SMART VENDOR MANAGEMENT SOLUTION (SVMS)
Vendor Management is the process of developing, managing, and controlling relationships and agreement with multiple third-party vendors and contractors to control costs, minimize third-party risk exposure, and drive service excellence. Organizations need to ensure that the products and services provided by the third-party vendors are safe (Data Privacy) and comply with applicable laws, regulations, and standards.
Globalization has connected world economies; local companies can have direct or indirect relationships/partnerships with many domestic and international vendors. Supply chains are more complex than ever before; numerous vendors may carry over products before they get to the buyer. Business tends to outsource shared services to focus more on core business. Information technology, payroll, marketing, and Human resource are good outsourcing candidates. The most crucial point is that COVID-19 has boosted the outsourcing business, especially cloud computing.
The increase of third-party cyber security breaches due to COVID-19 is based on the following factors: –
People are working remotely.
Third-party solutions were implemented without proper security assessment.
Privacy concerns were neglected both by the customer and the vendor.
Disruption of the supply chain.
As vendor numbers rise, there is a high risk of data breaches. There is a dire need for a vendor management solution that will efficiently manage the growing number of vendors and mitigate or reduce the risk associated with vendors. To achieve these, vendor management solutions should be scalable and security focused.
Nowadays, organizations are using multiple third-party vendors/contractors to expand the business portfolio and improve customer experiences. This makes it more complex while dealing with multiple vendors and contractors. Those organizations who don’t have the capacity, investment support or skills to effectively manage the diverse number of suppliers, may result in:
the potential for a large (or public) cyber security breach, attributed to the cyber practice failings.
the lost value within commercial relationships
the increased risk exposure of supplier service failure or non-compliance, and
failure to adhere to contractual obligations.
Vendor security risk management – KPMG. (n.d.). January 6, 2022, from https://home.kpmg/content/dam/kpmg/ca/pdf/2017/10/vendor-security-risk-management-kpmg-canada.pdf
Vendor management: Realizing opportunities in the Financial Services Sector. Protiviti. (n.d.). January 6, 2022, from https://www.protiviti.com/CA-en/insights/wp-vendor-management.pdf
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