With more companies turning to third-party partners to help them expand their business capabilities without breaking the bank, there has been a surge in interest — and concern — about third-party risk management.
Before we dive into third-party risk management and all it entails, let’s begin by defining a third-party partner or service provider.
A third-party partner is a company or individual unaffiliated with your company that provides a service or technology tool as part of a contractual agreement with your company. They are paid for their services, but do not have a share, stake, or equity in your organization. In the IT model, third-party service providers typically help their clients enhance operational efficiency through the application of technologies aimed at helping to store, process, transmit, or secure data. Third-party services can include:
- Managed IT
- Managed Print
- Document Management
- Software-as-a-Service
- Infrastructure-as-a-Service
- Platform-as-a-Service
There are other models as well, but all of them entail partnering with a third party who will perform the service without your company having to provide manpower.
The Implications of Partnering and Third-Party Risk Management
Third-party service providers bring a host of advantages to the table, including lowered purchasing and maintenance costs of equipment, reduced burden on in-house staff, greater productivity, and scalability of infrastructure.
However, since your data security is only as good as your weakest link, third-party vendors can pose a significant risk if they don’t apply stringent security strategies. In fact, a recent report showed that data breaches due to a compromised third-party partner cost more than $200K over average. In part, this is due to third-party vendors’ increased access to organizational assets which makes them a target for hackers, but poor security protocols stemming from third-party actions can broaden the attack surface for partner companies.
To manage third-party risks, employ best practices and choose your partners wisely:
Best Practices for Third-Party Risk Management
There are many ways to protect your company from third-party risks, including:
- Monitoring the cybersecurity risk of your partners, including requiring ongoing monitoring, establishing key metrics for risk data quality, seeking partner with known quality control
- Reduce risk by training employees at all levels on cybersecurity risks and hygiene, preparing a disaster response plan, building a framework of clauses that specify data protection expectations, ensuring compliance with internal and external regulations.
- Identify key areas of risk, such as strategic, reputational, operational, transactional, credit, compliance, and privacy.
- Establish a culture of governance to mitigate corruption, build an open relationship with third-party partners, carry out due diligence on your third-party partner’s company ahead of contractual agreement, deploy anti-bribery and corruption monitoring to detect incidents
- Improve business resilience by having onboarding procedures for vendors, conduct surveys after unexpected occurrences, and include business resilience stipulations in your contract.
Of course, one of the best ways to minimize risks is to choose a partner with a solid reputation for outstanding service and integrity.
Trust Doing Better Business to Provide Solid, Secure Services
At Doing Better Business, we serve a variety of clients across many industries — from healthcare and education to legal and finance. Since 1973, we have aimed to develop and maintain long-term relationships with our clients, establishing a high level of trust and empowering them to expand their businesses further than they ever thought possible.
In fact, we are PROs Elite 100 certified — meaning that we are a top office imaging dealer in the nation, benchmarked for performance, training, and customer service and audited on an ongoing basis. This certification must be earned each year and is conducted by an independent third party expert to remove the possibility of bias.
What that means for you is that we have a tangible track record for delivering high-quality services, we maintain deep knowledge of current industry and technical knowledge — including cybersecurity, and we are committed to excellence at every level of our operations. In short, we are a partner that you can trust to provide a wide variety of products and services while maintaining a high level of diligence and oversight that assists in mitigating risks of all types.
Let us be your trusted partner. Contact a representative from Doing Better Business and learn how our products and services can help your business expand and thrive — safely.