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Getting started with procurement
If you’re part of a startup or small company and haven’t thought about procurement just yet, chances are that you should. Procurement is the method by which businesses discover, review, and purchase goods or services from an external source. While larger companies may have dedicated procurement teams, it’s important for small businesses to understand the process and consider their approach to avoid challenges down the line.
Based on our experiences as a growing company, here are some perspectives and pointers on how to start thinking about procurement — perhaps even before you have a dedicated team. We’ll cover how to build a baseline process, points to look for in the evaluation process, and critical partnerships to help stand up a foundation for your procurement program.
When should I start thinking about SaaS procurement?
If you haven’t already started thinking about SaaS procurement, we encourage you to start as early as possible. This helps avoid situations where your company ends up with a significant amount of tech debt — such as too many tools (or even tools that have overlapping functionality), distributed ownership, or scattered billing on disparate credit cards.
Worse yet, without a clear process or ownership for SaaS procurement, you could end up with a lack of visibility on security and legal reviews that could put your business in potential violation of service agreements.
How do I get started with procurement?
First, it’s important to align your internal stakeholders, especially your Finance, Legal, and Security teams. To help create an internal procurement process, partner with your Finance team to consider your organization’s timeline for budgeting and spend review, and get a clear perspective on payment terms that work well for your business. In addition, work with your Security and Legal teams to understand what to look for in a security review and a legal review, and the timelines and materials needed for each.
Next, come up with a minimum viable process with defined reviews as part of your approval process. Even if it’s lightweight, this process can help requesters understand where to get started when they want to buy a specific tool or piece of software, who needs to review the request, and any materials needed. You can start with a spreadsheet to track the stages and approvals needed — which can also help keep requesters in the loop to understand where they are in the process.
At Vanta, we use Freshservice internally to create and track formal tickets for our procurement process, which grants our requestors visibility into the procurement process and also allows for automations that expedite the review and approval process.
What should I look for in the evaluation process?
Before you begin the evaluation process, it helps to understand the needs of your project and business and to gather a list of requirements. For instance, what’s the problem you’re trying to solve — and what do you actually need for what you’re trying to buy?
For software, it can also help to understand the experience of peer or partner organizations who also use specific tools, or to draw upon your team’s experience with specific tools. In addition, it’s critical that you understand your overall SaaS toolkit across your business to help ensure there isn’t already another tool that tackles the same requirements.
Next, we suggest running a request for proposals (RFP) if needed with multiple vendors to understand who meets your needs and requirements, and what’s important to you as a company. While pricing always comes into play, it’s important to stack rank and prioritize between things such as your requirements, budget, pricing, and relationship with the vendor.
What should I look for with vendor security reviews?
Every company has a different process for vendor security reviews, and it’s important to work with your security and legal teams to understand their approach.
At Vanta, we typically review a business’s SOC 2 in depth, as well as recent penetration tests. Our goal is to assess their overall security posture and to understand the nature of security risk posed to Vanta by vendor relationships.
In principle, we think of security risk as the likelihood of a security incident occurring times the potential impact of such an event. Additionally, you can think of a security incident as the compromise of a vendor system or code implicating its confidentiality, integrity, or availability. We follow a defined vendor security review methodology and also work closely with our Legal team if and when needed.
Who should be involved in the evaluation process?
In addition to your procurement function (no matter how new or established), we suggest involving your Legal, Security, and IT or Corporate Engineering teams for a comprehensive evaluation and review—as well as the requesting business stakeholder.
Remember that things can change throughout your evaluation process, so it’s especially important to stay close to your business stakeholder to ensure that what they’re asking for is clear and aligned with the requirements throughout the procurement process.
For instance, there may be cases where your requestor may want to move quickly for business reasons—and it’s important to understand what these are and monitor any changes to avoid cases where procured software or tools then sit unused throughout the length of the agreement.
Tips for getting started
Here are some additional tips from our team. We recognize that kick-starting procurement efforts can be both fun and challenging, and hope these points are helpful to keep in mind.
- Do your research: Before going into conversations, have a clear sense of what your expected price and your budget are. This helps avoid last-minute surprises and can help set expectations for all parties involved.
- Ask for what you need: In the evaluation process, don’t be afraid to ask for a proof of concept (POC) to ensure the solution or product is exactly what you need. Not only does a POC offer your team a hands-on experience with the tool, but it can also help make a clear business case by ensuring it meets (or even exceeds) your requirements.
- Keep track of renewals: Work closely with your Finance team to keep track of renewals—especially with differing lengths of agreements.
Determine whether the GDPR applies to you and if so, if you are a processor or controller (or both)
Do you sell goods or service in the EU or UK?
Do you sell goods or services to EU businesses, consumers, or both?
Do you have employees in the EU or UK?
Do persons from the EU or UK visit your website?
Do you monitor the behavior of persons within the EU?
Create a Data Map by taking the following actions
Identify and document every system (i.e. database, application, or vendor) which stores or processes EU or UK based personally identifiable information (PII)
Document the retention periods for PII in each system
Determine whether you collect, store, or process “special categories” of data
Determine whether your Data Map meets the requirements for Records of Processing Activities (Art. 30)
Determine whether your Data Map includes the following information about processing activities carried out by vendors on your behalf
Determine your grounds for processing data
For each category of data and system/application have you determined the lawful basis for processing based on one of the following conditions?
Take inventory of current customer and vendor contracts to confirm new GDPR-required flow-down provisions are included
Review all customer contracts to determine that they have appropriate contract language (i.e. Data Protection Addendums with Standard Contractual Clauses)
Review all in-scope vendor contracts to determine that they have appropriate contract language (i.e. Data Protection Addendums with Standard Contractual Clauses)
Have you performed a risk assessment on vendors who are processing your PII?
Determine if you need to do a Data Protection Impact Assessment
Is your data processing taking into account the nature, scope, context, and purposes of the processing, likely to result in a high risk to the rights and freedoms of natural persons?
Review product and service design (including your website or app) to ensure privacy notice links, marketing consents, and other requirements are integrated
Does the notice to the data subject include the following items?
Does the notice also include the following items?
Do you have a mechanism for persons to change or withdraw consent?
Update internal privacy policies to comply with notification obligations
Update internal privacy notices for EU employees
Determine if you need to appoint a Data Protection Officer, and appoint one if needed
Have you determined whether or not you must designate a Data Protection Officer (DPO) based on one of the following conditions (Art. 37)?
If you export data from the EU, consider if you need a compliance mechanism to cover the data transfer, such as model clauses
If you transfer, store, or process data outside the EU or UK, have you identified your legal basis for the data transfer (note: most likely covered by the Standard Contractual Clauses)
Have you performed and documented a Transfer Impact Assessment (TIA)?
Confirm you are complying with other data subject rights (i.e. aside from notification)
Do you have a defined process for timely response to Data Subject Access Requests (DSAR) (i.e. requests for information, modification or deletion of PII)?
Are you able to provide the subject information in a concise, transparent, intelligible and easily accessible form, using clear and plain language?
Do you have a process for correcting or deleting data when requested?
Do you have an internal policy regarding a Compelled Disclosure from Law Enforcement?
Determine if you need to appoint an EU-based representative, and appoint one if needed
Have you appointed an EU Representative or determined that an EU Representative is not needed based on one of the following conditions?
If operating in more than one EU state, identify a lead Data Protection Authority (DPA)
Do you operate in more than one EU state?
If so, have you designated the Supervisory Authority of the main establishment to act as your Lead Supervisory Authority?
Implement Employee Trainings to Demonstrate Compliance with GDPR Principles and Data Subject Rights
Have you provided appropriate Security Awareness and Privacy training to your staff?
Update internal procedures and policies to ensure you can comply with data breach response requirements
Have you created and implemented an Incident Response Plan which included procedures for reporting a breach to EU and UK Data Subjects as well as appropriate Data Authorities?
Do breach reporting policies comply with all prescribed timelines and include all recipients i.e. authorities, controllers, and data subjects?
Implement appropriate technical and organizational measures to ensure a level of security appropriate to the risk
Have you implemented encryption of PII at rest and in transit?
Have you implemented pseudonymization?
Have you implemented appropriate physical security controls?
Have you implemented information security policies and procedures?
Can you access EU or UK PII data in the clear?
Do your technical and organizational measure ensure that, by default, only personal data which are necessary for each specific purpose of the processing are processed?
Develop a roadmap for successful implementation of an ISMS and ISO 27001 certification
Implement Plan, Do, Check, Act (PDCA) process to recognize challenges and identify gaps for remediation
Consider ISO 27001 certification costs relative to org size and number of employees
Clearly define scope of work to plan certification time to completion
Select an ISO 27001 auditor
Set the scope of your organization’s ISMS
Decide which business areas are covered by the ISMS and which are out of scope
Consider additional security controls for business processes that are required to pass ISMS-protected information across the trust boundary
Inform stakeholders regarding scope of the ISMS
Establish an ISMS governing body
Build a governance team with management oversight
Incorporate key members of top management, e.g. senior leadership and executive management with responsibility for strategy and resource allocation
Conduct an inventory of information assets
Consider all assets where information is stored, processed, and accessible
- Record information assets: data and people
- Record physical assets: laptops, servers, and physical building locations
- Record intangible assets: intellectual property, brand, and reputation
Assign to each asset a classification and owner responsible for ensuring the asset is appropriately inventoried, classified, protected, and handled
Execute a risk assessment
Establish and document a risk-management framework to ensure consistency
Identify scenarios in which information, systems, or services could be compromised
Determine likelihood or frequency with which these scenarios could occur
Evaluate potential impact of each scenario on confidentiality, integrity, or availability of information, systems, and services
Rank risk scenarios based on overall risk to the organization’s objectives
Develop a risk register
Record and manage your organization’s risks
Summarize each identified risk
Indicate the impact and likelihood of each risk
Document a risk treatment plan
Design a response for each risk (Risk Treatment)
Assign an accountable owner to each identified risk
Assign risk mitigation activity owners
Establish target dates for completion of risk treatment activities
Complete the Statement of Applicability worksheet
Review 114 controls of Annex A of ISO 27001 standard
Select controls to address identified risks
Complete the Statement of Applicability listing all Annex A controls, justifying inclusion or exclusion of each control in the ISMS implementation
Continuously assess and manage risk
Build a framework for establishing, implementing, maintaining, and continually improving the ISMS
Include information or references to supporting documentation regarding:
- Information Security Objectives
- Leadership and Commitment
- Roles, Responsibilities, and Authorities
- Approach to Assessing and Treating Risk
- Control of Documented Information
- Internal Audit
- Management Review
- Corrective Action and Continual Improvement
- Policy Violations
Assemble required documents and records
Review ISO 27001 Required Documents and Records list
Customize policy templates with organization-specific policies, process, and language
Establish employee training and awareness programs
Conduct regular trainings to ensure awareness of new policies and procedures
Define expectations for personnel regarding their role in ISMS maintenance
Train personnel on common threats facing your organization and how to respond
Establish disciplinary or sanctions policies or processes for personnel found out of compliance with information security requirements
Perform an internal audit
Allocate internal resources with necessary competencies who are independent of ISMS development and maintenance, or engage an independent third party
Verify conformance with requirements from Annex A deemed applicable in your ISMS's Statement of Applicability
Share internal audit results, including nonconformities, with the ISMS governing body and senior management
Address identified issues before proceeding with the external audit
Undergo external audit of ISMS to obtain ISO 27001 certification
Engage an independent ISO 27001 auditor
Conduct Stage 1 Audit consisting of an extensive documentation review; obtain feedback regarding readiness to move to Stage 2 Audit
Conduct Stage 2 Audit consisting of tests performed on the ISMS to ensure proper design, implementation, and ongoing functionality; evaluate fairness, suitability, and effective implementation and operation of controls
Address any nonconformities
Ensure that all requirements of the ISO 27001 standard are being addressed
Ensure org is following processes that it has specified and documented
Ensure org is upholding contractual requirements with third parties
Address specific nonconformities identified by the ISO 27001 auditor
Receive auditor’s formal validation following resolution of nonconformities
Conduct regular management reviews
Plan reviews at least once per year; consider a quarterly review cycle
Ensure the ISMS and its objectives continue to remain appropriate and effective
Ensure that senior management remains informed
Ensure adjustments to address risks or deficiencies can be promptly implemented
Calendar ISO 27001 audit schedule and surveillance audit schedules
Perform a full ISO 27001 audit once every three years
Prepare to perform surveillance audits in the second and third years of the Certification Cycle
Consider streamlining ISO 27001 certification with automation
Transform manual data collection and observation processes into automated and continuous system monitoring
Identify and close any gaps in ISMS implementation in a timely manner
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Determine which annual audits and assessments are required for your company
Perform a readiness assessment and evaluate your security against HIPAA requirements
Review the U.S. Dept of Health and Human Services Office for Civil Rights Audit Protocol
Conduct required HIPAA compliance audits and assessments
Perform and document ongoing technical and non-technical evaluations, internally or in partnership with a third-party security and compliance team like Vanta
Document your plans and put them into action
Document every step of building, implementing, and assessing your compliance program
Vanta’s automated compliance reporting can streamline planning and documentation
Appoint a security and compliance point person in your company
Designate an employee as your HIPAA Compliance Officer
Schedule annual HIPAA training for all employees
Distribute HIPAA policies and procedures and ensure staff read and attest to their review
Document employee trainings and other compliance activities
Thoroughly document employee training processes, activities, and attestations
Establish and communicate clear breach report processes
to all employees
Ensure that staff understand what constitutes a HIPAA breach, and how to report a breach
Implement systems to track security incidents, and to document and report all breaches
Institute an annual review process
Annually assess compliance activities against theHIPAA Rules and updates to HIPAA
Continuously assess and manage risk
Build a year-round risk management program and integrate continuous monitoring
Understand the ins and outs of HIPAA compliance— and the costs of noncompliance
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