Why Third-Party Risk Is Critical to Every Business

Whether a start-up or an enterprise, you are probably working with multiple vendors, using their software and reliant on their systems. Yet while these external vendors provide invaluable services, they also introduce significant risk to your company’s information security. 

How do you know if your vendors are meeting required contractual, security and privacy obligations? 

If you don’t have processes in place to assess the risks these third parties pose, then your answer is most likely you don’t. And this is critical: You need to know the risks of working with third parties and that you can trust them — because if they go down, your business may, too. 

Assessing risk, however, can be incredibly complex. It may require tracking entities that operate across different industries and various countries. Or it may require supporting multiple regulatory frameworks.

Unfortunately, traditional risk management approaches that rely on manual processes and spreadsheets don’t scale well. And they certainly can’t support a third-party vendor network once it reaches a certain size: spreadsheets and email folders become overwhelming, ad-hoc processes and reporting cycles create confusion, and manual reviews lead to missed issues and trends. 

In fact, the more successful an organization is – and the more third-party vendors they work with – the more likely these antiquated approaches to risk management will fail. Take, for instance, one of Reciprocity’s customers. 

A Global Pharmaceutical Distributor with a supply network made up of hundreds of offices and thousands of vendors across the globe had more than 20,000 associates shipping over three million products every day — all while conforming to both foreign and domestic regulatory frameworks.

While every business involved in the Pharmaceutical Distributor’s third-party vendor network was committed to protecting their highly sensitive data, the company was concerned about potential risks to their information security. It realized that outdated manual tracking processes could not ensure the safety of its data and sought a vendor risk management solution that could. 

Enter, ZenGRC. Working with Reciprocity’s third-party risk management solution the company was able to streamline processes, make more strategic data-backed decisioning and better protect its information environment. 

• Increased actively managed vendors by over 800%
• Reduced internal labor expenditures
• Reduced burden of audits and reporting
• Established repeatable processes and streamlined workflows
• Improved end-to-end visibility of risk and compliance posture

Managing third-party risk is critical, no matter the size of your company or the industry. With vendor management processes in place that scale as your business grows and automatically assess risks and identify potential threats, your company can act before it’s too late.  

To learn more about how the Pharmaceutical Distributor transformed its InfoSec risk and compliance management organization, check out this case study.