When the COVID-19 pandemic broke out, many businesses were compelled to put third-party risk assessments on hold to focus on adapting to the crisis’s new working conditions. As the pandemic spreads, investing in security measures is becoming increasingly important for firms’ short- and long-term survival.
Some businesses are better positioned to cope with the change than others, as seen by recent disruptions. However, businesses must keep in mind that the long-term benefits of a strong security program surpass the initial investment.
Evaluating third-party security risks is a vital component of business continuity and is essential to avoiding jeopardizing your reputation and investing money to fix the digital damage. So how do you include third-party risk in your business continuity program?
How to Include Third-Party Risk in Your Business Continuity Program
Most larger firms use a risk management procedure when introducing new suppliers to guarantee that all risks associated with that supplier are taken into account. As part of this process, the firm must examine all business continuity management (BCM) risks that the contract may entail and, if necessary, devise mitigation strategies. Third-party risk management and business continuity must collaborate closely to ensure that business continuity is addressed in all new contracts where it is required.
When integrating third-party risk management and BCM, there are three crucial things to keep in mind:
- Create a method for systematically evaluating all contracts that come into the organization, so that no important contracts are overlooked.
- Prepare a list of questions for external and internal stakeholders to ensure that all BCM risks are taken into account from both an internal and external standpoint. To guarantee that all contracts are carefully and consistently assessed, utilize a combination of qualitative and quantitative questions.
- Create a uniform set of mitigation standards for essential contracts. Contractual duties to guarantee suppliers have a BCM program in place, a specialized resource plan addressing that specific third party’s failure, and pre-arranged action plans with the supplier to form a collaborative response in the case of disruption are just a few examples.
More Tips to Consider When Including Third-Party Risk in Your Business Continuity Program
1. Know How Your Company Is Safeguarded by Third Parties
Companies should know if their third-party providers had to open new ports for remote workers, as this could increase the danger of cyberattacks. Perhaps a key cybersecurity employee was laid off, and the organization failed to perform the essential patching to protect customer data. After determining which third parties are most important to the business, organizations must also determine how well they are financially coping with the pandemic, as financial health may indicate whether third parties are willing to invest in cybersecurity measures.
2. Re-evaluate Your Business Continuity Plans
Executives must drive their security risk efforts from top to bottom when selecting whether or not to embark on third-party security evaluations. What is the explanation for this? When everyone is aware and engaged, third-party risk assessments function best.
Different areas of the business must play a greater role in the third-party risk management process than they would have done at any other point in the past when these businesses develop third-party risk management programs. It is crucial to get executive buy-in and then have their counsel and leadership permeate down across the organization.
The Importance of Third-Party Risk Management
Finding useful information about their vendors’ cybersecurity posture is a significant challenge for many organizations. It is tough to make informed decisions about whom to trust with confidential corporate data if you don’t have access to insightful data.
Businesses that are concerned about third-party cybersecurity risks should restate their commitment to helping critical vendors reduce the danger of embarrassing and perhaps costly breaches. If third-party suppliers fail to protect key business data, operate in unethical business activities, or expose the firm to cyber dangers, your business will be vulnerable to the same risks and could be held liable for third-party compliance penalties and other consequences.
Setting up efficient vendor risk management strategies and constantly monitoring your business partners’ compliance procedures is a vital need. With these processes in place, your company will be able to effectively establish compliance both for the enterprise and enterprise partners, enhance visibility into your partner network, and enhance your company’s overall cyber health.
Any business continuity plan must include third parties because they can be such an important element of a business continuity plan. While third-party risk management and business continuity are frequently separate responsibilities, combining them ensures a company’s resilience and ability to respond to significant disasters and disruptions.