What Are the Best Risk Management Best Practices?
Now that the global supply chain is becoming more complex, and companies are establishing relationships with an increasingly intricate network of partners, third-party risk management is imperative. We recommend to institute the following robust third-party risk management best practices to maximize your security:
• Categorize all vendors to prioritize the level of risk each poses
• Based on your contractual agreement with each vendor, determine key performance indicators (KPIs) that will be used to measure vendor performance, identify risks and mitigate them
• Use the identified KPIs to arrive at the risk level you are willing to tolerate and what represents grounds for termination of the relationship
• Map your supplier and vendor relationships to ensure that communications with all parties in the network are clear
Risk Management Practices During COVID-19
The global COVID-19 pandemic has resulted in significant challenges for businesses of all sizes. Nowhere is that more evident than in their dealings with suppliers and other third-party partners.
During the first few months of the pandemic as the coronavirus swept from continent to continent, bottlenecks in global supply chains meant that vital consumer products and medical equipment could not reach the people who needed them.
The following general IT vendor management best practices strategies can form a solid basic foundation that can minimize threats in the future:
• Delegate a person to be in charge of third-party management. This job entails a thorough understanding of the company and each vendor relationship, including compliance standards, contracts, monitoring, and risks;
• Examine each prospective third-party vendor in terms of the risks they pose and the internal controls they have put in place to address them. Although it should be unique to each vendor, this process should always involve risk assessment and prioritization as well as surveys and analysis of risk assessment data and identification, logging, and mitigation of risks.
• To every extent possible, focus on diversifying your supply chain to prevent an over-reliance on a single company or region of the world.
• Keep the lines of communication open with primary, secondary, and tertiary vendors and suppliers to maintain ongoing awareness, not only of compliance issues but of circumstances unique to each client that may be affecting a vendor’s timeliness, product quality, or other performance metrics.
At a time when businesses are reeling from factors they cannot control, they must use third-party risk management to minimize the chances of reputational damage, service interruption, financial loss, and noncompliance with regulations.
How TrustNet Can Help Scale Your Risk Management Program
The complexities of modern supply chains and vendor relationships mean that companies must devote significant levels of focus and attention to addressing and reducing the numerous risks these entities represent.
Navigating through vast networks of regulations, conducting timely and thorough internal and external audits, monitoring contractual compliance, and implementing training are vital information technology vendor management best practices that cannot be ignored or short-changed.
Hiring the top-tier risk management specialists from TrustNet can enable enterprises to adhere to the numerous internal and external requirements involved in understanding, managing, and minimizing third-party risks. In an era when stability, service continuity, and robust data security are key not only to customers but to a business’s very survival, hiring the services of a highly respected network security firm can brandish companies with the expertise they need to identify concerns and address them.