The Issue of Reducing Delays in Third Party Risk Management

How to Reduce Delays in Third Party Risk Management : Most Critical Issues in TPRM

By: Beaconer, Jan 22, 2024

How to Reduce Delays in Third Party Risk Management : Most Critical Issues in TPRM

In the ever-evolving landscape of cybersecurity, businesses are increasingly relying on third-party relationships to meet their operational needs. However, with this reliance comes the critical task of managing the associated risks.

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It is also evident from the fact that in just a quarter of 2023, a whooping 6.41 million data records were leaked. Third-Party Risk Management (TPRM) is an essential aspect of cybersecurity that aims to protect organizations from potential threats originating from their vendors.

Despite its importance, several challenges can impede the efficiency of TPRM processes, leading to delays and increased vulnerability. In this article, we’ll delve into some of the most critical challenges in TPRM and explore practical solutions to reduce delays.

Primary Causes of Delay in TPRM

A delay in implementing effective TPRM program can have consequences ranging from non-compliance to overlooking key potential risk markers. Here we discuss some of the primary causes of delay in TPRM

1. Delay in Pre-Assessment Request Submissions

Inaccurate or incomplete submission of pre-assessment request by the business teams can lead to delays in initiating the assessment process. For instance, a business team might omit essential details or submit incomplete forms.

2. Lengthy Questionnaires

Sending overly complex or extensive questionnaires to vendors can hinder prompt responses and elongate the process of third-party risk assessment timelines. For instance, a vendor will definitely take longer to complete a questionnaire which has 1000 questions.

3. Vendor Responsiveness

Getting a timely response from vendors is one of the most challenging parts of TPRM. Due to the complex and lengthy security questionnaire, vendors also need to coordinate with various internal teams to obtain responses, causing further delays. Vendors failing to respond or provide required information within stipulated timelines cause delays in assessment completion. For example, a vendor might miss deadlines due to internal inefficiencies.

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4. Communication Issues

Ineffective communication between internal teams and external third parties can lead to delays in TPRM processes. Miscommunication, unclear expectations, and a lack of timely responses can hinder the gathering of necessary information, the completion of risk assessments, and the implementation of risk mitigation strategies. For instance, Numerous follow-ups stem from the initial failure to ask the right questions.

5. Lack of Resources

Limited resources, both in terms of staffing and technology, can also contribute to delays in TPRM. Manual processes, limited personnel, and outdated technology can slow down the assessment and management of third-party risks, making it difficult for organizations to keep up with the dynamic nature of these risks.

6. Complex Regulatory Requirements

Navigating complex regulatory and compliance requirements adds another layer of challenge to TPRM. Adhering to various industry-specific regulations and global standards demands meticulous attention to detail and can lead to delays if not managed effectively.

7. Report Generation and Approval

Time-consuming processes involved in preparing, reviewing, and obtaining approvals for assessment reports can cause delays. For instance, prolonged review cycles may stall final approvals.

8. Remediation Procedures

Addressing and resolving identified gaps or issues between parties can take considerable time and coordination. Resolving identified gaps or issues between parties can take considerable time and coordination. For example, implementing security patches or upgrades may require negotiation and planning.

Strategies To Reduce Delays in Third-Party Risk Management

Since we have already discussed the possible causes of delays in TPRM and its impact on overall third party ecosystem efficiency. Nearly 49% of the C suite executives expect the number and size of  cyber events targeting their organization to increase manifold. Therefore, it requires a thoughtfully sculpted out strategy to reduce the potential delays in Third Party Risk Management.

1. Clear Guidelines and Training

Providing clear guidelines, templates, and thorough training is essential to ensure accurate and efficient assessment request submissions by business teams. Creating a standardized assessment form with required fields establishes uniformity, while conducting training sessions for employees on accurate form completion enhances their understanding of crucial submission aspects. This proactive approach empowers teams to navigate assessment processes effectively, reducing delays in third-party risk management assessments.

Example: Creating a standardized assessment request form with required fields and conducting training sessions for employees on how to fill it accurately.

2. Optimized Questionnaires

Crafting customized and succinct questionnaires tailored to various vendor profiles significantly expedites the assessment procedures. By streamlining questions based on vendor size, industry, or the specific services they offer, these questionnaires ensure relevance while minimizing unnecessary queries. This strategic approach optimizes the assessment process, enabling more focused evaluations without compromising on essential information gathering. For instance, a questionnaire for a software vendor might concentrate on security aspects pertinent to software development, while a cloud service provider’s assessment might emphasize data storage and encryption measures. Such tailored approaches enhance efficiency and accuracy in third-party risk evaluations.

3. Communication Expectations

Establishing precise communication guidelines and deadlines is pivotal to prompt vendor responses. Defining clear expectations, including response timelines for queries, helps streamline communication channels. Moreover, deploying automated reminders for pending responses ensures that vendors remain on track, fostering timely and efficient interactions. For instance, a communication charter can outline the maximum acceptable time for responding to queries, ensuring vendors understand the urgency and importance of timely communication. This proactive approach to communication management significantly minimizes delays, promoting effective collaboration and expediting the assessment process.

4. Efficient Coordination

Efficient coordination is pivotal in mitigating delays in communication within the assessment process. By establishing streamlined communication channels and designated contacts, organizations can significantly minimize delays. For instance, designating a singular point of contact for vendors streamlines communication, ensuring clarity and consistency in exchanges. Additionally, scheduling regular update meetings facilitates ongoing dialogue, mitigating potential bottlenecks and ensuring everyone remains aligned. This structured approach fosters seamless communication, reducing the chances of miscommunication or delays in information sharing, thereby expediting the overall assessment process.

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5. Automation and Standardization

Automation and standardization play crucial roles in expediting the assessment process. By automating TPRM report generation leveraging the AI and employing standardized templates, organizations can significantly accelerate report preparation and approval. For instance, implementing software capable of generating assessment reports from collected data streamlines the entire reporting process. Moreover, utilizing pre-approved report templates ensures consistency and expedites the approval phase, saving time and effort. This approach minimizes manual intervention, reduces errors, and enhances efficiency throughout the assessment, enabling quicker turnaround times and smoother approval processes.

6. Structured Remediation Plans

Identifying and addressing vulnerabilities is a crucial aspect of TPRM. Establishing a structured remediation plan with prioritized action items and timelines can help organizations and vendors address identified issues promptly. Regular follow-ups and progress tracking ensure that remediation efforts stay on track, reducing overall risk exposure.

Conclusion

Third-Party Risk Management is an integral part of an organization’s cybersecurity strategy, but it is not without its challenges. By proactively addressing issues related to pre-assessment submissions, questionnaires, vendor responsiveness, communication, resource allocation, regulatory requirements, report generation, and remediation procedures, organizations can significantly reduce delays in the TPRM process. Streamlining these aspects not only enhances the overall efficiency of TPRM but also strengthens the resilience of organizations against potential cyber threats originating from their third-party relationships. Embracing simplicity, clear communication, and strategic resource management are key steps in achieving a more agile and effective TPRM framework.

Author Bio

Nagaraj Kuppuswamy

Nagaraj Kuppuswamy is the Co-founder and CEO of Beaconer, an esteemed enterprise specializing in managed third-party risk using the cloud native AI based solution. With an extensive portfolio of accolades and industry certifications, Nagaraj stands out as a seasoned expert, boasting over 16 years of dedicated involvement in the field of Cybersecurity. Throughout the course of their career, he has predominantly focused on elevating the realm of third-party risk assessment.

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