The importance of vendor offboarding: protecting your business

The Importance of Vendor Offboarding: Protecting Your Business

By: Beaconer, Oct 18, 2023

The Importance of Vendor Offboarding: Protecting Your Business


When it comes to onboarding a consultant, contractor or any other type of third-party vendor, businesses around the globe have certain types of measures, checks, and balances as a part of their usual third-party risk management practices. Businesses make sure that no stone is unturned before beginning a valuable partnership with third-party vendors. But when it comes to off boarding a third-party vendor, businesses often fail in having due diligence and care and wrap up the process in a haphazard manner. It may result in potential consequences and disastrous catastrophes for the businesses.

Here are a few things to consider when the vendor relationship is approaching an end.

Centralized Management System –

One key and fundamental factor is to have the centralized vendor management system put in place in order to have successfully managed third-party risk. A comprehensively managed third-party risk procedures will reduce the risk to the organization as it will help in regular review and auditing of the database of the vendors. When the relationship is about to end the centralized vendor management system will take care even of the tiniest details thus ensuring a smooth offboarding process.

Modernized Vendor Management Processes

Without a proper vendor offboarding procedures in place, businesses often run the risk of compliance violations, severe data breaches, lawsuits and reputation damage as the vendors will have unauthorized access to company’s sensitive information and IT environment.

To have a fruitful vendor relationship, it is pertinent to keep up to date and modernized vendor lifestyle management processes that must also include protocols on safe and healthy offboarding as well. Moreover if the businesses have large and complex contracts with third parties this becomes a thing of paramount importance.

Modernized Vendor Management Processes

Rescind The Access Given To Third-Party Vendors

The first and foremost even before offboarding is to annul the access given to vendors such as access to internal systems, telecommunication systems, virtual private networks, etc. it is necessary to keep track of all the systems (which will also enhance the work collaboration) and revoke access to everything just before the offboarding.

The organization may run a security and compliance risk if vendors have physical or virtual access to sensitive data. The other important thing is to annul the access to Saas apps of the business as it will not only leave the businesses with actual users only but also save the unnecessary expenses(by the virtue of increased users) and prevent the organization from splurging unnecessarily due to the increased traffic on Saas apps.

All the devices such as laptops, tablets, etc that have been provided to the third parties should be documented so that they can be safely demanded back at the time of offboarding.

Terminate The Physical Access To The Buildings

During the course of a vendor relationship with the company, the company usually has provided the physical access to the building and offices by the usage of building key, key fob, access codes, etc. though the access to sensitive data takes the central stage at the time of offboarding, blocking the physical access often takes the backseat. It is important to keep a tab on who and how the access to the physical premises is given. Once the relationship is rescinded it becomes pertinent to demand back from the vendor all the devices( key fob, access code) from the vendor. It is also needed to acquaint the happenings with the pertinent staff such as security personnel and receptionists and also to update the internal systems relating to access to physical premises.

Say of the Stakeholders

Each stakeholder of the business, be it legal, finance or security, should have a say and know-how of the vendor offboarding process.

The termination of the contract often includes transfer and deletion of data, full and final settlement, annulling access, etc. therefore involving the legal team becomes important to check the risks associated with the vendor offboarding. The involvement of the finance department is necessary to close the accounts pertaining to the relationship such as documentation, vendor profile, and the records of payments. Also the finance department can further initiate the critical examination of the post contract analysis to finetune the next upcoming relationship with the vendors.

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Compliant With the Terms of Contract –

Finally the legal team needs to assist the businesses in ensuring the compliance of the terms of the contracts to the fruitful outcome both for the vendor and the business. The compliance requirements like GDPR, CMMC, CCPA should be reviewed by the legal team to ensure that the vendor termination process aligns with the legal obligations. If there happens to be a case of data breach or theft, the onboarded legal team will be in a position to better dictate the terms of the agreements and contracts.


Lastly it would be in the benefit of the businesses if they devote due compliance and care to the offboarding processes as well just as they devote all their efforts when onboarding a third-party vendor.

Beaconer is the market leader in providing the third-party management services to businesses around the globe. We specialize in providing the risk assessment, smooth onboarding and fruitful offboarding of the third-party vendors. Beaconer uses its state of the art cloud native artificial intelligence platform to provide workable and practical solutions to risk management practices both at the time of onboarding and offboarding the third party. Contact us for more details.

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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