Implementing Advanced Third-Party Risk Management Workflows to Mature Your Program

According to Gartner, 60% of organizations work with more than 1,000 third parties. With ecosystems that large, third-party risk management (TPRM) teams are faced with the challenge of developing workflows that account for complexity without hampering their efficiency or allowing unwanted risk into the organization. By implementing advanced third-party risk management workflows using their TPRM platform, teams can streamline and automate even the most complex processes and achieve faster cycle times and more consistent operations. 

Advanced third-party risk management processes that can be automated with a workflow platform include: 

Vendor Selection / RFx Processes 

The start of any third-party relationship begins with the vendor selection process, often initiated by a Request for Proposal (RFP), Request for Information (RFI), or Request for Quotation (RFQ), collectively known as RFx processes. These processes are crucial for identifying potential vendors to meet the organization’s requirements best.  

The RFx process typically involves: 

• Delivering a structured set of requirements and standards to potential vendors 
• Evaluating the responses 
• Selecting the most suitable vendor based on predefined criteria 

This process can be complex and time-dependent, requiring rigorous data collection, analysis and decision-making processes.  

Automation can streamline this process, significantly reducing the time and resources required. Automated workflows enable organizations to identify the best vendor much faster and with far fewer labor hours by systematically gathering and comparing vendor responses, highlighting discrepancies and ranking vendors based on suitability.  

Furthermore, automation in RFx creation and distribution also promotes transparency and fairness, as decisions are made based on a clear set of criteria, and every vendor is evaluated equally. This helps organizations make optimal vendor selection decisions, strengthens their compliance and reduces potential reputation risks. 

Key Takeaway: Automation integration in RFx processes streamlines vendor selection and enhances transparency, compliance and the overall integrity of your onboarding process. 

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Contract Risk Management 

Effective contract risk management means systematically mitigating the risks associated with third-party contracts. This encompasses the identification, assessment and monitoring of legal, financial, operational and reputational risks that can arise from unfavorable contract terms, non-compliance or the failure of a third party to meet their contractual obligations.  

Automated workflows ensure that all contracts are thoroughly assessed for potential risks before signing them. They can also monitor contractual performance continuously, alerting organizations to any deviations or potential issues in real time. This allows for swift mitigation actions, reducing the potential impact of contract-related risks.  

Moreover, an automated platform can provide a centralized repository for all contracts, ensuring transparency and easy access to essential documents. It can automatically track contract renewal dates, provide alerts regarding critical contractual milestones and generate comprehensive reports on overall contract risk. 

Key Takeaway: Automation in contract risk management optimizes efficiency and bolsters compliance, safeguards organizational interests and enhances the value derived from third-party relationships. 

Vendor Service Reviews 

Regular, systematic service reviews are essential for maintaining healthy vendor relationships and ensuring that the organization receives the expected value from its third-party engagements.  

An effective service review process includes periodic meetings with vendors to discuss performance metrics, contractual compliance, service issues and future plans. These reviews ensure vendor accountability and provide a platform for open dialogue and continuous improvement. By tracking the number of deliverables completed on time, the quality of the services rendered and the price of the vendor relationship, a TPRM workflow platform can make it much easier to determine which vendors are serving an organization’s needs and which need to make improvements or be replaced.  

Automated workflows can collect, analyze and report vendor performance data, transforming raw metrics into actionable insights. This enables organizations to objectively assess vendor performance, identify trends and make informed decisions based on real-time data.  

Moreover, automated vendor service reviews can monitor a third party’s compliance with Service-Level Agreements (SLAs), alert organizations to deviations and initiate corrective actions, ensuring continuous service quality and preventing potential issues before they escalate. 

Key Takeaway: Embracing automation in vendor service reviews enhances relationship transparency and optimizes third-party value, ensuring your organization’s third-party relationships are maximally productive and risk averse. 

Service-Level Agreement (SLA) Monitoring 

Service-Level Agreement (SLA) Monitoring involves continuously tracking and evaluating a vendor’s adherence to the service standards and performance metrics defined in the contractual agreement. This is essential to ensure that the services received align with the organization’s expectations and contractual stipulations.  

Automation plays a significant role in optimizing SLA monitoring processes. With automated workflows, organizations can understand which SLAs are assigned to each vendor, track service quality, detect deviations from agreed-upon standards and initiate corrective actions in real time. This ensures consistent performance and reduces the risk of SLA breaches, which can lead to service disruptions, financial penalties and reputational damage.  

Automated SLA monitoring also enables organizations to maintain a comprehensive record of vendor performance over time. This valuable data source can be leveraged to assess vendor reliability, make informed decisions about contract renewals and negotiate more favorable contract terms in future engagements. 

Key Takeaway: Using automated workflows in SLA Monitoring not only bolsters the accuracy and efficiency of the process but also reinforces vendor accountability, safeguarding the quality of service and maximizing the return on third-party engagements. 

Zero-Day Vulnerability Attack Responses 

A zero-day vulnerability refers to a software security flaw unknown to those who should be mitigating it, including the affected software vendor. These vulnerabilities can allow malicious actors to bypass a system’s access controls, leading to unauthorized access or significant data breaches.  

Preparing to respond to such vulnerabilities means implementing robust and responsive control measures. By facilitating real-time detection and alert mechanisms, automated workflows ensure the timely identification of these vulnerabilities, enabling more effective, more immediate mitigation actions.  

Once a zero-day vulnerability is detected, an automated system can initiate a pre-defined response protocol. This can include notifying the appropriate stakeholders, assessing the extent of the potential breach, kicking off a rapid assessment questionnaire to critical third parties, initiating corrective measures and reporting findings to executive management. Further, these workflows can automate the incident documentation and the response action. This step is crucial for audit purposes and for refining future risk management strategies. 

Key Takeaway: Implementing automated workflows in response to zero-day vulnerabilities ensures a rapid, systematic approach to threat response, helping organizations mitigate risks and protect their critical data promptly. 

Connecting Internal Controls to Third-Party Controls 

Measuring third-party controls against your internal control framework provides a comprehensive view of internal and external risks, enabling a comprehensive approach to third-party risk management. This process involves mapping your organization’s internal controls to the controls implemented by your third parties and measuring their effectiveness using targeted assessments.  

Automated workflows can continuously monitor the adherence of both internal and third-party controls to regulatory standards, contractual stipulations and organizational policies. This real-time monitoring enables organizations to identify and address any deviations or potential risks promptly.  

Moreover, integrating internal and third-party controls provides a unified view of risk across the organization and its third-party network. This facilitates a more informed and robust risk assessment and decision-making process. It enables organizations to identify potential risk interdependencies, mitigate systemic risks and strengthen overall risk resilience. 

Key Takeaway: Utilizing automation to align internal and third-party controls provides a unified perspective on risk management and bolsters the organization’s ability to anticipate, manage and mitigate risk. 

Conclusion 

As your third-party risk management strategy matures, you will have more opportunities to codify your workflows and eventually automate them using a third-party risk management platform. By taking the time to scale your automation with your operations, you can accomplish more complex, sophisticated processes with less resources and labor hours. 

ProcessUnity Third-Party Risk Management offers a highly configurable, easy-to-use platform that assists in identifying and assessing risks, managing and mitigating identified risks, and ensuring compliance across your third-party relationships. With built-in best practices and automated workflows, the solution can significantly reduce the time and effort required to manage vendor selection and service reviews, contract risk management, SLA monitoring, zero-day vulnerability attack responses and connecting internal and external controls. Learn more about workflow automation with our white paper, The Ultimate Guide to Third-Party Risk Management Workflow.