Why Most Companies Are Getting Third-Party Risk Management (TPRM) Wrong and What You Should Watch For.

According to SecurityScorecard, a staggering 98% of organizations have a relationship with a third party that has been breached. 

In today's interconnected business world, effective Third-Party Risk Management (TPRM) is crucial for safeguarding your organization against potential threats. However, many companies are still falling short in their TPRM efforts. Here are some common mistakes and how to avoid them:

𝟭. 𝗟𝗮𝗰𝗸 𝗼𝗳 𝗗𝗼𝗰𝘂𝗺𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻: Many organizations fail to maintain up-to-date and comprehensive documentation of their TPRM processes. This can lead to gaps in compliance and increased vulnerability.

𝟮. 𝗜𝗴𝗻𝗼𝗿𝗶𝗻𝗴 𝗖𝗼𝗿𝗽𝗼𝗿𝗮𝘁𝗲 𝗣𝗼𝗹𝗶𝗰𝗶𝗲𝘀: Companies often overlook their own policies and standards when managing third-party risks, exposing themselves to unnecessary risks.

𝟯. 𝗜𝗻𝗮𝗱𝗲𝗾𝘂𝗮𝘁𝗲 𝗠𝗲𝘁𝗿𝗶𝗰𝘀: Without meaningful metrics, it is challenging to measure progress and identify areas for improvement in TPRM programs.

𝟰. 𝗣𝗼𝗼𝗿 𝗩𝗲𝗻𝗱𝗼𝗿 𝗜𝗻𝘃𝗲𝗻𝘁𝗼𝗿𝘆 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁: Not having a centralized and accurate inventory of third-party vendors can lead to oversight and increased risk.

𝟱. 𝗟𝗶𝗺𝗶𝘁𝗲𝗱 𝗚𝗼𝘃𝗲𝗿𝗻𝗮𝗻𝗰𝗲 𝗮𝗻𝗱 𝗥𝗲𝗽𝗼𝗿𝘁𝗶𝗻𝗴: Effective TPRM requires robust governance and reporting mechanisms to ensure all stakeholders are informed and engaged.

To build a successful TPRM program, companies should focus on building consistency in how they manage their vendors. Ensuring accurate third-party inventories and implementing strong governance and reporting practices would be a great start.

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