Why Cloud Works for Third-Party Risk Management
If you are running a third-party risk management program, odds are that you either have:
- A lot of spreadsheets and a good attempt at a well-organized email filing system;
- A system in place that moves a lot of data inside and outside of your network; or,
- Outsourced most of the work to a consulting firm.
The technical issues of collaborating with all of your third parties to collect documentation, have them provide responses to inquiries, follow-up on incomplete or incorrect responses, or have a consulting firm work on your behalf is significant. If a single system of record cannot be leveraged, all of the risk calculations, response reviews, and reporting analysis becomes near impossible to obtain. Managing thousands of responses (example: the average assessment is 400 questions * 70 vendors = 28,000 answers to review!) via email or in systems that need to be merged is not tenable.
Cloud technology is actually a perfect fit for this solution for the following reasons:
- It sits outside your organizations firewall and network
- It allows all parties to submit information and collaborate in a secure, non-intrusive manner
- It eliminates the email storage problem and accelerates user response with instant analysis
Instead of moving data all over the place, a cloud solution creates a single location where third parties upload their responses and your analysis can be performed. This is a huge advantage for companies looking to streamline third-party interactions while continuing to maintain a strict network security policy. While the cloud has not been thought of for governance, risk and compliance related programs in the past; secure, flexible, and adaptable cloud solutions exist today that are allowing better performance at a lower cost.