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As your business relies on outsourcing to handle more complex processes, you will be entrusting vendors with your company’s proprietary information, trade secrets and employee info. You must ensure that hackers cannot breach your networks using the connections between you and your partners. You must also have a process to identify any irregularities in your outsourcing partnerships and make sure that vendors meet any established privacy and security standards.

To better manage your risks, here are some tips that will help you handle the framework:

1. Note All of Your Third Parties

You must determine who is providing services and products to your business and note them in your risk management plan. List the vendors, service providers, contractors, consultants and other third parties who are working on your accounts and their point of contact information.

When you know who the third parties are, you can better deploy processes and procedures to assess the risks involved with each partner. You gain an understanding of how your company’s information will move between you—and, therefore, how it can be exposed.

2. Note the Risks That Come With Each Third Party

You must determine how your relationship with the third parties will affect your company’s protection of its assets. You must take a thorough look at the risks and protections you have in place for each third party.

Some risks are much more nuanced, requiring you to get to know more about each vendor and service provider. You must ask specific questions to figure out the nature of the risk. For example, what security measures does your partner use? What steps are they taking to protect your IP?

3. Group Third Parties Based on Risk-Level

After you note which vendors are providing services to your company and the areas of risk, you can group these third parties based on their risk level. You must determine which groups will require a more significant amount of oversight and monitoring than others.

4. Prioritise Critical Risks

As your business continues to grow, your network expands, and third parties become more integrated into your daily operations. You will note a significant amount of third-party risk but must prioritise the risks that are most critical. When you understand which risks are the most critical, you can focus your IT security budget and other resources and relegate tasks according to urgency.

5. Assign a Team to Manage the Framework

You must appoint a team responsible for managing the framework, and this team must include members from both the IT and accounting departments.

This team, who will be responsible for the sustainability of your framework, will clearly communicate the requirements of all third parties in your enterprise. They will also communicate relevant information to the other areas of your business and both internal and external partners, so you can all work together to better manage it.

Conclusion

The main goal of managing third-party risk is to protect your company’s assets—the biggest and most important of which is your data. The more integrated your business becomes with third parties, the greater the chance of your company’s data being exposed to hackers or fraudulent activity.

You must have a clear picture of who your third-party partners are, what kind of information they have access to and the risks involved with each one of them. Use this information in conjunction with your risk management plan to make informed decisions about your IT security.

In this industry, prevention is the number one priority. Contact us for your company’s cyber security risk assessment. We’ll help you figure out which areas your company needs to work on to keep all your precious data safe and secure.

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