Building trust with vendor management

If you’re working towards a stronger security posture to become an organization that’s worthy of customer trust, your vendors are going to play an increasingly important role.

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In this article, we’ll give you an overview of vendor management and walk through what a robust vendor management process looks like.

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What is vendor management in the context of security and compliance?

The term “vendor management” can be used in a variety of contexts. In the context of security and compliance, vendor management is all about managing and minimizing the risks that your vendors can pose to your business and your data.

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Just about any vendor you onboard could pose some security risk. This can include:

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• Software tools that integrate with your network
• Contractors you hire and grant access to your system or your facility
• Even vendors that you are specifically hiring for the purpose of security like a third-party access management system, security auditor, and so on.

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Why vendor management is important 

Vendor management is an important and ongoing part of strengthening your security posture. Nearly any vendor can unintentionally (or intentionally) open a pathway to your confidential data. Most of the time, this happens from simple oversight or neglect. A vendor might not be updating their software appropriately, or maybe they aren’t vetting their employees who are given access to your facility. You can’t always count on them to know when there’s a vulnerability and to address it appropriately, so vendor management allows you to stay on top of these risks.

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The role of vendor management in establishing trust with prospects and customers

Establishing trust with your prospects and customers starts with making a genuine effort to keep their private data safe. Vendor management is a large part of this. You want to be able to be transparent and explain to potential customers exactly how you’re keeping their data safe, and part of that “how” needs to involve minimizing risks from vendors.

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Consumers are becoming increasingly aware of third-party vendor risks because those risks have been responsible for several high-profile data breaches. For example, in 2021, hackers breached a consulting firm that was used by Major League Baseball and gained access to the private data of MLB benefits members. Situations like this make it critical for you to be able to address consumers’ concerns with a strong, strategic vendor management policy.

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Vendor management best practices

How do you create a vendor management strategy that keeps your organization secure? It will look different depending on your operations and security needs, but there are several vendor management best practices that can help you establish your strategy.

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Assess individual vendors in detail

The ultimate rule in vendor security is to never make assumptions. Before entrusting a vendor, you need to thoroughly evaluate their trustworthiness and security posture. Assess them individually to determine:

• What potential risks this vendor could bring to your business
• How the vendor is proactively trying to prevent security risks that impact your business
• The vendor’s history and reputation from a security standpoint
• The vendor’s own vendor management process and how they curtail risks that could come from the vendors they use

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Include security expectations in vendor contracts

When you sign on with a new vendor, make sure to leave nothing implied or unspoken when it comes to security. Include specific verbiage in your vendor contracts that details the vendor’s responsibility for taking reasonable action to prevent security breaches that could impact your business. You may also include specific recourse or penalties if the vendor falls below your security standards.

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Include software vendors in your continuous monitoring process

Continuous monitoring for vulnerabilities is an important part of robust information security. In your continuous monitoring practice, be sure that you’re monitoring not only your own system but any third-party tools that integrate with your system. These can introduce gateways into your system, and you have no knowledge of when and how they are updating their code, so it’s important to keep an eye on them on an ongoing basis.

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The vendor management process

So what should your vendor management process look like? Here are the key components of a strong vendor management process.

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1. Establish your vendor selection process

Before you can start finding the best vendors for your organization, you need to invest time in planning a strategic vendor selection process. Which colleagues in your organization are responsible for selecting vendors? What questions need to be asked of vendors? What standards do vendors need to meet? What security policies do vendors need to have in place? Define a list of criteria for each vendor. This should serve as the bare minimum list of requirements for every vendor; you can always expand on this list for specific circumstances.

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2. Set up a way to manage vendor data

Thorough vendor management needs to include a way to easily organize and track all information related to your vendors. Set up a type of vendor management database or system where you can easily maintain all this data. That includes vendor contracts, vendor assessment results, contact information for vendors, files on vulnerabilities you have detected and addressed with the vendor in the past, and so on.

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3. Evaluate and select vendors

Once you have all the systems in place to evaluate and track your vendors, it’s time to get started on your vendor selection. Use the process and the metrics you defined in step 1 to assess which potential vendors do and do not meet your standards.

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4. Finalizing vendor contracts

Once you have selected your vendors, it’s time to develop the contracts for them. Remember, these contracts should be specific about the responsibility the vendor has to prevent security breaches. You can have a template with clauses you included in each vendor contract, but be sure to include additional details and clauses based on the vendor and the role it will play in your security.

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5. Create a vendor review process

Finally, you need a system in place to ensure that vendors are meeting their obligations, security-wise. Establish a process for routinely reviewing your vendors to look for potential security risks and identify if a vendor is falling below your contracted standards. This can include a vendor auditing committee and a schedule of when to audit each vendor’s performance.

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Streamline vendor management with Vanta

As the leading trust management platform, Vanta helps teams proactively manage third-party risk by automating vendor discovery, risk assessment, and remediation. This way, teams can spend less time on vendor reviews and more time on strengthening their overall security posture.‍

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Learn more about how Vanta can help you streamline vendor risk management. Request a demo today.

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