Red Flags to Watch Out for in Your Vendor’s Business Continuity Plan
This post has been revised for clarity and accuracy. The most recent updates were made on February 25, 2025.
Ensure your vendors are crisis-ready by recognizing these key indicators of weak continuity planning.
The interconnected nature of modern business means that your vendors’ operational resilience can, and frequently does, have an outsized impact on business operations. Case in point: 61% of companies experienced a third-party data breach or cybersecurity incident in the past year alone.
Take the global Microsoft outage, for example. Windows users were unable to access various applications and services, leading to significant disruptions in business processes across every industry, from airport terminals to shopping centers to banks across the world.
Smaller vendors may not have the broad-based impact of a Microsoft outage, but that doesn’t mean their organizational resilience or lack thereof won’t have an impact on your business.
At the end of the day, understanding your vendors’ business continuity plans and their ability to quickly recover from a disaster can have a major impact on your own business results and reputation.
That’s why regularly reviewing your vendor’s business continuity plans is essential. And to help, we’re breaking down the key red flags that might signal a weak or ineffective plan. These warning signs will help you spot risks early and protect your business.
What Is Business Continuity and IT/DR Planning?
A Business Continuity Plan (BCP) ensures critical operations continue during operational disruptions like natural disasters, cyber-attacks, or geopolitical issues. It covers IT, personnel, facilities, and supply chains and aims to ensure continuity of operations and restore essential functions quickly.
The IT Disaster Recovery (IT/DR) plan is more narrowly focused, emphasizing rapid IT system recovery. Ideally, organizations should include their IT/DR within their BCP. According to the Uptime Institute’s Annual Outage Analysis, 80% of major outages could be prevented with better management. Without a strong IT/DR plan, vendor failures can lead to downtime, data loss, and operational chaos.
Annual Review of Vendor’s Business Continuity Plans
Regularly review vendors’ business continuity plans and IT/DR plans to protect your business. Annual assessments help spot gaps, outdated strategies, and weak recovery measures before they become problems.
Common Red Flags in Vendor’s Business Continuity Plans
A vendor’s weak continuity plan can quickly become a crisis. Which is why it’s imperative to keep an eye out for these red flags, including:
Insufficient IT/DR Planning
Insufficient IT/DR PlanningExpect prolonged downtime when systems fail if a vendor’s plan doesn’t include strong IT disaster recovery planning. Minimal IT resilience means no business resilience.
Lack of Staff Training
Lack of Staff TrainingA plan is only as good as the people executing it. If employees aren’t regularly trained in recovery practices, expect confusion when a crisis hits.
Outdated or Untested Plans
Outdated or Untested PlansIf a vendor’s business continuity plan hasn’t been tested or updated, they probably won’t meet their recovery time objectives or understand how to operationalize the plan.
Poor Compliance Management
Poor Compliance ManagementCompliance tracking and remediation gaps can lead to regulatory issues and increased risk exposure.
No or Minimal Oversight of Fourth-Party Vendors
No or Minimal Oversight of Fourth-Party VendorsIf vendors fail to manage their own suppliers, your organization inherits the risk.
Misaligned Business Continuity Plans
Misaligned Business Continuity PlansIf a vendor’s BCP doesn’t specifically cover the products and services you rely on, it won’t protect your operations.
Imbalanced Sales vs. Business Tenure
Imbalanced Sales vs. Business TenureA vendor with unusually high net sales relative to their time in business may indicate unsustainable growth, financial instability, or potential risk of failure.
Undefined or Inconsistent Recovery Objectives
Undefined or Inconsistent Recovery ObjectivesDisaster Recovery Plans rely on two key principles: Recovery Time Objective (RTO) and Recovery Point Objective (RPO).
- RTO is the maximum time a business process can be down before causing serious disruption.
- RPO is the maximum amount of data that can be lost before the impact becomes unacceptable.
These metrics help quantify potential losses and set clear recovery targets. To minimize risk, your organization must work closely with vendors to establish realistic, achievable RTO and RPO goals that align with your operational needs.
Vendor Risk Doesn’t Have to Be a Guessing Game
According to a recent Gartner survey, 45% of organizations experienced third-party-related business interruptions in the past two years, so the need for Vendor Risk Intelligence has never been greater. By continuously integrating vendor risk data into your continuity planning, you can identify vulnerabilities, anticipate disruptions, and strengthen your overall risk posture.
Tracking vendor risks isn’t a one-time task—it’s an ongoing process. Regularly reviewing, evaluating, and integrating vendor risk data into your BCP ensures you’re not just reacting to disruptions but proactively mitigating them. The stronger your vendor partnerships, the stronger your business.
