Vendor risk management is one of the most critical factors in cybersecurity programs for businesses because today’s business environment is increasingly globalized and supplier-reliant. As a result, third parties are becoming a major source for breaches of regulated data. Tightened regulations mean that organizations are susceptible to be liable for the security controls and actions of their third-party vendors.
While risk management has mostly taken center stage, companies are able to better manage their legal risks and maintain a higher competitive advantage if they have a vendor management program in place.
Vendor risk management enables organizations to assess supply-chain risk and the potential impact on business operations in line with their organizational risk tolerance. The process of vendor risk management enables organizations to assess, monitor and manage the risks posed to them by their third-party vendors.