In today’s business hustle, teaming up with external vendors is common. Picture this: you’re a company working with a bunch of vendors for software, services, and maybe even office supplies. It’s all good, but here’s the catch – these collaborations open up a door to potential security risks. Let me paint a picture with a couple of examples.
Remember the SolarWinds hack? That was a massive supply chain attack. Bad actors sneaked into SolarWinds, a trusted software provider, and injected malicious code into their updates. Now, anyone who downloaded those updates – including government agencies and big corporations – unknowingly let the hackers into their systems. It’s like inviting a burglar into your home without realizing it.
And then there’s the NotPetya ransomware, which spread through a Ukrainian accounting software update. Businesses worldwide suffered massive disruptions because they unknowingly welcomed a cyber threat when updating what they thought was a harmless program.
These real-life examples show the risks we face when our vendors’ security isn’t top-notch. Vendor Risk Management is our shield against such threats. And it’s not hard – it’s about doing things like checking out risks, setting up security rules, and being smart about who we team up with.
How
Think of implementing VRM like setting up a defense line for your digital castle. We’re not aiming for a fortress that’s impossible to navigate – we want practical, effective security measures that anyone can understand.
Identify and categorize your vendors
Let’s start by making a list of all the vendors we’re working with. Think software providers, service partners, or anyone who’s access to or stores your data. Once you have a list of your vendors, you need to classify them according to the Confidentiality, Integrity and Availability (CIA) of your data that is available to that vendor. Need help on this? Check out our other article on classification of information here (link).
Establish security controls
It’s time to set some ground rules. What kind of security measures should vendors follow? Think about encryption standards, access control and regular security check-ins. Create a matrix with the security controls on one side and the classification on the other side. This way you can ealisy set different controls (or requirements) for each classification level.
Due Diligence in Vendor Selection
Next step is to get an understanding on what security measures your vendors have taken to keep your data safe. If you have a lot of vendors, start with the highest classified. You can do this by reviewing independent audit reports. Examples of such reports are the SOC2 type 2 or ISAE3403 type 2 report. When a vendor does not have an independent audit report, you might be able to sent the vendor a lists of questions. For cloud suppliers you could use the Consensus Assessment Initiative Questionnaire from the Cloud Security Alliance (link), but if you need to more simple questionnaire you can check out our free templates.
Risks
Setting up Vendor Risk Management is crucial for securing your organization, but like any process, there are potential pitfalls that you should be aware of. Here are some common pitfalls to watch out for when implementing Vendor Risk Management:
- Incomplete Vendor Inventory:
- Failing to maintain a comprehensive list of all vendors and their roles can lead to overlooking potential risks. Regularly update your vendor inventory and ensure it includes all external parties, even those providing seemingly minor services.
- Failing to maintain a comprehensive list of all vendors and their roles can lead to overlooking potential risks. Regularly update your vendor inventory and ensure it includes all external parties, even those providing seemingly minor services.
- Lack of Defined Security Controls:
- Implementing Vendor Risk Management without clearly defined security controls may result in inconsistent or ineffective risk mitigation measures. Establish specific security controls for different types of vendors, considering factors like data sensitivity and the nature of the services provided.
- Implementing Vendor Risk Management without clearly defined security controls may result in inconsistent or ineffective risk mitigation measures. Establish specific security controls for different types of vendors, considering factors like data sensitivity and the nature of the services provided.
- Poor Due Diligence in Vendor Selection:
- Rushing through the vendor selection process without conducting proper due diligence may lead to partnering with vendors that pose significant security risks. Implement a thorough vetting process for new vendors, considering their security policies, past incidents, and overall cybersecurity posture.
- Rushing through the vendor selection process without conducting proper due diligence may lead to partnering with vendors that pose significant security risks. Implement a thorough vetting process for new vendors, considering their security policies, past incidents, and overall cybersecurity posture.
- Inadequate Communication with Vendors:
- Failing to communicate clearly with vendors about security expectations and requirements can lead to misunderstandings and non-compliance. Establish open lines of communication with vendors, clearly outlining your security expectations, and regularly check in to ensure ongoing compliance.
- Failing to communicate clearly with vendors about security expectations and requirements can lead to misunderstandings and non-compliance. Establish open lines of communication with vendors, clearly outlining your security expectations, and regularly check in to ensure ongoing compliance.
- Overreliance on a Single Vendor:
- Depending heavily on a single vendor for critical services creates a single point of failure and increases vulnerability to disruptions. Diversify your vendor partnerships to reduce dependency risks and have contingency plans in place in case a primary vendor encounters issues.
- Depending heavily on a single vendor for critical services creates a single point of failure and increases vulnerability to disruptions. Diversify your vendor partnerships to reduce dependency risks and have contingency plans in place in case a primary vendor encounters issues.
- Neglecting Continuous Monitoring:
- Failing to continuously monitor vendor security controls and compliance may result in missing changes in their cybersecurity posture. Implement automated monitoring tools and establish regular assessments to keep track of any changes in vendor security and respond promptly to potential issues.
- Failing to continuously monitor vendor security controls and compliance may result in missing changes in their cybersecurity posture. Implement automated monitoring tools and establish regular assessments to keep track of any changes in vendor security and respond promptly to potential issues.
By being mindful of these pitfalls and proactively addressing them in your VRM strategy, you can enhance the effectiveness of your vendor risk management program and better protect your organization from potential security threats.
Monitoring your security controls
When the following controls are setup correctly, you should be compliant for this topic:
- High risk vendors are regularly reviewed using audit reports or the Vendor Risk Assessment questionnaire.
- The definition of ‘High risk vendors’ is documented.
- Agreements with the vendor are monitored.
Related links
Cloud Security Alliance – CAIQ
Garnter – Definition of Vendor Management
Microsoft audit reports
Google Cloud audit reports
AWS audit reports