year so that there’s no eleventh-hour panic.
The benefits of planning ahead
TPRM is an ongoing process. At any given point, you may be prompted to show your work to auditors. Your organization needs to have a clear understanding of vendor breaches, laws, and regulations. You also need knowledge of program implementation methodology and the best practices required to build and manage a TPRM program. Most importantly, document everything and make copies.
Some organizations use manually-updated spreadsheets in their TPRM programs. Those, however, may not be effective enough for regulatory scrutiny. A manual program may have missing or inaccurate information. Insufficient data can result in redundancies and the disorganization of a decentralized process.
Having your homework ready
A huge number of businesses are, understandably, now turning to vendor risk management (VRM) solutions that can create a standard reporting set configured to a firm’s individual business and vendor services. A VRM solution with extensive capabilities can simplify reporting on and maintaining your TPRM program annually. Robust features and tools will spotlight areas of concern with specific vendors. Comprehensive tracking helps identify issues and plan next steps.
VRM solutions can help with all the prep work required for a regulatory exam. You’ll stay organized, be knowledgeable, and have the means to fully cooperate with examiners.
It’s better for an organization to be prepared well in advance, rather than later when the exam is looming. Make sure you can quickly and easily access the proper documents and resources when the time comes. Unlike high school, you can’t rely on being a “good test taker,” so your homework has to be in place.