Ensuring that you complete an annual vendor risk assessment correct can build the foundation for lasting business relationships. LogicManager’s Vendor risk assessment solution can help you in meeting your needs.
Not all vendors are created equal; inherently, some vendors are more critical to your day to day operations and others pose a greater risk to your business. You can outsource processes, but you can never outsource risk. In today’s rapidly evolving environment, the importance of conducting consistent risk assessments on each of your vendors is greater than ever before. Conducting annual vendor risk assessments allows you to accurately identify third party threats to your organization, setting yourself up to be better protected from incidents and ultimately, success.
Potential Risk of Vendor Risk Assessments
Failing to perform vendor risk assessments on a recurring basis will make the information you collected unreliable; without knowing new information about vendors, it’s impossible to determine if they should be deemed more or less critical. Based on their varying degrees of criticality, there are different actions that must be taken. Otherwise, all of the risks the vendor poses to your organization have the potential to materialize.
There are a variety of risks that vendors can pose to your business, including:
Cybersecurity risk: You vendors may store your clients’ sensitive information, and if a data breach were to occur at the point of your third party’s system, the blame falls onto you.
Reputational risk: If you trust your vendor to interact with your customers in a certain way and they fail to meet those standards, you’re ultimately the one receiving the customer complaint. The same thing goes if that vendor violates the law. At the end of the day, your reputation can be negatively impacted.
Financial risk: What happens if your vendor is in a significant financial crisis? Their lost revenue or even outstanding debt can affect your bottom line.
Operational risk: If your vendor shuts down their processes, do you know if your organization will be able to remain operational? This is an especially important consideration amidst today’s pandemic, making it increasingly valuable to perform vendor risk assessments annually if not even more frequently.
Achieve your Annual Vendor Risk Assessment with LogicManager
Quickly identify and resolve issues
Conducting annual vendor risk assessments allows you to identify an issue with that vendor and put in the necessary remediation plan before a risk materializes.
Stay up to date
Your vendor relationships are dynamic. Over time, a vendor’s risk level may change as the scope of services they provide or business model changes. With LogicManager’s vendor risk assessment solution, you can review and update your assessments on an ongoing basis.
Appropriately allocate resources
Make sure you aren’t under or over-representing the risk level of a vendor. Your time and resources are precious, and it’s important to know where you can dial back efforts and reallocate to areas where more attention is needed.
Here’s how LogicManager’s vendor onboarding solution package helps you work smarter, not harder:
Here’s what you can expect with LogicManager’s Annual Vendor Risk Assessment solution package:
Recurring tasks will help you streamline this process year over year by reducing the amount of time you spend managing the program.
Once you’ve updated a risk assessment, use our workflow to automatically kick off the process year over year, reducing overall time spent managing your vendor program.
Leverage our out of the box relationship scoring criteria on 7 different and customizable vendor factors:
Business Continuity Planning
Dependency/Ease of Replacement
Operations and Control
Relationship automation rules also help you to streamline your annual assessments by setting up criteria to determine a vendor’s criticality based on the questionnaire responses. The responses are then assigned a certain weight and are automatically scored to determine their overall risk.
Easily request in-depth due diligence information from more critical vendors as well as additional internal resources using these automation rules. This greatly streamlines your annual process and reduces manual work year over year.
LogicManager’s reporting capabilities offer a variety of report types, including:
Vendor Inventory by Risk Rating: breaks down vendors by their risk rating, showing scores to all risk factors.
Vendor Map: location-based, showing vendors by their risk level.
Count of Vendors by Folder: allows you to see how many vendors are at each level in the hierarchy.
All Tasks Report: use this to filter on the status of your tasks.
Open Tasks Due in the Next 90 Days: see which vendor questionnaires are to be completed in the next 90 days.
Overdue Tasks: identify which vendors have not submitted their questionnaires yet.
Request a Free Demo Of LogicManager’s Vendor Risk Assessment Software
Want to see how you can leverage LogicManager to complete your annual vendor risk assessments? Request a demo today to find out!
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