Now more than ever, organizations are outsourcing their operations, vendors, software, and more to save time, money, or gain an edge over their competition. As organizations turn to more and more third parties, the risks of seriously disrupting the business multiply, and supplier risk management is therefore becoming more and more of a priority. Along with the many benefits associated with outsourcing, it also introduces a greater responsibility for the organization to monitor its suppliers and third parties to ensure that everything is in order and that a supplier downtime can be held to. remote and processed in a timely manner. .
To understand what tools and strategies we need to effectively manage our suppliers and their supplier relationships, it is important to understand some of the most common risks associated with them.
Common types of supplier / third party risks
- Cyber security risk
Your third-party vendors are susceptible to cybersecurity attacks and hackers just as much as anyone. If they experience a significant cybersecurity incident, it can potentially affect your organization. That’s why it’s important to closely monitor your third parties and have a plan in place in case a violation or disruption of your vendor’s operations affects your own organization’s operations, revenue, or reputation.
- Compliance / legal / regulatory risk
Compliance risk is the possibility that a third-party vendor could impact your compliance with legal or regulatory requirements. If one of your suppliers is not complying with a regulation or neglecting to keep up with changing requirements, your organization can still be held accountable. It is important to remember that even though you may outsource your operations, you are still responsible for any liability.
- Reputational / financial risk
Suppliers can pose financial or reputational risk to your organization if they supply a defective component or fail to meet the deadlines you set. When you have a tight schedule, it’s important to make sure you hold your suppliers accountable to ensure they deliver products and / or services on time.
It was also widely seen throughout the pandemic and the Suez Canal incident that supply chain delays that affect manufacturers and distributors have a much greater impact on the reputation of their retailers though. known. These retailers experienced delays and shortages and then suffered an additional impact on their bottom line.
- Operational risk
Anything that disrupts the operations of your suppliers could subsequently disrupt your organization’s operations. For example, if your organization’s website or online services are hosted by a third party and that third party’s server goes down, your organization should have a backup plan in place so that you can resume operations without disruption. your own functioning. operations. It is essential that organizations have a program in place to anticipate potential operational disruptions and have a plan to respond and remediate risks quickly and effectively.
According to a 2016 study on third party governance and risk management (GRM), it was discovered that:
- 87% of respondents have experienced a disruptive incident with suppliers in the past 2-3 years,
- 28% faces major disruptions; and,
- 11% has suffered a complete third party failure.
Take control of your risk management related to third parties and suppliers today. Icebergs’ team of experienced management consultants, subject matter experts, software developers and solution architects provide a full lifecycle of professional MRI-related services including executive workshops, strategy sessions, implementation and integration and support services.
The publication Identifying Supplier Risks first appeared on Iceberg Networks.
*** This is a Security Bloggers Network syndicated blog from Risk Intelligence Academy – Iceberg Networks, written by Meaghan O’brien. Read the original post at: https://icebergnetworks.com/identifying-vendor-risks/?utm_source=rss&utm_medium=rss&utm_campaign=identifying-vendor-risks