Organizations spend a large amount on human and financial resources in completing IT security, compliance and other important risk reviews of their vendors. Most organizations have created a vendor risk management program to complete and coordinate these reviews.
In the development of these vendor risk management programs, most organizations started capturing and documenting their reviews using Word or Excel. As these programs evolved, some organizations gradually implemented a vendor management governance risk and compliance (GRC) tool as an effort to simplify the process. However, a majority of these organizations learned that it takes time and money from the vendor risk management team and GRC consultants to configure the tool based on the organization’s business requirements.
These organizations found the cost of the GRC implementation budget increased based on the complexity of the vendor’s risk profiles such as foreign-based, high levels of sub-vendors and other factors. In addition, Chief Risk Officers and others created security/compliance review teams and processes to facilitate security and other compliance reviews which increased budget and resources.
As a result, organizations continuously aim for process enhancement and cost saving opportunities to address this expensive, but necessary vendor management program. For example:
- Assurance and validation responsibility mapping between the roles of first, second and third lines of defense.
- End to end process mapping and identification of opportunities for efficiency and cost saving.
- Ongoing analysis of tools effectiveness, efficiency and agility in fulfilling requirements.
- Integrated risk management approach design and execution.
- Security and compliance awareness trainings.
Overall, organizations are looking for ways to continuously improve vendor risk management programs effectiveness and efficiency.
Since vendor risk is a serious concern as organizations continuously evaluate their risk management program, here are a few considerations and questions to ask as you evaluate the maturity of your program:
- Can you use your GRC tool to effectively collaborate with all stakeholders for a timely review and monitoring of your vendor?
- Are you able to send your compliance/security assessment questionnaire through a secure portal and efficiently have it reviewed by the security/compliance management teams and validated by your Internal Audit Team?
- Are you able to integrate news, social media, or other major global event as it relates to your vendor for an ongoing monitoring and risk assessment?
- How agile is your current GRC platform in keeping up with your continuous business enhancement efforts towards integrated risk management approach?
- Are you able to create managed workflows to administer IT security/cyber risk assessments corrective actions progress effectively?
- Are you able to generate real time vendor risk management dashboard and reports for executive management for effective communication and action?
- Are you able to execute your vendor management policy, monitor compliance, conduct ongoing targeted training and validation?
- Are you able to have a comprehensive integrated risk view of your vendors?
- Do you have a process to share knowledge and learn from other’s efficiently?
- Do you have a process for ongoing evaluation of the GRC solution you are currently utilizing for efficiency and effectiveness?
- Do you have a well developed and validated change management process?
- Do you have a process to identify and integrate new or high level of risk assessment business requirements in the vendor risk management program? (Robotic Process Automation (RPA), analytical model, data governance, etc.)?
Given the increase of business complexity and risk level increase an integrated risk management process is key for an effective vendor risk management program. Also, ongoing assessment, validation and adjustment of the program is needed for an effective and efficient alignment to the organization’s goals and strategy.
Looking to implement GRC software? View our webinar on navigating the pitfalls and challenges of this process.