Turning to automated vendor risk assessment helps entities streamline the process of vendor onboarding. But how can you make sure that you are using the right software that meets your company’s needs?
In this post, you will learn the following points:
- Why is vendor risk assessment important?
- How can automation improve the process of vendor risk assessment?
- How can you choose the right kind of software for automated vendor risk assessment?
Why Is Vendor Risk Assessment Important?
Vendors or outsourcing companies are extremely vital for a company’s success. For instance, it provides a strategic advantage, advancing expertise, and is cost-efficient.
However, along with these advantages also comes inevitable risks. Cyber risks, more particularly.
This is becoming more crucial as companies rely more on third-party connections. In turn, this also exposes them to fourth-party risks.
In fact, about half of 2017 data breaches involve third-party vendors. Not to mention is that it costs these companies an average total cost of more than $4 million.
True, vendors are important. But so does security along with the vendors.
So to help us combat these risks, conducting a vendor risk assessment helps.
How Can Automation Improve The Process Of Vendor Risk Assessment?
Automation is empowered by modern technologies. Which enables a more streamlined strategic process. It boosts the speed and accuracy of the assessment, for instance.
Why is it important to impose speed?
For one thing, unnecessary delays can cause your company to lose potential contracts. Perhaps it can lead you to lose new vital service providers.
So the value of your vendor risk management program proportionally affects the success of your vendor relationship. As a result, it affects the overall success of your business.
While applying automation, you can gain real-time assessments of your third and fourth-party vendors. Follow-up can also be done, when necessary.
How Can You Choose The Right Kind of Software For Automated Vendor Risk Assessment?
Here are some important factors to consider when choosing the right software for automated vendor risk assessment.
- It should be easy to combine with existing internal platforms and systems
- It should also have a self-service portal for your vendors
- Security should be a major part of the system. Especially because this system should be dealing with a lot of data.
On the other hand, it is also important to keep in mind two things:
- The size of your business
- The number of vendors you are working with
Meanwhile, it is also noteworthy to consider how scalable your business is. Perhaps you are planning to expand. Of course, this should mean more third-party vendor relationships.
So, can you look for software that can grow along with your needs? Would this software handle the more complex needs of your business?
In addition, this is mostly applicable especially in choosing a cloud-based product. With this kind of product in mind, you should opt for an easy installation. Not to mention that it should come with flexible pricing. For instance, you are expanding in the future.
Surely, choosing the right software should come with diligent research and planning. However, careful and data-driven decisions should lead you to better outcomes.