ProcessUnity’s Third-Party Risk Management Maturity Model

INFORMAL

REACTIVE

PROACTIVE

OPTIMIZED

The Organization

• No formal team exists
  (typically, a part-time resource works assessments).
• There is no / minimal involvement from the business.
• There is no / minimal executive sponsorship or support.
• The program is not
  formally defined
• The organization does not support third-party risk activities.

• A single resource or small team is dedicated to the program.
• The business is reluctantly involved in processes (if at all).
• There is minimal executive sponsorship or support.
• There is minimal corporate investment to support third-party risk activities.

• A dedicated team works a formally defined program.
• The business is engaged, ensuring their third-party risk
  is acceptable.
• Full executive sponsorship exists.
• The program is budgeted.
• Subject Matter Experts assist in reviewing areas of their expertise.

• A fully dedicated staff operates a formally defined program.
• Outsourced expertise is utilized when needed/applicable.
• The business actively participates in third-party risk activities.
• Executives promote risk reduction and compliance from third parties.
• Budget exists to continuously enhance the program.

Policy and Procedures

• Policies are nonexistent (or at least undocumented).

• Policies are documented.
• Policy reviews are informal.
• Communication around policies is ad hoc.
• Policies are loosely followed.
• Policies focused on onboarding activities with very little
  ongoing monitoring of existing third parties.

• Policy and procedures
  are documented.
• Reviews and updates
  occur periodically.
• A central library of policies and procedures exists.
• Policies and procedures are leveraged for audits.

• Policy and procedures are documented.
• Reviews and updates occur periodically.
• A central library of policies and procedures exists.
• Annual “read and understood” certifications are conducted with all relevant employees.
• Employees are trained on all relevant policies
  and procedures.
• Policies and procedures are leveraged for audits.

Processes

• Processes are ad hoc.
• There is no consistency
  across organization.
• No central repository exists
  for third-party risk
  information/assessments.
• There is no issue resolution/tracking for outstanding issues.
• Contracts are signed prior to
  due diligence.

• Processes are defined.
• Third parties are not monitored.
• Processes are
  executed inconsistently.
• A central location for third-party information/assessments exists.
• Existing third parties are
  assessed for risk.
• Issues are documented, but not tracked to resolution.

• Processes are defined.
• Third parties are
  monitored periodically.
• External content is used to augment the program.
• Processes are
  executed consistently.
• A central location for third-party information/assessments exists.
• There is a formal third-party onboarding process.
• Existing third parties are assessed for risk.
• Some on-site control
  assessments are conducted
  on critical third parties.
• A formal issue management process exists.

• Processes are defined with an emphasis on
  continuous improvement.
• Third parties are monitored continuously.
• A central location for third-party information/assessments is integrated with ERP, Procurement, and/or GRC solutions where applicable.
• There is a formal third-party onboarding process.
• Existing third parties are assessed for risk continuously.
• On-site control assessments occur for critical third parties.
• A formal issue management process exists.
• KPIs, KRIs and SLAs related to third parties are
  actively monitored.

Risk Assessment Methodology

• A standard question set does not exist.
• There is no standard risk assessment methodology.
• Reviews are limited to single categories of third-party risk.
• Risk assessments are qualitative (if they occur at all).
• Activities are focused on gathering documents/policies versus analyzing risk.

• A standard set of questions is used for all third parties, regardless of risk level.
• There is no standard risk assessment methodology.
• Reviews are limited to single categories of third-party risk.
• Assessments are qualitative
  risk ratings.

• Inherent risk screening questions are used for onboarding.
• Standard sets of questions/questionnaires are used based on the third parties’ inherent
  risk level.
• Inherent and residual risks are calculated on all third parties
  (new and existing).
• Multiple risk categories are assessed for each third party.
• Inherent and residual risk is analyzed quantitatively.
• On-site assessments are conducted on third parties.

• Conditional inherent risk screening questions are used based on service, product, location, branch, etc.
• Standard sets of questions/questionnaires are used based on the third parties’ inherent risk level.
• Inherent and residual risks are calculated on all third parties (new and existing).
• Multiple risk categories are assessed for each third party.
• External content is leveraged to enhance third-party risk assessments and monitoring.
• Inherent and residual risk is analyzed quantitatively.
• On-site assessments are conducted on third parties.
• Ongoing risk assessments (based on SLAs and
  other continuous monitoring activities) can trigger additional assessments.

Third Parties

• Communication is delivered via manual email or phone.
• Lack of central repository
  can result in repetitive/duplicate information.

• Communication is delivered via manual email or phone.
• There are sporadic instances
  of duplicate efforts on
  similar vendors.
• Reviews are performed at an overall level and do not take
  into account sub relationships under the third party (such as services, products, locations, branches, etc.).

• Communications are delivered via automated email and/or a technology portal.
• Assessments are completed within a technology
  (online) portal.
• Reviews are conducted at various levels (service, product, location, branch, etc.).

• Communications are delivered via automated email and/or a technology portal.
• Assessments are completed within a technology
  (online) portal.
• Issues related to third parties are actively managed
  via the portal.
• Reviews are conducted at various levels (service, product, location, branch, etc.).
• Third parties actively maintain their own company and/or service profiles.
• Third parties actively manage their own key contacts and questionnaire routing within their organization.

Supporting Technologies

• Typically, spreadsheets and email are used.

• Programs are supported with email, spreadsheets, homegrown databases and/or survey tools.

• Programs are powered with a dedicated third-party risk management solution/tool.

• Programs are powered with a dedicated third-party risk management solution/tool.
• The third-party risk system is integrated with other critical business application to share relevant third-party data (ERP, Procurement, Ticketing, GRC, Contracts, etc.).

Regulatory Preparedness / Stature

• The lack of formally documented policies and procedures results in full regulatory reviews with limited positive recourse.

• Policies exist, but inconsistent execution of policies results in full regulatory reviews with limited positive recourse.

• Fully documented policies and procedures allow regulators to focus efforts on critical areas
  of review.
• A dedicated third-party risk management solution/tool allows the organization to easily evidence activities conducted against various third parties and showcase how they have automated portions of third-party risk management program.

• Fully documented policies and procedures allow regulators to focus efforts on critical areas of review.
• A dedicated third-party risk management solution/tool allows the organization to easily evidence activities conducted against various third parties and showcase how they have automated portions of third-party risk management program. As a result, there is minimal regulator intervention and fewer requests.
• The organization is recognized by regulatory agencies as a best-practice organization.

Standards Alignment

• The organization does not leverage best-practice standards or control sets within risk its methodology or assessments.

• The organization may leverage best-practice standards to derive question sets for assessments.

• Questionnaires align to best-practice standards and/or best-practice control sets to facilitate deeper reviews of highly critical third parties.

• The organization actively aligns, reviews, and assesses risk assessment methodologies, questionnaires, and control sets to ensure they are up to date and aligned with the most-current best-practice standards.