Surveys have shown that more than 2000 senior executives spanning over 43 countries have discovered that around 69% of the companies have experienced a crisis in the past five years. Almost every company today depends on its core services in the hands of its third or fourth party partners that will keep the functions moving. However, a company has greater control over its supply chain whenever things revolve around third party risk management services.
The Critical Role of Third Party Risk Management in IT Services
By: Beaconer, Jun 3, 2024
Content
Your IT firm is in charge of using and implementing the best risk management tools into the systems and protocols. Is the zero-trust approach or the routine security awareness training essential? Any form of cyber incident will undergo a series of breakdowns across the security systems, as it is the responsibility of the company here. As noted through the recent studies conducted through the Internal Auditors, more than 65% percent of the firms rely mainly on third parties while they are allocating 20% of their internal resources to the risk assessment techniques.
Therefore, due to the growth in machine-to-machine contact and digital transitions, it is important to consider the numerous breakdowns right out of the system. Whenever you are introducing a third party into your business operations, security turns out to be a shared responsibility. You require a partner who can do things at a similar level of security.
Overview of Third-Party Risk Management
TPRM, or third party risk management, is a risk management process that involves strict measures to mitigate risks using third parties, such as suppliers, vendors, service providers, and others. The real aim of TPRM in an organization is to ensure that the factors linked with the third and fourth parties never harm, damage, or threaten the internal and external operations of an IT business.
Incorporating the numerous TPRM practices is more than the company’s evaluations of the risks involved. It consists of knowledge of the relevant safety precautions and protecting a third party. It enables the company to identify where each of the third parties is performing the business that bears through the varied categories related to their practices to risk management.Also known as vendor risk management for mitigating third—or fourth party risks, it is an extensive management system that helps companies scale the risks they expose directly or indirectly.
Importance of Third-Party Risk for IT Services
The risks posed by the third or fourth parties should be assessed thoroughly with the help of the processes as follows:
Creating an Accurate IT and Security Landscape
The initial step to help secure the IT environment of your company and cybercrime, along with other incidents, takes the precise stock of every hardware, software, and other components included in the system.
The IT space of your company includes every asset you own or manage, along with the operations conducted by the third parties operating for your company. The workstations and devices included under the network infrastructure connect them with the software it is operating on between those under scope. However, there are peripheral networks and systems where identical assets come in contact with the external work environment, like remote or cloud deployments, irrespective of the level of control over the company’s mentioned assets.
Managing All Threats and Vulnerabilities
As reported by the study conducted by SecurityScorecard, the exploitation of reliable third parties continues to become a rising concern. As noted by the research, 98% of companies get affiliated through a third party that has experienced a breach.
The growing necessity of the TPRM practices for the complete and accurate accounting of different companies’ assets since it is important to identify the risks posed to you and your partners. TPRM aims at the third and fourth party risks distinctively with the risks that are essential due to the status. Risks form an expression of relationships between two variables in the security configurations, such as:
- Risks and weaknesses across the cyber defenses that are potentially exploited
- Threats or the actors and methods exploiting the mentioned risks.
The third-party threats and risks are extremely essential since they can get missed completely or not understood entirely. Irrespective of their limitations, they are extremely dangerous to your company, partners, and the clientele being shared between you.
Minimizing Consequences of Third-Party Risks
Two direct outcomes of cybercrime are linked to third-party risks leading to the loss of data and their inability to maintain uptime across online services and platforms. Both these would result in financial losses for your company with the third parties operating in it. The key data leads to the loss, indicating direct theft of the intellectual property with the details of the account used as a fraud. The downtime results in business loss along with expensive remediation and troubleshooting.
Whenever a contractor or a vendor stays dissatisfied with managing the incidents, they share their opinions with the effective strategic collaborations that restrict the talent pools for a long time. On the other end, TPRM can assist in mitigating the risks to reduce the effect of the operations of the incident that involves you strengthening your relationship across a massive reputation.
Nurturing a Culture of Awareness and Vigilance
TPRM is important for better awareness and streamlined training programs for contractors, staff, and other people who come into contact with the key systems, regardless of the employer.
You should know the accurate ways in which they interact with the systems. The precise option that TPRM offers will help you understand the devices, networks, and programs across every category of your systems. These key insights would empower distinctive team-based training modules emphasizing relevant and application information.
Conclusion
Business often aims toward the inevitable shift during economic uncertainties; however, proper third-party risk management should stay on the top of your mind. Although the resources are restricted here, it is important to continue supporting operational dependency to help prevent any type of financial loss and safeguard your business’s reputation.
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.
