Vendor Risk Management (VRM) encompasses the systems and procedures that organisations use to identify, assess, and control risks from third-party suppliers. In recent years, several high-profile incidents, such as cyberattacks on trusted vendors, have underscored the importance of robust VRM. For example, supply chain breaches involving popular platforms and service providers have affected businesses globally, from airlines to finance firms. Such incidents highlight the risks inherent in relying on external parties. Although VRM is not new, the evolving digital risk landscape calls for updated approaches that safeguard companies, their clients, and their data.

An effective VRM programme covers the entire lifecycle of vendor engagement—from selection and initial due diligence to monitoring and, if necessary, offboarding. With VRM, organisations can identify and mitigate third-party risks, comply with regulatory standards like GDPR, and build reliable, mutually beneficial vendor relationships. In this article, we will discuss VRM’s essentials, explore best practices, and show how to build a robust VRM programme that protects your organisation.

• Dependence on Third-Party Services: Modern businesses often rely heavily on third-party services, especially cloud platforms like AWS and Microsoft Azure.
• Vendor Assessment: VRM is crucial for evaluating potential vendors, selecting reliable providers, and maintaining oversight. 
• Benefits of a Robust VRM Program: 
  • • Confident Partnerships: Enables organizations to partner with confidence.
    • Data Security: Ensures the protection of organizational data. 
    • Reputation Protection: Safeguards the organization’s reputation. 
    • Compliance: Helps meet regulatory and compliance requirements.