Nowadays, most organizations depend on third-party vendors for a plethora of services to save costs and raise the quality of service. However, reliance on third-party vendors means that a third party can have access to confidential data and information about an organization, which can lead to serious consequences.
Organizations can counter the threat of vendor-related risks by implementing supplier risk assessment on their important vendors for better supplier risk management. Although the risk departments know the importance of third-party risk management, the supplier diversity teams may be less aware of this.
In this post, we will breakdown everything you need to know about supplier risk management and how to adopt it as a viable career option.
What Is Supplier Risk Management?
Vendor risk management is an evolving discipline in operation management for retailers, manufacturers, government agencies, and financial services companies, focusing on areas where the organization depends on suppliers to achieve their business objectives. Furthermore, the complexity and globally outsourced nature of supply chains, with optimization techniques to improve efficiency, expose supply chain weaknesses to even minor supply disruptions.
Although these models help organizations to reduce the overall cost and expand into new markets quickly, they open up the company to the risk of a supplier having a data breach, going bankrupt, closing operations, or even getting acquired.
Risks While Onboarding New Vendors
For vendor onboarding to be secure, you need to understand the risks associated with each potential partner. Furthermore, organizations need third-party risk management to have a solid security standard for governing vendors. You can keep your network safe from deliberate or accidental breaches caused by third parties by considering the following factors:
- How often security audits are performed.
- Credit history which includes liens and bankruptcies.
- The regularity of data backups.
- How security risks are handled.
- Maintenance of data security.
- The number and types of devices that are used for network access.
- Reliability of delivering orders and services.
You can use these details to assess each vendor’s risk level, and you can then tailor your security efforts to address the risk associated with each third party.
Most times, data breaches originate from third-party vendors. Data breaches from third-party vendors are not just frequent, they are also costly. Here’s a security checklist for supplier risk management that you should watch out for:
- The vendor has a security rating that meets your expectations.
- The vendor invests in data protection and information security controls.
- The security rating of the vendor has been benchmarked against their industry.
- The vendor uses access control like RBAC.
- The vendor has an IT system outline.
- The vendor is ready to complete a risk assessment checklist.
- The vendor does not have a history of data breaches.
- The penetration testing results for the vendor are acceptable.
- The employees of the vendor do routine cybersecurity awareness training.
- You visited the vendor’s location to check physical security.
- The vendor provides an IT system outline.
Role of a CISO To Ensure Secure Onboarding Of Vendors
The Chief Information Security Officer (CISO) is responsible for secure onboarding of vendors. Key responsibilities include:
Risk & Compliance
A CISO deals with how information security affects legal requirements, and they are also responsible for ensuring the organization is in compliance with both internal and external policies. Furthermore, a CISO helps build full-fledged vendor risk management programs and internal monitoring programs to make sure information security controls are functioning as they should.
The CISO of any organization is responsible for running penetration tests, vulnerability scans, web application security assessments, and several other technical operations. They help to ensure that the software and hardware configurations in both their organization and the vendor’s organization is always compliant with the company and regulatory standards.
Internal & Vendor Communication
CISOs not only manage the information security team, but they also communicate and play a role in several other teams. This is why they need to have good relationships and visibility into each vendor they are working with. They also must check in with their team members constantly to ensure all information security issues are addressed.
Training & Certifications
Before you can be a CISO, you will need to enroll for supplier risk management certification. There are several supplier risk management programs that you can join, among which the EC-Council Certified Chief Information Security Officer (CISO) certification program is one of the most notable.
In this course, you will gain the real-world experience that you need to flourish at the peak of executive levels of information security management. Here’s a quick snapshot of the areas you will cover in this course:
- Information security controls, compliance, and audit management
- Governance and risk management
- Strategic planning, finance, procurement, and vendor management
- Security program management and operations
- Information security core competencies