June 22, 2026
Third-Party Risk Management Best Practices That Reduce Supply Chain Disruption
To reduce risk and prevent disruption, organizations must strengthen visibility, due diligence, accountability and resilience across their vendor ecosystems.
CDW Expert
Third-party ecosystems are expanding rapidly, and so are the risks they introduce. Today, more than a third of all cybersecurity breaches are linked to third parties, highlighting a critical but often overlooked vulnerability in modern enterprises.
Organizations often outsource services like payroll, IT support, cloud hosting and other functions, but that does not mean all risks and responsibilities are automatically transferred to vendors. Most of these partnerships operate under a shared responsibility model, and the boundaries are not always clear.
Combined with evolving threats such as AI-driven attacks and deepfakes, this creates a dangerous visibility gap. By focusing on continuous monitoring, improved visibility and integrated risk strategies, organizations can move from reactive vendor management to proactive third-party risk management (TPRM).
Frequently, this challenge is too great for internal teams to handle on their own. However, a trusted partner can help organizations reduce supply chain disruption, improve compliance and protect business continuity in a rapidly evolving threat landscape.
Third-party ecosystems are expanding rapidly, and so are the risks they introduce. Today, more than a third of all cybersecurity breaches are linked to third parties, highlighting a critical but often overlooked vulnerability in modern enterprises.
Organizations often outsource services like payroll, IT support, cloud hosting and other functions, but that does not mean all risks and responsibilities are automatically transferred to vendors. Most of these partnerships operate under a shared responsibility model, and the boundaries are not always clear.
Combined with evolving threats such as AI-driven attacks and deepfakes, this creates a dangerous visibility gap. By focusing on continuous monitoring, improved visibility and integrated risk strategies, organizations can move from reactive vendor management to proactive third-party risk management (TPRM).
Frequently, this challenge is too great for internal teams to handle on their own. However, a trusted partner can help organizations reduce supply chain disruption, improve compliance and protect business continuity in a rapidly evolving threat landscape.
Third-party risk has become one of the most urgent challenges facing organizations today. As enterprises rely increasingly on external vendors, suppliers and cloud-based services, their attack surfaces expand significantly.
According to the 2025 Security Scorecard Global Third-Party Breach Report, at least 36% of all data breaches originate from third-party compromises. For ransomware, the figure is 41%. And the true numbers are likely higher, since many organizations are either unaware of the third-party origins of breaches or choose not to disclose the source.
When outsourcing data storage and workloads, many organizations continue to incorrectly assume they’re also transferring liability — just as they mistakenly assume the same for outsourced payroll, IT support and cloud hosting. Most vendor relationships operate under a shared responsibility model. Contracts and associated service agreements typically establish scope-of-service boundaries that limit vendor liability, leaving organizations exposed if they do not properly understand the boundaries and implement and validate relevant controls.
The risk goes beyond breaches alone. Organizations face a convergence of pressures related to security and risk management, with regulatory scrutiny, board-level accountability, operational disruption and reputational brand damage all very high on most leaders’ lists of priorities.
In addition to exposing organizations to cybersecurity risks, third-party relationships can introduce compliance, financial and operational risks simultaneously. According to EY, operational risk now claims the top spot among company considerations when monitoring subcontractors, with 57% of executives who work on TPRM citing operational risk as a factor. And, according to Ncontracts, 73% of organizations are facing pressure to improve TPRM, with 38% identifying internal management and boards as the top source of this pressure.
For many organizations, TPRM is a highly manual exercise, with risk management teams relying largely on disconnected spreadsheets and numerous lengthy questionnaires. This lack of automation and tooling creates a significant visibility challenge. AI can help streamline repetitive due diligence tasks, using predictive analytics to uncover hidden risks as they emerge and helping organizations with continuous monitoring of key vendors. In fact, many organizations cannot fully answer these three simple, foundational questions about third-party risk:
- Who are our third parties (and fourth parties, and beyond)?
- What access do they have?
- What data are they handling?
Without this clarity, risk management becomes reactive and incomplete. And emerging technologies complicate the landscape further. AI-driven tools and machine identities are introducing new, often ungoverned, access pathways. These systems can operate autonomously, share data across environments, and even grant access to other systems, creating the potential for exponential risk growth. The World Economic Forum reports that 66% of organizations expect AI to have the most significant impact on cybersecurity over the next year, but only 37% have processes in place to assess the security of AI tools before deployment.
In this environment, one thing is certain: Ignorance is not bliss. To keep their own environments secure and avoid costly disruptions, leaders must seek to actively understand and manage their third-party ecosystems.
42%
Among financial firms, the percentage of breaches that now involve third parties; another 12% of incidents are fourth-party breaches
Source: Security Scorecard, “Defending the Financial Supply Chain,” May 2025
Third-party risk has become one of the most urgent challenges facing organizations today. As enterprises rely increasingly on external vendors, suppliers and cloud-based services, their attack surfaces expand significantly.
According to the 2025 Security Scorecard Global Third-Party Breach Report, at least 36% of all data breaches originate from third-party compromises. For ransomware, the figure is 41%. And the true numbers are likely higher, since many organizations are either unaware of the third-party origins of breaches or choose not to disclose the source.
When outsourcing data storage and workloads, many organizations continue to incorrectly assume they’re also transferring liability — just as they mistakenly assume the same for outsourced payroll, IT support and cloud hosting. Most vendor relationships operate under a shared responsibility model. Contracts and associated service agreements typically establish scope-of-service boundaries that limit vendor liability, leaving organizations exposed if they do not properly understand the boundaries and implement and validate relevant controls.
The risk goes beyond breaches alone. Organizations face a convergence of pressures related to security and risk management, with regulatory scrutiny, board-level accountability, operational disruption and reputational brand damage all very high on most leaders’ lists of priorities.
In addition to exposing organizations to cybersecurity risks, third-party relationships can introduce compliance, financial and operational risks simultaneously. According to EY, operational risk now claims the top spot among company considerations when monitoring subcontractors, with 57% of executives who work on TPRM citing operational risk as a factor. And, according to Ncontracts, 73% of organizations are facing pressure to improve TPRM, with 38% identifying internal management and boards as the top source of this pressure.
For many organizations, TPRM is a highly manual exercise, with risk management teams relying largely on disconnected spreadsheets and numerous lengthy questionnaires. This lack of automation and tooling creates a significant visibility challenge. AI can help streamline repetitive due diligence tasks, using predictive analytics to uncover hidden risks as they emerge and helping organizations with continuous monitoring of key vendors. In fact, many organizations cannot fully answer these three simple, foundational questions about third-party risk:
- Who are our third parties (and fourth parties, and beyond)?
- What access do they have?
- What data are they handling?
Without this clarity, risk management becomes reactive and incomplete. And emerging technologies complicate the landscape further. AI-driven tools and machine identities are introducing new, often ungoverned, access pathways. These systems can operate autonomously, share data across environments, and even grant access to other systems, creating the potential for exponential risk growth. The World Economic Forum reports that 66% of organizations expect AI to have the most significant impact on cybersecurity over the next year, but only 37% have processes in place to assess the security of AI tools before deployment.
In this environment, one thing is certain: Ignorance is not bliss. To keep their own environments secure and avoid costly disruptions, leaders must seek to actively understand and manage their third-party ecosystems.
Third-Party Risk: By the Numbers
54%
The percentage of IT leaders at large organizations that identify supply chain challenges as the biggest barrier to achieving cyber resilience
Source: World Economic Forum, “Global Cybersecurity Outlook 2025,” January 2025
49%
The percentage of organizations that review and assess third-party performance against contract standards; 24 % use independent rating services or tools to monitor third-party risk levels
Source: Gartner, “5 Key Insights for Third-Party Management Design and Governance,” October 2024
63%
The percentage of TPRM programs that operate with just one or two dedicated employees, who may manage as many as 300-plus vendor relationships; 13% have no dedicated staff at all
Source: Ncontracts, “The State of Third-Party Risk Management 2026,” March 2026
Third-Party Risk: By the Numbers
54%
The percentage of IT leaders at large organizations that identify supply chain challenges as the biggest barrier to achieving cyber resilience
Source: World Economic Forum, “Global Cybersecurity Outlook 2025,” January 2025
49%
The percentage of organizations that review and assess third-party performance against contract standards; 24 % use independent rating services or tools to monitor third-party risk levels
Source: Gartner, “5 Key Insights for Third-Party Management Design and Governance,” October 2024
63%
The percentage of TPRM programs that operate with just one or two dedicated employees, who may manage as many as 300-plus vendor relationships; 13% have no dedicated staff at all
Source: Ncontracts, “The State of Third-Party Risk Management 2026,” March 2026
- BUILDING A STRONG TPRM FOUNDATION
- CONTINUOUS RISK MONITORING
- TURNING TPRM INTO A BUSINESS ASSET
Effective third-party risk management begins with governance, clarity, structure and accountability across the vendor lifecycle. As the business world becomes even more digital, organizations are expanding their reliance on external providers — including cloud hyperscalers, Software as a Service (SaaS) providers and AI-enabled platforms — which can expand organizations’ attack surfaces. To establish a strong TPRM foundation, organizations must inventory their vendor ecosystem, map access and data flows, prioritize risks and standardize due diligence, all while validating vendor claims at every step of the process.
KNOW YOUR VENDORS: A comprehensive inventory of third parties is the obvious starting point for any effective TPRM program. However, many organizations lack a complete and current view of their vendor ecosystem. This gap is particularly pronounced for fourth-party and downstream dependencies. (According to Ncontracts, 58% of organizations report that they review their vendors’ vendors, but 35% say they only monitor especially critical or high-risk fourth-party vendors, and 26% do not monitor or assess fourth parties at all.) Closing this visibility gap requires more than maintaining a simple list of current vendors. Organizations must continuously identify, document and update all vendor relationships, including vendor-of-vendor dependencies.
MAP ACCESS AND DATA FLOWS: Understanding who has access to systems and how data moves between them is essential for identifying and managing risk. But the shared responsibility model complicates things. While vendors may provide secure platforms and services, organizations are often responsible for configuring and managing access within those environments.
According to Gartner, under half (46%) of organizations clearly define the roles and responsibilities associated with due diligence and risk identification. Misunderstandings and missteps here can lead to significant security gaps, particularly when organizations assume that vendors are managing access controls that remain their own responsibility.
ASSESS RISK BY CRITICALITY: Not all risks are equal. A third-party vulnerability that exposes low-sensitivity operational information may be a nuisance, while a gap that exposes customer data, financial systems or intellectual property could be catastrophic. Effective TPRM programs prioritize vendors based not only on whether a risk exists, but also on the potential operational and financial impacts if that risk were to be exploited. Ncontracts reports that most organizations classify 5% or less of their vendor pool as “critical,” enabling TPRM teams to focus their oversight activities on the relationships that matter most.
STANDARDIZE DUE DILIGENCE: Due diligence is a foundational component of TPRM, surfacing the information leaders need to evaluate vendor controls and risk posture. Common practices include questionnaires, control assessments, security operations center (SOC) reports and minimum requirements for insurance or certifications. However, in many organizations, due diligence processes are inconsistent, duplicative or cumbersome. Vendors may be asked to complete multiple questionnaires covering similar topics, while internal teams may struggle to interpret and act on the information collected. Gartner notes that organizations with streamlined due diligence questionnaires are actually far more likely to surface potential risks than those with a more exhaustive approach.
VALIDATE, DON’T ASSUME: One of the most overlooked risks in TPRM arises from overreliance on vendor attestations and assurance reports. SOC reports and similar documents are valuable tools, but they are frequently misunderstood, and they may not provide the level of assurance organizations expect. For example, a SOC report may attest to certain controls in place but also contain language noting that a subservice provider is used. If the SOC report indicates that the subservice provider is “carved out,” then there is no visibility over the subservice provider’s control posture, which can create hidden gaps in risk assurance that can only be uncovered with proactive due diligence.
Click Below To Continue Reading
By simply answering these three questions, leaders can build a foundation for a scalable third-party risk management program.
1. Who are our third parties (and fourth parties and beyond)?
Organizations first need a complete view of the vendors that support the business. This inventory should include not only direct relationships but also downstream suppliers and service providers that can impact operations, security or compliance.
2. What access do they have?
Third parties may connect to internal systems, cloud environments, credentials, privileged accounts or operational technology environments. Understanding this access helps organizations differentiate routine vendor relationships from higher-risk exposure points.
To minimize third-party risks, it’s essential to implement consistent and rigorous procedures throughout your vendor lifecycle. During onboarding, you create a secure foundation by thoroughly assessing vendors’ security and compliance. Offboarding, meanwhile, promptly revokes data and terminates system access, safeguarding your organization from potential threats.
3. What data do they handle?
Organizations must also understand what information third parties store, process, transmit or support. Vendors that handle regulated, confidential or business-critical data require stronger oversight than those with limited exposure.
Organizations that continuously monitor third-party risks catch problems sooner than their peers. But according to Gartner, only 29% of organizations re-evaluate changes in a third party’s risk profile, even though those that actively track third-party relationships are 64% more likely to surface risks early enough to take action. In addition to enabling real-time risk insights, organizations should monitor AI-driven threats and vendor-of-vendor risks, test their controls regularly and respond to risks as quickly as possible.
REAL-TIME RISK INSIGHT: It’s important to continuously monitor vendor relationships and agreements. Even after initial onboarding, a vendor might add new integrations, update its data safety policies or begin to use AI features that introduce new risks. CDW can provide policy expertise that combines technical skills, understanding of legal and regulatory frameworks, and strategic business insight.
Ideally, organizations will evaluate third-party risks continuously rather than merely during annual or biennial reviews. Emerging AI tools can conduct real-time monitoring at scale by analyzing news articles, financial data and social media activity, and then synthesizing those signals with internal operating data. Organizations can also use AI to simulate attack scenarios and impacts, uncovering potential outcomes that TPRM teams may have missed.
AI-DRIVEN THREATS: AI is accelerating third-party risk in multiple ways. Vendors are adopting AI-enabled tools and agents that may introduce new data access paths and governance challenges. CDW can offer advisory services to help you navigate governance challenges. At the same time, attackers are using AI to both scale familiar threats and launch new types of attacks. New AI models have reportedly uncovered numerous previously undiscovered vulnerabilities, and attackers are finding ways to use the technology for ever more sophisticated social engineering attacks. Leaders need to understand where vendors are using AI, what data those tools can access and whether appropriate controls are in place.
VENDOR-OF-VENDOR RISK: The interconnected nature of modern business makes managing and monitoring third-party risk extremely complicated, as every one of an organization’s vendors and suppliers has its own list of partners, each of which can introduce risks that cascade throughout the supply chain. According to SecurityScorecard, fourth-party risks account for 13% of third-party breaches and 5% of breaches overall. Effective TPRM programs need to look beyond the first layer of the vendor ecosystem to identify critical dependencies and ensure that key controls apply to vendor-of-vendor risks.
CONTROL VALIDATION: Assumptions can lead to disastrous results for TPRM programs. For example, when organizations outsource services to SaaS providers that in turn rely on hyperscalers, leaders may assume that the security controls of these cloud providers will protect them. In practice, however, these solutions are sometimes plagued by misconfigurations, excessive permissions and insecure integrations, which can lead to third-party data exposure. To prevent this, organizations must audit vendor cloud configurations and access controls, enforce least-privilege access and network segmentation, clearly define security responsibilities in vendor contracts and directly test controls where possible.
FASTER RESPONSE TIMES: Early detection reduces the eventual impact of risks. When leaders can surface third-party issues — such as a change in vendor scope, a security rating decline or a disruption affecting a critical provider — organizations have more time to investigate, escalate and respond. According to Gartner, 82% of organizations that actively monitor third-party relationships are able to quickly remediate risks before they have a material impact (compared with just 56% of organizations that do not monitor these relationships). Early detection can reduce downtime, limit data exposure and help leaders make faster decisions during a crisis.
Risk management is far more than just a compliance exercise. Effective TPRM can prevent problems before they happen, tie risks to business outcomes and even reduce some costs while improving efficiency.
TAILORED APPROACHES: To drive business value with TPRM, organizations cannot take a one-size-fits-all approach. Risk management must align with the specific budget, maturity and risk tolerance realities of the business. Internal TPRM teams can be fairly lean, with most organizations dedicating only one or two employees to the task, who may manage and monitor relationships with hundreds of vendors and suppliers. A trusted partner like CDW can help organizations tailor their approaches to ensure secure and sustainable onboarding and management of third-party relationships. This lets internal teams focus their oversight on the most critical risk vectors: vendors that support essential business functions and handle highly sensitive data.
AUTOMATION AND AI: When conducted manually, TPRM can be a very onerous and time-consuming exercise. Emerging AI tools can save risk management teams countless hours while limiting the need to add headcount. AI-enabled TPRM modules are an improvement on customized automated forms, as they use built-in intelligence for analytics. These tools can help provide full visibility into the vendor ecosystem, automated onboarding, continuous monitoring and contract management. They can also use predictive analytics to identify potential incidents before they occur and conduct scenario analysis to warn of possible “domino effect” risks. According to Gartner, organizations that deploy solutions and tools to identify, manage and mitigate third-party risks are more likely to remediate risks before they have a material impact.
RISK QUANTIFICATION: Risk quantification helps move risk management out of the world of technical and compliance concerns and into the realm of business benefits. Instead of merely labeling vendors as high risk or low risk, organizations can estimate potential exposure in dollars, prioritize remediation and make stronger investment cases. An effective TPRM strategy that quantifies risks has the potential to prevent costly operational disruptions, reputational damage and direct financial losses resulting from cyberattacks. Modern tools and workflows can also reduce costs associated with manual cybersecurity questionnaires and monitoring practices, while potentially lowering the cost of cybersecurity insurance premiums as well. According to Ncontracts, 85% of organizations see at least a moderate return on investment from their TPRM programs.
END-TO-END SUPPORT: From policy development to continuous monitoring, integrated services ensure holistic risk coverage. While AI-enabled tools are key to risk management, organizations also need governance, vendor tiering, control validation, monitoring, and incident response practices that work together to deliver the best possible results. During a TPRM program evaluation, CDW’s experts assess the effectiveness of current risk management practices, benchmark progress, score risk and deliver a maturity roadmap. More extensive engagements focus on design, deployment and execution, with CDW helping organizations to incorporate appropriate compliance requirements based on regulations and internal corporate policies. By working with a trusted partner throughout the TPRM lifecycle, organizations can address new risks as they come up, rather than reacting after the damage has already been done.
- BUILDING A STRONG TPRM FOUNDATION
- CONTINUOUS RISK MONITORING
- TURNING TPRM INTO A BUSINESS ASSET
Effective third-party risk management begins with governance, clarity, structure and accountability across the vendor lifecycle. As the business world becomes even more digital, organizations are expanding their reliance on external providers — including cloud hyperscalers, Software as a Service (SaaS) providers and AI-enabled platforms — which can expand organizations’ attack surfaces. To establish a strong TPRM foundation, organizations must inventory their vendor ecosystem, map access and data flows, prioritize risks and standardize due diligence, all while validating vendor claims at every step of the process.
KNOW YOUR VENDORS: A comprehensive inventory of third parties is the obvious starting point for any effective TPRM program. However, many organizations lack a complete and current view of their vendor ecosystem. This gap is particularly pronounced for fourth-party and downstream dependencies. (According to Ncontracts, 58% of organizations report that they review their vendors’ vendors, but 35% say they only monitor especially critical or high-risk fourth-party vendors, and 26% do not monitor or assess fourth parties at all.) Closing this visibility gap requires more than maintaining a simple list of current vendors. Organizations must continuously identify, document and update all vendor relationships, including vendor-of-vendor dependencies.
MAP ACCESS AND DATA FLOWS: Understanding who has access to systems and how data moves between them is essential for identifying and managing risk. But the shared responsibility model complicates things. While vendors may provide secure platforms and services, organizations are often responsible for configuring and managing access within those environments.
According to Gartner, under half (46%) of organizations clearly define the roles and responsibilities associated with due diligence and risk identification. Misunderstandings and missteps here can lead to significant security gaps, particularly when organizations assume that vendors are managing access controls that remain their own responsibility.
ASSESS RISK BY CRITICALITY: Not all risks are equal. A third-party vulnerability that exposes low-sensitivity operational information may be a nuisance, while a gap that exposes customer data, financial systems or intellectual property could be catastrophic. Effective TPRM programs prioritize vendors based not only on whether a risk exists, but also on the potential operational and financial impacts if that risk were to be exploited. Ncontracts reports that most organizations classify 5% or less of their vendor pool as “critical,” enabling TPRM teams to focus their oversight activities on the relationships that matter most.
STANDARDIZE DUE DILIGENCE: Due diligence is a foundational component of TPRM, surfacing the information leaders need to evaluate vendor controls and risk posture. Common practices include questionnaires, control assessments, security operations center (SOC) reports and minimum requirements for insurance or certifications. However, in many organizations, due diligence processes are inconsistent, duplicative or cumbersome. Vendors may be asked to complete multiple questionnaires covering similar topics, while internal teams may struggle to interpret and act on the information collected. Gartner notes that organizations with streamlined due diligence questionnaires are actually far more likely to surface potential risks than those with a more exhaustive approach.
VALIDATE, DON’T ASSUME: One of the most overlooked risks in TPRM arises from overreliance on vendor attestations and assurance reports. SOC reports and similar documents are valuable tools, but they are frequently misunderstood, and they may not provide the level of assurance organizations expect. For example, a SOC report may attest to certain controls in place but also contain language noting that a subservice provider is used. If the SOC report indicates that the subservice provider is “carved out,” then there is no visibility over the subservice provider’s control posture, which can create hidden gaps in risk assurance that can only be uncovered with proactive due diligence.
Click Below To Continue Reading
By simply answering these three questions, leaders can build a foundation for a scalable third-party risk management program.
1. Who are our third parties (and fourth parties and beyond)?
Organizations first need a complete view of the vendors that support the business. This inventory should include not only direct relationships but also downstream suppliers and service providers that can impact operations, security or compliance.
2. What access do they have?
Third parties may connect to internal systems, cloud environments, credentials, privileged accounts or operational technology environments. Understanding this access helps organizations differentiate routine vendor relationships from higher-risk exposure points.
To minimize third-party risks, it’s essential to implement consistent and rigorous procedures throughout your vendor lifecycle. During onboarding, you create a secure foundation by thoroughly assessing vendors’ security and compliance. Offboarding, meanwhile, promptly revokes data and terminates system access, safeguarding your organization from potential threats.
3. What data do they handle?
Organizations must also understand what information third parties store, process, transmit or support. Vendors that handle regulated, confidential or business-critical data require stronger oversight than those with limited exposure.
Organizations that continuously monitor third-party risks catch problems sooner than their peers. But according to Gartner, only 29% of organizations re-evaluate changes in a third party’s risk profile, even though those that actively track third-party relationships are 64% more likely to surface risks early enough to take action. In addition to enabling real-time risk insights, organizations should monitor AI-driven threats and vendor-of-vendor risks, test their controls regularly and respond to risks as quickly as possible.
REAL-TIME RISK INSIGHT: It’s important to continuously monitor vendor relationships and agreements. Even after initial onboarding, a vendor might add new integrations, update its data safety policies or begin to use AI features that introduce new risks. CDW can provide policy expertise that combines technical skills, understanding of legal and regulatory frameworks, and strategic business insight.
Ideally, organizations will evaluate third-party risks continuously rather than merely during annual or biennial reviews. Emerging AI tools can conduct real-time monitoring at scale by analyzing news articles, financial data and social media activity, and then synthesizing those signals with internal operating data. Organizations can also use AI to simulate attack scenarios and impacts, uncovering potential outcomes that TPRM teams may have missed.
AI-DRIVEN THREATS: AI is accelerating third-party risk in multiple ways. Vendors are adopting AI-enabled tools and agents that may introduce new data access paths and governance challenges. CDW can offer advisory services to help you navigate governance challenges. At the same time, attackers are using AI to both scale familiar threats and launch new types of attacks. New AI models have reportedly uncovered numerous previously undiscovered vulnerabilities, and attackers are finding ways to use the technology for ever more sophisticated social engineering attacks. Leaders need to understand where vendors are using AI, what data those tools can access and whether appropriate controls are in place.
VENDOR-OF-VENDOR RISK: The interconnected nature of modern business makes managing and monitoring third-party risk extremely complicated, as every one of an organization’s vendors and suppliers has its own list of partners, each of which can introduce risks that cascade throughout the supply chain. According to SecurityScorecard, fourth-party risks account for 13% of third-party breaches and 5% of breaches overall. Effective TPRM programs need to look beyond the first layer of the vendor ecosystem to identify critical dependencies and ensure that key controls apply to vendor-of-vendor risks.
CONTROL VALIDATION: Assumptions can lead to disastrous results for TPRM programs. For example, when organizations outsource services to SaaS providers that in turn rely on hyperscalers, leaders may assume that the security controls of these cloud providers will protect them. In practice, however, these solutions are sometimes plagued by misconfigurations, excessive permissions and insecure integrations, which can lead to third-party data exposure. To prevent this, organizations must audit vendor cloud configurations and access controls, enforce least-privilege access and network segmentation, clearly define security responsibilities in vendor contracts and directly test controls where possible.
FASTER RESPONSE TIMES: Early detection reduces the eventual impact of risks. When leaders can surface third-party issues — such as a change in vendor scope, a security rating decline or a disruption affecting a critical provider — organizations have more time to investigate, escalate and respond. According to Gartner, 82% of organizations that actively monitor third-party relationships are able to quickly remediate risks before they have a material impact (compared with just 56% of organizations that do not monitor these relationships). Early detection can reduce downtime, limit data exposure and help leaders make faster decisions during a crisis.
Risk management is far more than just a compliance exercise. Effective TPRM can prevent problems before they happen, tie risks to business outcomes and even reduce some costs while improving efficiency.
TAILORED APPROACHES: To drive business value with TPRM, organizations cannot take a one-size-fits-all approach. Risk management must align with the specific budget, maturity and risk tolerance realities of the business. Internal TPRM teams can be fairly lean, with most organizations dedicating only one or two employees to the task, who may manage and monitor relationships with hundreds of vendors and suppliers. A trusted partner like CDW can help organizations tailor their approaches to ensure secure and sustainable onboarding and management of third-party relationships. This lets internal teams focus their oversight on the most critical risk vectors: vendors that support essential business functions and handle highly sensitive data.
AUTOMATION AND AI: When conducted manually, TPRM can be a very onerous and time-consuming exercise. Emerging AI tools can save risk management teams countless hours while limiting the need to add headcount. AI-enabled TPRM modules are an improvement on customized automated forms, as they use built-in intelligence for analytics. These tools can help provide full visibility into the vendor ecosystem, automated onboarding, continuous monitoring and contract management. They can also use predictive analytics to identify potential incidents before they occur and conduct scenario analysis to warn of possible “domino effect” risks. According to Gartner, organizations that deploy solutions and tools to identify, manage and mitigate third-party risks are more likely to remediate risks before they have a material impact.
RISK QUANTIFICATION: Risk quantification helps move risk management out of the world of technical and compliance concerns and into the realm of business benefits. Instead of merely labeling vendors as high risk or low risk, organizations can estimate potential exposure in dollars, prioritize remediation and make stronger investment cases. An effective TPRM strategy that quantifies risks has the potential to prevent costly operational disruptions, reputational damage and direct financial losses resulting from cyberattacks. Modern tools and workflows can also reduce costs associated with manual cybersecurity questionnaires and monitoring practices, while potentially lowering the cost of cybersecurity insurance premiums as well. According to Ncontracts, 85% of organizations see at least a moderate return on investment from their TPRM programs.
END-TO-END SUPPORT: From policy development to continuous monitoring, integrated services ensure holistic risk coverage. While AI-enabled tools are key to risk management, organizations also need governance, vendor tiering, control validation, monitoring, and incident response practices that work together to deliver the best possible results. During a TPRM program evaluation, CDW’s experts assess the effectiveness of current risk management practices, benchmark progress, score risk and deliver a maturity roadmap. More extensive engagements focus on design, deployment and execution, with CDW helping organizations to incorporate appropriate compliance requirements based on regulations and internal corporate policies. By working with a trusted partner throughout the TPRM lifecycle, organizations can address new risks as they come up, rather than reacting after the damage has already been done.
