Supplier risk manager12/27/2023 ![]() It’s easy to lump suppliers in with the rest of your organization’s third parties, but not all third parties are the same. A word on vendors, suppliers, and other third parties The damage from such breaches can result in business disruption, financial loss, and harm to your brand. While data breaches are a threat made possible by your supply chain, such risks can also include anything from physical threats (like theft or unauthorized production) to digital ones (like a breach of your cloud hosting provider’s servers). According to the National Institute of Information Technology (NIST), the very factors that make working with suppliers attractive: lower costs, interoperability, the ability to rapidly innovate, and product features, also open you up to risk. This is critical because although suppliers are essential to business, they can also do quite a bit of damage if their security controls have not been adequately vetted. Organizations with strong supplier risk management programs systematically identify, assess, and mitigate threats to their assets and data that might be caused by the organization's supply chain. Supplier risk management, or supply chain risk management (SCRM) is the process of vetting your suppliers so that you can understand the risks they may pose to your organization and the supply chain itself. What is supplier risk management and why do you need it? According to the Ponemon Institute’s latest Cost of a Data Breach report, data breaches caused by third-parties increase the cost of a data breach by an average of $207,411, and data breaches aren’t the only problems suppliers can cause for a company. While your suppliers are necessary for your business - they make it easier for you to do business by lowering costs and allowing you to work more efficiently, they also come along with their fair share of risk. For companies that work in tech, suppliers can include providers who provide physical goods (such as the companies that produce devices) but more often, suppliers are part of a digital supply chain: cloud hosting providers, point of service payment vendors, Software As a Service (SAAS) providers, and every other supplier that helps your organization make, sell, or distribute your product or service. ![]() ![]() Your suppliers provide the tools, materials, and services your organization needs to do business.įor companies that create a physical product, the supply chain includes everything from the companies that produce raw materials or components, the businesses that make machines, and the trucking companies that transport goods and materials. Every company - no matter what they produce - is a part of a supply chain.
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