Vendor Risk Management is increasingly at the forefront of risk management priorities for organizations of all shapes and sizes. In the drive to focus on their core competencies, many organizations today rely on hundreds if not thousands of partners, vendors and service providers to fill non-core functions. In practice these external partners have access to much of the same data as regular employees do. Commercially sensitive and proprietary data is often transmitted, stored and processed among a wide range of partner and vendor networks, outside the influence of any one organization.s internal controls and security policies.
Organizations today are under immense pressure to operate efficiently and manage risk effectively. Driving efficiencies and cost containment into their business has resulted in the reliance on hundreds, if not thousands of vendors as key partners to meet business objectives. Consequently, one area that is at the forefront of risk management priorities is vendor risk management - managing the risks involved with third-party vendors and the delivery of their products and/or services. Further, many financial services companies face specific regulatory guidelines with regard to their vendor risk management process.it.s no longer enough to perform initial due diligence. Companies must perform regular and programmatic risk assessments of the vendors that support key business processes.
Vendor risk management addresses the risks that could cause a disruption in product and/or service delivery or negatively affect overall business performance. Given the large number of vendors that organizations rely upon today, risk managers need to develop a prioritized list of strategic vendors that contribute significant business value and are difficult and expensive to replace. Putting in place a framework to periodically monitor and measure the effectiveness of vendor risk mitigation and controls will improve business performance and help to minimize disruptions resulting from a vendor.s inability to deliver.
Vendor Risk Management Challenges
- Understanding how vendor failure can impact business performance
- Enabling a top-down approach to risk assessment while allowing for individual controls group to assess at a more granular level
- Providing transparency to the state of the risk across the vendor community
- Risk ranking and scoring vendors
- Tracking issues that arise during the assessment process
- Integrating the vendor risk management program with your overall ERM activities
- Ensuring your vendors meet the regulatory requirements established by Federal regulators
Key OpenPages Capabilities for Managing Vendor Risk
- Easily configured to your methodology for risk management
- Aggregation of risk assessments
- Vendor risk rankings for follow-on assessment
- Vendor risk assessment surveys
- Issues and action items to facilitate remediation plans
- Management reporting
- Dynamic workflow for review and approval of assessments
- Easy-to-use, profile-based user interface
- Configurable vendor record templates
Vendor Assessment facilitates the annual data refresh by allowing vendors to review and update their information. Although the module can be used as a stand-alone tool, it integrates seamlessly with other CMS modules. Vendor ratings and other information are automatically incorporated in other elements of business continuity planning.