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How to solve a problem like third-party vendors

Whether it’s materials suppliers in manufacturing, couriers for e-commerce businesses, social media management tools for marketing agencies or accounting software for, well, everyone, it’s almost impossible to think of an industry that doesn’t function as part of a wider ecosystem.

No organisation is an island. And as companies’ reliance on software, in particular, continues to grow, there needs to be much greater awareness of the pros and cons of relationships with third-party vendors.

The benefits of book-keeping software, communications tools and (of course) information security management solutions are clear: organisations can dramatically improve their capabilities, operational efficiency and profitability by utilising everything from Microsoft Office to Chat GPT. Over the last decade or so we have seen the proliferation of cloud-based services that make businesses incredibly agile and able to perform work tasks from virtually anywhere and at any time with nothing more than an internet connection.

However, it is important to note that our growing reliance on third-party tools is both a great strength and also a potential weakness.

Why?

Because every new tool or technology an organisation adopts opens up a pandora’s box of risk. That may sound rather dramatic but it has been proven to be the case on many occasions in recent years (Google the SolarWinds breach for just one pertinent example).

The truth is that most innovative solutions and applications use a variety of off-the-shelf or open-source code as building blocks for their technologies. These building blocks can often contain vulnerabilities that provide opportunities for cybercriminals to exploit.

Let us use Chat GPT as an example. Having shot to fame over the past 24 months, every company and its dog have looked to use the AI tool to develop a new automated solution able to save manpower, provide insights, churn through large volumes of data and streamline operations. But the question is: how many organisations have absolute clarity on what they are plugging into their own app or solution?

Does every technology business have a detailed understanding of every line of code that has gone into creating Chat GPT and do they know how the data input into the AI tool may be used?

So, how do we solve a problem like third-party vendors

As I have outlined, an interconnected business environment introduces risk for businesses. But, let’s be honest, it’s unrealistic for modern organisations to cut their smorgasbord of tech from daily operations. No enterprise is going to jettison Microsoft Word, Hubspot or Monday.com when these tools have become so essential to achieving success.

Nevertheless, organisations do have to consider how they can navigate these challenges and manage information security risks effectively to safeguard sensitive data and showcase cyber resilience. While it is impossible to eradicate risk entirely, it is through certification frameworks such as ISO 27001 that businesses can take steps to develop strategies around third-party vendors and minimise their threat surface area.

This begins with performing due diligence on potential third-party vendors before partnering with them. Gaining a clear understanding of a vendor’s own security credentials – again ISO 27001, NIST, Cyber Essentials+ and SOC2 are good indicators of adherence to best practice – and checking whether a vendor has encountered any incidents or breaches in the past are good places to start.

Importantly, an initial audit is not enough. Organisations must continue to monitor and assess vendor security practices on a regular basis through annual risk assessments to retain confidence and ensure that a healthy relationship does not become a dangerous one.

Look internally as well as externally

As with all aspects of information security, staff training is essential in relation to the use of third-party software and the handling of relationships with providers. Training relating to phishing scams and responsible data handling can help to mitigate many of the risks associated with apps and software tools.

Finally, it is important to not only take steps to reduce the likelihood of a breach or leak but also prepare for the worst in the form of incident response planning. With the best will in the world no organisation can ever fully remove the potential for a cyber incident. So, giving staff the training and education required to respond to an issue is every bit as important as equipping them with the knowledge to prevent a breach.

Keeping track of your third-party vendors

One of the most celebrated features of the Hicomply platform lies in the ability to record, monitor and manage all aspects of information security in one place – and that includes supplier agreements and supply-chain management. Using our ISMS, organisations can not only ensure full visibility over partnerships with vendors but also make auditing processes dramatically easier. And thanks to automated reminders, businesses can make sure they never forget to keep audits or documentation up to date ever again.

Don’t shoulder the burden of third-party vendors alone. Find out how we can help by reaching out to our team of experts here.

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