Risk and Performance Tracking

One type of business risk? Vendor management.

Every vendor is different and the inherent risks are not equal. Some vendors are more important than others based on the type of service they provide or the number of services provided. It is the responsibility of the organization to define a process to assess each vendor relationship based on the risk they pose. Will the vendor have access to your customer information? If so, your inherent risk of the relationship is naturally high.

Another type of business risk? Lack of centralization and transparency.

Risk doesn’t just exist in a single department – it’s across every line of business in an organization. To mitigate their own risks, departments often conduct their own risk assessments and often rely on different naming conventions, processes or even methodology. Additionally, you may not have a full picture of your risk exposure because front-line managers and staff are busy with their own deliverables and risk management is lower on the to-do list. It’s incredibly challenging to aggregate and roll-up risk from different parts of the business to ensure complete organizational coverage.

Building a solid foundation is the first step

One of the essential duties of a business is to ensure they’re protected from internal and external risks. The financial and reputational penalties are simply too costly to ignore. Working with third parties adds another layer of risk to the equation. How can you ensure that your vendors share the same sense of urgency around risk to mitigate damage due to noncompliance?

Remember the home inspection analogy from earlier? Well, you’ll want to inspect the vendor just as you would your own home.

• Review your vendors’ information security practices and assess their cyber risk vulnerabilities
• Use residual risk assessments to log the findings of your inspection

With these two simple steps, you have built a foundation to decide if you are willing to work with this vendor or not and if their risks are manageable.

Once the vendor is a part of your network, you must continually monitor their continued success and SLA’s, if applicable. Again, much like your home, vendors also need regular upkeep. Develop an assessment to make sure they’re still providing value to you and ultimately, to your clients. If you find a something that needs adjusted, work with the vendor to correct it before the problem becomes to big to repair. 

Additionally, you’re not going to be able to truly mitigate risk with every department assessing their own vendors using spreadsheets. A modern risk management solution that aggregates risk from across the organization is the only way you’ll truly be able to accurately access the potential ramifications due to noncompliance – both from employees and your third party vendors.

Solutions

To help you build these foundational elements for successful risk and performance tracking, companies are turning to state-of-the-art software solutions to cost-effectively mitigate these potential risks.