Vendor risk management (VRM), or third-party risk management, is the management, monitoring, and evaluation of risks that result from third-party vendors and suppliers of products and services.
It’s a crucial initiative that needs to be put into place early, ideally during your evaluation of potential vendors and elsewhere in the procurement process. An effective VRM program ensures that these third-party vendors, products and services do not disrupt your business or cause financial or reputational damage.
Otherwise? You face serious risks: 53% of organizations have experienced at least one third-party-caused data breach, and the remediation costs average $7.5 million. That’s far more than the typical cost of instituting a vendor risk management program.
Chances are, your company outsources parts of its business to third-party vendors. Often, this means the vendors have access to intellectual property or sensitive information – internal or customer-related. Privacy and security are sensitive issues; most organizations require their vendors to uphold both internal standards and to abide by industry and government regulations.
Some of the…
