How to Build a Realistic Cybersecurity Plan for Third Party Vendors

Since third party vendors are not under direct supervision, they are typically the weakest link of an enterprise’s IT security landscape. The largest organizations have tens of thousands of vendors, which makes managing this type of risk particularly challenging. For many organizations, it’s simply impossible to communicate with every vendor on a frequent basis about their security posture. At the same time, outsourcing to vendors is critical for business success, and delaying engagement with vendors while their security is reviewed could adversely affect an enterprise’s operations. Faced with such challenges, how do you go about developing a cybersecurity plan that effectively and efficiently manages third party vendor risk?

Traditional vendor risk management tools have included sending questionnaires to third parties, performing penetration tests, and even doing site visits to assess a vendor’s security posture. By themselves, these approaches don’t scale, and are simply not practical nor cost-effective for large enterprises who have thousands of vendors. In order to remain secure, these resource-intensive and time-consuming processes must be supplemented with a more scalable solution.

Below is a step-by-step framework for building a realistic vendor cybersecurity plan:

Create the Foundation for a Great Program

Laying the foundation for cybersecurity success requires having the right people, the right policies, and the most efficient tools in place.

The team that works on this program should possess a broad knowledge base that includes all relevant areas, including legal, cybersecurity compliance, business, enterprise risk, and cybersecurity. Having experts in different areas ensures that every factor is considered as part of this process.

While having a solid team in place is a good start, an organization must also develop robust policies that clearly describe acceptable levels of risk in every category. They should also put a plan in place for internal reporting and for vendor communication. This ensures that clear parameters govern any vendor assessment and helps to provide a path toward more comprehensive third-party security.

The final and most important piece of the vendor risk management puzzle is to have efficient tools to evaluate security risks. Many businesses use a platform that provides reliable, up-to-date security ratings of vendors. Using these security ratings drastically reduces the resources required to accurately and comprehensively assess critical vendors.
 

Understand Your Data

In order to effectively prioritize vendor risk management, organizations need to have a good sense of where their data lives and how it’s being used.

Every organization should determine which types of data are the most sensitive. Personal identifiable information (PII) and credit card data are typically the first things that come to mind, but things like intellectual property can also fall into this category for many businesses.

After these types of data are identified, the team should map out where the data is stored and who has access to it. The latter category is particularly important. A business should develop a complete list of every third party vendor who has access to sensitive data and note what kind of data it is.
 

Prioritize Vendors

Once this list of vendors is compiled, it should be ranked from highest potential risk to lowest potential risk based on the sensitivity of the data each vendor can access and other risk factors.

Your vendor risk management team should prioritize assessment based on the data each vendor has access to. Certain vendors may have access to more data than others, and some might have access to particularly sensitive information. The team should consider all variables, including regulatory and compliance concerns, in determining which vendors to flag for additional scrutiny.

 

Assess the Most Critical Vendors

The critical vendors identified in your triage must now be scrutinized for potential risk. Obtaining vendor security ratings can significantly reduce the time it takes to do these assessments; they also provide risk analysis based on individual vectors.

In some cases, it’s beneficial to supplement a vendor security rating with more traditional techniques like questionnaires, penetration tests, or on-site visits. This may be most necessary in cases where a vendor has access to a large amount of the most sensitive data or if a vendor’s security rating is in the questionable range. These types of tools can serve either as a further security test or as a check on the accuracy of the ratings.

Engage with Underperforming Vendors

Your vendors’ security rating can be used in a variety of ways to improve performance and resolve their vulnerabilities. One approach is to open a channel of collaborative communication with vendors and ask them about potential security weaknesses. In these conversations, you can express your concerns and try to determine appropriate measures to rectify the security weaknesses.

An alternative approach is to make compliance with more robust cybersecurity policies a requirement for continuing a vendor relationship. This may be appropriate in situations where a vendor’s vulnerabilities could have serious consequences for your enterprise and where potential alternative vendors exist. In such cases, it’s important to create an action plan by which the vendor agrees to make the improvements you require.

The goal of vendor risk management is to obtain concrete security improvements. Vendors must be pressed to eliminate any potential security concerns before they lead to serious breaches.

Use This Plan When Procuring New Vendors

In addition to evaluating current vendors, this kind of cybersecurity plan helps with assessing any new vendors under consideration.

An enterprise should take all of the information gained from the evaluation process and use it to mitigate potential risks before they arise. Vendor security ratings are a key component of this process. When looking at potential vendors and making a decision, their security rating should be an important factor. A vendor with a low rating represents a risk to your firm’s security.

Another use for security ratings is to put more detailed requirements into your SLAs with vendors. Essentially, with such an inclusion, your organization is requiring a vendor to maintain a certain specific standard of security as part of their contract. This gives them a strong incentive to maintain or improve their security posture over time.

By developing a dedicated team, having them map your most critical data, then using this information to determine the highest priority vendors, a vendor security team can target its effort on the areas of most concern. A realistic cybersecurity plan for third party vendors will help your organization identify a sub-list of vendors that warrant extreme scrutiny. From there, you can use security ratings from a trusted provider along with additional assessments to ensure that your data is secure.

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