Vendor Economy Archives

Today’s IT-driven commercial landscape keeps supply chains up and running 24/7. But due to cyber risks and other inherent risks of transacting online, organizations are wary of working with third-party vendors.

Vendors must answer security questionnaires as part of their due diligence. However, a security questionnaire can have over a hundred questions covering anything from information security to regulatory compliance.

Imagine completing more than 20 of these vendor security checks yearly. When compounded, it could mean months’ worth of time spent away from technical work.

We’re presenting six strategies for answering vendor security questionnaires. These best practices can help with your bidding or business continuity compliance efforts.

What’s a Vendor Security Assessment Questionnaire?

A vendor security assessment questionnaire is a set of questions organizations use to evaluate vendor security posture. It’s important to avoid data breaches.

Vendors disclose essential details regarding their security controls and relevant management process by accomplishing them. It aids buyers in assessing the potential risks their partnership with the vendor entails.

Example: A buyer may require a cybersecurity provider to give crucial operational information as part of their risk assessment process.

To comply, the latter must submit their security protocols, policies, and tech capabilities by answering a custom-made survey.

6 Best Practices for Completing Vendor Security Assessment Questionnaires

Like vendor risk assessment questionnaires, completing a vendor security questionnaire is essential for forging buyer-vendor relationships.

Here are six strategies to improve your response time and accuracy.

1. Create an Answering SOP

Establish a standard operating procedure incorporating workflows, process owners, internal SMEs, channels, and repositories.

Publish this SOP in your company wiki or IMS to ensure widespread awareness and continuity in the answers.

2. Draw a Security Assessment Plan

A security assessment plan provides a structured approach to identifying your company’s security risks and areas for improvement.

As part of the vendor risk management program, it can be instrumental in answering security questionnaires.

Your plan must include the following:

Executive Summary
Objectives and Scope
Methodology
Roles and Responsibilities
Timeline and Deliverables
Reporting

3. Establish a Security Questionnaire Response Library

Be proactive. Gather and follow relevant compliance frameworks before receiving industry-standard questionnaires.

Having a bullet-proof structure in place helps your team/s finish the requirement quicker. Some common industry frameworks include SSAE/SOC I and II, ISO/IEC 27001, CIS Controls, CAIQ, and NIST SP 800-171.

4. Use a Collaboration Platform

A collaborative platform helps teams work on their designated questionnaire fields in real time. This way, your teams can prevent delays and ensure continuity across responses.

Your platform must have response editing capabilities, feedback sharing, and progress tracking mechanisms.

5. Delegate Tasks to SMEs

Placing subject matter experts (ex: from your sales team) in charge of answering specific questions will ensure timely responses.

SMEs can address questions and technical concerns faster and more accurately than other employees.

6. Use Automation Tools

Vendict’s AI technology allows companies to respond to vendor security risk assessments and security questionnaires faster.

Natural Processing Language (NPL) AI models can enable computers to comprehend and populate complex questionnaires faster than any human could.

Do you have a security questionnaire menacingly staring at you right now? Conquer it with Vendict. Contact us to find out how we can help your organization’s data protection processes.

Outsourcing is the new norm for businesses to scale and succeed. From IT service providers to manufacturing suppliers and marketing agencies, third-party vendors are crucial for companies to achieve their long-term goals.

This reliance, however, comes with substantial risks.

According o a recent Gartner survey, 84% of organizations experienced operational disruptions, and 66% had financial losses due to third-party risk incidents. This data highlights the importance of assessing your vendors to safeguard your business from disruption and financial harm.

In this blog, we’ll talk about vendor risk assessment and how you can effectively employ it in your organization.

What is Vendor Risk Management?

Vendor risk management ensures that the third-party vendors in your supply chain won’t jeopardize your business. This business continuity plan involves identifying potential risks and performing due diligence on vendor relationships.

You’ll check each supplier’s data, policies, and practices. Then, implement security controls to manage the risks identified and ensure real-time information security and regulatory compliance. For instance, you can employ data encryption and firewall protection if you discover you’re vulnerable to cyber risk.

Importance of Third-Party Vendor Risk Assessment

Nobody wants to work with someone with subpar quality control standards and performance. This management process helps filter out vendors who don’t meet your specifications.

Vendor risk management programs mitigate the inherent risk of vendor-related issues like:

Delays
Data breaches
Non-compliance with regulations and industry standards

To achieve this, you must first adopt a solid vendor risk assessment procedure.

Vendor Risk Assessment Checklist

Vendor risk assessment is like preparing for a road trip. Just like you wouldn’t set off without a map or GPS, a checklist is essential to navigate potential hazards and ensure you’re on the right track.

Here are 5 line items to incorporate into your vendor risk management checklist.

Vendor Details. List all your vendors with contact information, services, location, contract terms, and service level agreements. You can double-check your procurement and payment records to ensure everyone was documented.
Vendor Risks. Investigate the risks each vendor poses, including operational, financial, legal, reputational, and security risks. (e.g., a vendor with a history of data breaches poses higher cyber risks)
Vendor Due Diligence. Review vendor security, qualifications, quality standards, and legal compliance before entering a contract. Outline their responsibilities and dispute-resolution mechanisms.
Vendor Performance. Conduct periodic reviews of contracts, performance metrics, and risk levels. If you notice a vendor consistently missing deadlines, it’s best to reassess their contract or seek out a new vendor.
Risk Mitigation Measures. Use this to identify and address potential risks before they become major issues. Specify processes for regular security audits, data encryption, employee training, incident response plans, and other relevant measures.

No time to draft, employ, and review your checklist? Vendict is an AI-powered platform that can help expedite your vendor risk assessment process. You can automate responses to assessment questionnaires and collaborate with experts in no time.

Trust Vendict to handle your vendor management risk assessment while you steer your business to new heights. Book a demo today.

An example of a startup landscape infographic.

Vendors are the new oil, so be ready to manage them. Increasing landscape infographics of startup vendors is only the first signal.

How do you choose your doctor? I know only two types of people. The ones like me, trusting the system blindly. No research. I just choose according to the availability and closeness. And the ones like my partner, who always seek recommendations from trusted people. In general, such people work or have a close relative in the healthcare system. And they always know where to go.

Then I thought I had the same issue at work. I cannot see people in 2020 still performing impossible operations on Excel, while so many specialized tools exist online. Here, I was looking to find the best software, but there was no one to ask. How to start the search?

I always look first at the technology landscape. You know, these infographics showing the list of startups per domain (see image above). They can sometimes get crazy (the MarTech 5000 landscape references 7K vendors in one picture!). But the technological landscapes of IT companies reflect our Vendor economy.

Human barriers against vendors

It is against our nature to work with vendors. Here are the psychological barriers:

Trust. How do you know you can trust this company? The fact that they appear in a landscape is already a sign of recognition. And most of them have testimonials from trusted customers on their websites. Early adopters will jump quicker than others.
Classification. As humans, we tend to reduce and catalog quickly. Any company is simplified to a 3-word catchphrase. We may misunderstand the real opportunity they bring. Sometimes, new brands are even created only to enlarge fields of activities.
Locked in. Once we have invested in the collaboration (integration in the process, learning), there is a higher cost to switch. We feel this risk upfront, and it is always easier in the short-term to not switch. Therefore, we keep using Excel for everything until the pain is sufficiently high.

Vendors are always worth it

Let’s face it. Most of our company’s processes are relatively standard. It is quicker that way to recruit and on-board efficient employees with experience. So, it makes sense to have dedicated tools for each process. And these tools should be developed by external Vendors that can sell them to this market.

And it is the case already. According to Blissfully, the number of SaaS apps used steadily increases by ~30% year over year for all company sizes. A huge number. Companies are using best-of-breed apps. These apps excel in one specialization, managing or solving a specific pain point with high standards.

And it won’t stop. Artificial Intelligence technology gives vendors an edge, since it possesses large and varied data sets. And the open-source movement has simplified the integration of a huge number of software libraries during product development.

Vendor Management vs Vendor Risk Management

This new economy creates a complex ecosystem. A company can thrive only if it has the culture and processes in place to quickly find, select, and integrate the best vendors. These vendors can have off-the-shelf products in simple cases. Or they may require close collaboration for customized product development (think about a start-up in its early stages). The company must adapt to its needs and to the reality of the landscape.

Besides, a lot of vendor risks are created by this dependency. They can be business risks (service disruption, quality of service or product), regulatory risks (compliance, privacy, security), or financial risks (contractual, price, vendor stability). The recent remarkable privacy regulations (GDPR, CCPA) have also highlighted how the company is responsible for the personal data managed by the vendor. Setting programs to handle Vendor/Third-party Risk Management is now mandatory in financial institutions.

Companies want to be able to work with the best vendors at business speed and with responsibility. Also, innovative and specialized IT vendors are critical to simplifying this very critical pain point.

So, what is our doctor selection process now with my partner? She looks for the recommended doctors as long as they have reasonable availability. I used to look at vendors as interchangeable, similar to doctors. But I was wrong.

Vendors enable us to speed up processes and to create value. For each pain point, the best-of-breed vendors solve it with high standards. It requires our efforts to find them and work with them. We must set a clear vendor management process, overcome our psychological barriers, and manage all the vendors’ risks. It sounds like a lot, but this is where our economy is heading to, and well, it is exciting that collaboration wins.

Completing Security Questionnaires: 6 Best Practices for Vendors