A successful third-party risk management (TPRM) programme requires enhanced collaboration between cyber security, procurement and compliance teams, and across the business. Find out how to make cross-team collaboration on TPRM work in practice.
Collaboration between Cyber Security, Procurement and Compliance teams across your organisation is vital if third-party risk management (TPRM) is to be rigorous and effective. Without widespread support for TPRM, your risk intelligence is likely to be incomplete and risk mitigation efforts are slowed down. In this article, we will explore how to make cross-team collaboration on TPRM a success – and highlight the many benefits for your organisation.
It’s never been more important for businesses to understand and mitigate the risks posed by third-party suppliers. In today’s digital world, every business is linked to a multitude of organisations by intricate and sometimes hidden digital connections. While IT security teams are fully aware of the need to identify these third-party relationships and the risks emanating from them, third-party risk management (TPRM) can only be truly effective if different teams across your organisation play its part.
Only those teams working directly with suppliers, vendors and partners are fully aware of the relationships between your business and those it works with. The success of your TPRM programme relies on especially IT security and TPRM teams, procurement and compliance teams to work closely together to ensure that the different units across the whole organisation do not employ shadow IT and vendors that they are not aware of.
TPRM requires data and insights from every area of the business. Without internal collaboration, your business cannot develop a complete view of third-party relationships and gain a clear understanding of the associated risks. If any critical vendors are overlooked, you could underestimate the aggregate risk to your business. That means IT security teams won’t be able to provide an accurate view of risks to senior managers to inform their risk-management decisions.
A lack of collaboration on TPRM can also lead to compliance issues. If teams don’t communicate regularly with legal departments, they may not understand the regulatory and contractual obligations associated with third-party relationships. Internal collaboration with the procurement team is also vital for vendor risk assessment and onboarding. If onboarding is impeded by poor collaboration, it can strain relationships with new vendors, strain the relationship between the IT security and procurement teams, and impact the business operations that rely on them.
Without clear communication, teams may view TPRM as burdensome and obstructive, rather than an essential part of safeguarding the business. A well-established foundation of internal collaboration is vital if your business is to scale up its TPRM efforts and safely establish new third-party relationships as it grows.
Ultimately, a lack of collaboration will seriously hinder your response to a security incident originating at a third-party supplier. A swift and coordinated response is required whenever a security breach occurs, so that financial, reputational and operational impacts can be minimised.
Now that TPRM has become key to the overall cyber security of any organisation, it’s essential that everyone plays their part. Here’s our advice on how to facilitate collaboration across your business.
In any organisation, people are busy every day focusing on their core responsibilities and priorities. Motivating people to make time for TPRM means pressing upon them its critical importance to the whole business. Your first step in improving cross-team collaboration on TPRM is therefore education and training.
Offer training on the value of TPRM to the business, and share case studies to demonstrate the importance of effective TPRM and the devastating consequences of failing to manage third-party risks. Show the benefits of working together to identify risks in an integrated way, including easing the burden on individuals, avoiding duplicated effort and enhancing the overall efficacy of TPRM.
Effective collaboration relies on clear and regular communication, ideally in the form of a TPRM Oversight Board. Create dedicated channels for cross-functional communication on TPRM, using Teams, Slack or other familiar collaboration platforms. Put regular cross-team meetings in the diary to discuss TPRM progress and challenges, and enable teams to share best practice. Ensure actions and findings are recorded centrally for key stakeholders to access. You could also create liaison roles to facilitate communication on TPRM between departments.
Because TPRM is central to the success of any organisation, it should be possible to align TPRM objectives with broader company goals, such as protecting data, improving customer satisfaction and reducing costs. These cross-functional TPRM goals can then be incorporated into individual objectives and performance reviews, ensuring TPRM is a focus for everyone and gets the attention it deserves.
Technology can play a key role in simplifying and improving TPRM, as well as supporting data sharing and lessening the workload for individual teams. Vendor risk management software enables you to create a single source of truth for data on third-party suppliers and can support collaboration between different teams.
TPRM has traditionally relied on supplier responses to risk-assessment questionnaires. IT tools can now automate and standardise these risk-assessment processes, saving time and improving accuracy. Continuous monitoring can be used to track risks constantly – rather than relying on periodic re-assessments. Advanced tools can also be used to identify emerging risks within your supply chain network, enabling you to take prompt and targeted mitigation action when necessary.
Improved collaboration cannot be brought about by processes and rules alone. You need to foster a culture of cross-team interaction, so that knowledge sharing becomes a natural part of working life. This can be encouraged by organising cross-functional workshops to address specific TPRM challenges. You can create communities to share TPRM expertise, experiences and resources.
To embed this culture of collaboration, new employees could be paired with experienced team members through mentoring programmes. This will help TPRM to be recognised as an integral part of your working practices from day one.
TPRM can only ever be effective if organisations have access to all available information about third-party suppliers, and the systems and processes they have in place. No IT security team alone can garner all of this information. That’s why managing third-party risks must be a whole-organisation priority.
Collaboration across teams is the most effective way to ensure TPRM programmes are comprehensive, worthwhile and effective. Every team must take responsibility, and by collaborating routinely they can help your business achieve the highest levels of protection against third-party risks.
Look out for future articles from Risk Ledger on how to advance third-party risk management to protect your organisation and its supply chain partners.
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