This article explains what is the Vendor Risk Management Lifecycle, how it fits in the Vendor Risk Management framework, and key high-level points to consider for your own organization.
What is Vendor Risk Management?
Vendor risk management (VRM) is an important component of any cybersecurity strategy. VRM is the process of assessing and managing the risks posed by vendors and other third-party organizations that provide services or products to an organization. It is one component of a broader supplier risk management strategy.
Vendor risk management includes everything from cloud computing services to software development and maintenance. With so many vendors in the mix, it can be difficult to keep track of all the potential risks. That’s why it’s essential to have a comprehensive vendor risk management plan in place.
What is the Vendor Risk Management Lifecycle?
Vendor risk management consists of several key stages that must be completed in order to ensure optimal security. This is the Vendor Risk Management Lifecycle.
Stages of the Vendor Risk Management Lifecycle
- Evaluation & Selection
- Risk assessment
- Risk mitigation
- Contracting & Procurement
- Reporting & Record-keeping
The Vendor Risk Management Lifecycle Stages in More Detail
The first step is identification; you need to identify which vendors are operating within your organization and what risks they may pose. Once you have identified the vendors, you must evaluate and select them based on their ability to meet your security requirements. This involves assessing their security posture, as well as conducting background checks and financial reviews if necessary.
After evaluating and selecting the right vendors for your organization, you must then assess their potential risks; this requires looking at their operations and processes in order to identify any possible threats or vulnerabilities that could affect your data or systems. Once these risks have been identified, mitigation measures can be put into place such as implementing processes for monitoring access control or encrypting sensitive data. The next stage is contracting & procurement; ensuring that contracts are up-to-date with current regulations while also ensuring compliance with applicable laws and regulations.
Finally, reporting & recordkeeping should be implemented in order to track vendor performance over time, as well as ongoing monitoring of vendor activity in order to detect any suspicious behavior or changes that may indicate a threat or vulnerability has been introduced into the system. Offboarding should also take place when necessary; this involves properly removing all data associated with a vendor before terminating their contract so that there is no residual access or information left behind.
Getting Started with Vendor Risk Management
It’s important for CISOs and other cybersecurity professionals to understand how VRM works in order to protect their organization’s data from potential malicious actors who may attempt to exploit vulnerabilities exposed through third-party relationships. By following the lifecycle steps described here — identification, evaluation & selection, risk assessment & mitigation, contract & procurement negotiations, reporting & record-keeping, ongoing monitoring, and off-boarding — CISOs can proactively manage vendor risk while also meeting regulatory requirements when necessary. Ultimately, having a robust vendor risk management plan will help ensure your organization’s security posture remains strong even when working with external vendors or other third-party organizations.