Vendor tiering is the cornerstone of a highly sustainable and resilient strategy toward third-party risk management. However, like every cybersecurity measure, it should be backed by the right framework. Knowing about the right providers showcases the greatest critical threat, which is an important component of potential third party risk management services. It is extremely crucial to reduce risk exposure and preservation of business continuity. Vendor tiering will enable the deployment of the rating system that would classify vendors and impose robust security requirements on them.
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Reportedly, around 60% of security professionals plan to implement supply chain security measures. Enhancing vendor risk management with vendor tiering allows companies to make data-driven decisions to improve cyber strength.
What Is Vendor Tiering?
Vendor tiering, which can sometimes be called a tiering assessment process or just a tiering assessment, is the method of recognizing suppliers and classifying them based on the dangers that they bring to an organization. The instant input is presented; it is entered the most secure way of tokens being used for different risks in the system anyway. Furthermore, the possibilities for breaches will be discussed; these exchanges entail: dealing with different vendors characterized by their distinct vulnerabilities and how they compare in severity of vulnerabilities. Vendor ranking tools like a TPRM software also helps in assessing the risk-value to the company. Subsequently, this process will assist you in tailoring your risk management strategies in a better way.
Why is Vendor Tiering Important?
Vendor tiering is critical as companies experience difficulties managing their Third Party Risk Management Programs among a growing number of suppliers. The need for more internal resources is keeping their new vendors from getting the necessary security attention. Consequently, the purchase contacts could be stronger, and the security units need to clean out avoidable inherent risks during digital transformation. This attack surface expansion that goes unmonitored adds more pressure on the security teams. As a result, it becomes even harder to manage risk assessments during onboarding.
Finally, the need for business processes to be scalable coincides with the existing cybersecurity resources being stretched too far away so that risk assessments are forgotten completely during onboarding. Since the chances of supply chain attacks are on the rise and 60% of sensitive data breaches are caused by third party hacks, companies’ top management are not able to put their vendor due diligence on top.
How to Tier Vendors for Effective Risk Management?
Here, there are two main strategies to categorize the vendors; let us check them out.
Manual Tiering
Manual tiering is the more preferred of the two methods as organizations tend to have more control over the classification process. The risk profile of each vendor differs across each business partner. The difference in the current situation is peculiar to the different levels of direct access to confidential resources and personal exposure. Manual tiering is a tradeoff that empowers businesses by letting them use personal criteria instead of accepting an objective tiering standard. So as to foster rational manual tiering, a security solution must be well-rounded with a constantly updating cybersecurity news feed to update users about possible events that could influence their vendors.
Questionnaire-Based Tiering
Questionnaire-based tiering is a very difficult and automated process where vendors are automatically categorized based on the efficiency of their security control strategy, as indicated through vendor risk assessments. Every vendor is given a tier by the computer program based on the things they have answered in forms and templates for security issues. This has the advantage of being a completely automated process, which goes a long way in solving the logistical problems of overseeing a comprehensive network of vendors. It is through this tiering process that the greatest benefit is achieved with regard to business continuity. Often, stakeholders bring forward their dissatisfaction with the process and contend with the determination of fourth party risk classification. Every manually changed tier should be motivated with a reason for the manual classification. In these cases, the staff will manually classify the respective decision.
Best Practices for Vendor Tiering
Many security teams already feel the tiering of vendors is a very tricky process that often causes uncertainty and may need to be more efficient. Likewise, they come up with the complete vendor list, and then they are capable of evaluating the initial vendor tiering assessment. Nonetheless, the security group has to keep on, document, and operationalize the vendor tiering process after they are through. Here are the best practices to follow throughout your vendor tiering process:
Evaluate Security Posture
To begin with, the business criticality criterion and the vendor security posture need to be integrated into the initial risk classification. During this step, the security team should:
- Take a look at the security questionnaires the vendors supplied to the company
- Utilize the data from the monitoring services of an external party to affirm the user’s claims
- Check whether the vendor has listed any security mishaps or data breaches
Continuously Monitor Third Party Attack Surface
All risk assessment processes are flexible; therefore, it is important to monitor the third-party attack surface as threats keep changing continuously. Vendors are companies, so the attack surface will keep getting bigger. Vendors’ security is the same thing that security teams should be monitoring as their own, for example, security:
- Weaknesses that come about due to common vulnerabilities and exposures (CVEs)
- Newly integrated public-internet-facing technologies
- Rehumanize Threat intelligence impacting the supply chain
Map Questionnaire Answers to Security Frameworks
The companies must ensure that the safety protocols used by the third-parties are consistent with the compliance agreements. A company offering customers a SOC 2 report should also know that vendor security should be in line with its security attestation. So, they should ask the vendor risk management team to explain:
- Which security systems does the organization apply
- The requirements the company must follow to
- Detail the security measures for vendors on the two sides
- Arbitrarily questioning each year
- Reply Mappings Within Periodic Updates
Conclusion
Therefore, vendor tiering is more than just a checklist of categories. It includes strategic frameworks that remain core to the business risk management framework. Adapting to this can help ensure good protection against the risks associated with vendors and suppliers.
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