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Vendor Risk Management 101: Stay Safe

By November 18, 2018 No Comments
Miami Outsourced It Support

Every startup plans to develop quick international influence and start operating on a larger scale. But rapid growth comes with dependence on critical activities outsourced to an increasing number of partners and vendors. Globalization has fueled a dramatic rise in the third-party delegation. Therefore, you will also need to outsource significant processes of your IT business to a third-party provider. It could be to manufacturing networking equipment, upgrading your systems, compliance regulations and more.

Risks:

Earlier, companies use to look at vendors as only providers of goods and services. But in today’s context, it has become crucial to take your vendors seriously. It has become indispensable because you are outsourcing your core activities to a third party. Vendors will often have a remote access to your servers. Its employees may gain access to your online services if you didn’t change the passwords.  Therefore, you need to seriously consider the risks they might pose to your business. To justify this fact, the following points highlight the risks associated with third parties:

  • Breach of compliance regulations: Compliance regulation policies outline some of the best security practices for companies. You need internet security procedures to ensure that your sensitive data is not misused. This includes changing the vendor supplied passwords and reconfiguring the security protocols.
  • Data Security: Your vendor might have access to your data centers and company desktops. There is always a risk of data theft. Any sensitive information can be sold to your competitors or misused against you.
  • Excessive delays: An important risk factor which is often underlooked is excessive delays. You are depending on your vendor to provide you with the finished products and services on time. But he may miss the deadlines again and again. Your business may suffer a serious downtime and probably money if this happens.
  • Loss of intellectual property: Security policies in practice are required to protect your intellectual property. Without them, anyone from the third-party company may walk in the server room and steal an expensive piece of equipment. A vendor with access to your proprietary information can compromise it or present it as their own.

 Solution:

An effective vendor risk management (VRM) process can help you mitigate the associated risks with third-party products and services. A VRM ensures that the third-party service providers do not result in any negative impact on your business performance. A vendor risk management framework can be seen as a formal way to evaluate and mitigate third-party risk.  A program like that provides consistency plans for managing your vendors. It helps you to devise the best computer security practices to ensure a risk-free outsourcing.

How to identify the risks?

Whenever you need to buy products or outsource your IT services to third parties, you may want to assess each of them thoroughly. But, doing so is a waste of time. Only a few of them might cause you trouble. Therefore, the first step is to identify the importance of each vendor for your business. A networking equipment and desktop PC supplier needs less attention. But you should prioritize the risk management with your payment gateway service provider.

The next step is to consider the areas which your vendor is allowed access to. If the vendor is given access to your servers and data centers then, you need to ensure the reliability of your vendor. Also, you should engage with your vendor before negotiating the contracts. This practice will save your time by dismissing anyone who is not genuine.

Working with high-risk vendors:

Often, you will find that not all services and products that you require are available with a single vendor. In some cases, you might have to opt for a high-risk vendor. It can simply be because no one else in your area offers services that you require. In order to work with these suppliers, you need to develop policies to ensure that you are always protected. Again, the criticality of the services you need from a high-risk vendor should be accounted for, while making the policies. You must have risk mitigation as a part of your service level agreements (SLA). Also, you should frequently assess the performance of your vendor to ensure smooth working of your outsourced services.

With the great set of products and services, vendors add value to your enterprise. They help you focus on your business and helps in its expansion. But often, companies maintain an active oversight with their vendors. It is required to realize that when you outsource, a vendor performs a service or function on your behalf. On the contrary, if anything goes wrong,  from a security breach to service delays, your company bears the ultimate result. Varying levels of risk always remain with the company that offers the product or service. With an efficient and robust VRM program, you can track the risks and avoid deals with the illegitimate vendors.

Contact us today to learn about Bleuwire™  services and solutions in how we can help your business.