What's Inside

Organizations must effectively manage third-party risk to maintain compliance and ensure security. However, there is rarely a single estimation of vendor risk in the enterprise, and it is usually not tracked in a single location. Even if there is a single source of truth for risk, manually tracking risk status and entering new risks is a painfully time-consuming process. 

Whatever your organization’s size or industry, calls for audit evidence can leave you scrambling. And no matter how well you prepare for compliance requirement updates, it is normal to lag behind in your testing and evidence gathering. If this is common, you may find relief with third-party risk management (TPRM) software that offers advanced features. 

Organizations of any size benefit from software that addresses the challenges of risk tracking and updating. When selecting TPRM software, the features and benefits explored in this article should be at the top of your list.

Summary of Key Third-Party Risk Management (TPRM) Software Features

Standards Integration

If your enterprise has risk management requirements tied to a standard—think SOC 2, NIST CSF, PCI DSS, GDPR, or ISO 27001—then your third-party risk management software should track compliance against that framework. Integrating with necessary frameworks allows your organization to track gaps and keep up with changes to the standards. This integration also allows monitoring and reporting, which enables companies to address compliance audits and prevent potential fines and legal issues.

Integration capabilities often include: 

• Automated Compliance Monitoring: Continually tracking compliance, including changes in your environment and in the standards themselves

• Comprehensive Reporting: Generating detailed reports outlining compliance status, identifying gaps, and recommending corrective actions

• Real-Time Alerts: Immediate notification of compliance breaches against each standard

Effective integration with cybersecurity ratings, financial health scores, and external expert content boosts the efficiency of risk management operations. 

Real-Time Control Monitoring Against Standards

The work that goes into compiling evidence and performing risk management on demand does not just waste the time of the preparer—it often results in a significant delay in the recipient’s attempt to mitigate issues. Real-time control monitoring gives insight into your compliance status whenever it is needed, removing the need to scramble when asked to compile evidence for ad-hoc reporting. It also shortens the delay between when a gap occurs and when it is mitigated.

Evidence Collection and Audits

While it is important to monitor your vendor compliance status, assertions alone will not satisfy risk managers, auditors, executives, or security professionals. Third-party risk management software should also provide a place to store updated evidence of compliance, whether the compliance evidence is created by humans or by information system monitoring and automation.

Comprehensive Evidence Library

Extensive mapping capabilities to compliance frameworks are often supported by a library of security questionnaires and a centralized evidence library. An evidence library streamlines evidence collection and administration processes. Integrating evidence gathering into third-party risk management software eases the burden of compliance checks and audits.

Customizable surveys and sophisticated risk-scoring mechanisms that can be tailored to each organization’s industry and specific threats further enhance this approach. You should also be able to customize reporting for each vendor so that your reports are not cluttered by information that is accepted—like mitigations in progress or accepted risks.

Automated Evidence Collection

Automated evidence collection is a logical companion to real-time control monitoring. The assertion that a control is in place is not enough, and a lack of alerting is not evidence that a control is in place. Instead, you should have up-to-date evidence for each control, including penetration tests and internal scans, accessible from inside the same system that asserts its presence. Automating evidence collection through integration with monitoring systems and questionnaire storage saves the need to provide aging point-in-time materials for your compliance efforts.

Advanced Audit Capabilities

Advanced audit features provide tools to more easily interact with auditors. You should look for a tool that allows sharing information from within the system with exactly the right amount of access. You should be able to specify permissions necessary for auditors, whether that is direct system logins or reporting. In either case, the audit documentation should be complete and relevant, allowing the auditor to explore both the compliance requirement and the evidence that supports it. You should also be able to ensure that auditors do not have access to information that you have agreed not to release about your partners.

Even better, some third-party risk management systems provide reporting suitable to other external parties. You may need to share your standard and compliance reporting with clients, the vendors themselves, or for activities such as mergers and acquisitions. In those cases, you can show historical evidence of control implementation as a way to build trust that your risk-management systems and processes are established and consistently maintained.

Detailed Risk Assessment

Assertions and evidence are necessary, but they are only the beginning of the effort to understand risk. Once these items are in place, you must still determine what they mean to your organization.

Risk Assessment Automation

Each organization has a risk appetite that is unique to its industry and its executives. Nonetheless, every observed risk starts with the same equation—the combination of vulnerability, threat actor, and asset. The outcomes of this equation may be adjusted up or down, but you should look for third-party risk management software that will automate the initial calculation.  

Comprehensive Risk Information

Third-party risk management software should provide not just the overall estimated risk for each vendor, but detailed risk assessments that show the impact of observed and asserted noncompliance. It will still take an insider to understand exactly the impact of consolidated risks in each organization, but the software can estimate and provide details on risks so that the expert spends more time on the part that matters: reviewing the applicability and risk as it applies to the enterprise.

Configurable Reporting and Actionable Analytics

Organizations need help sharing risk data effectively with different audiences, from executives to developers to auditors. Each stakeholder needs different information—executives want high-level risk postures, while developers need specific code vulnerabilities. Customized, automated reporting drives better decisions when it is presented with the recipients' needs in mind.

Configurable Reporting 

Reporting should be adaptable and configurable to the recipient and the situation. Security executives need to know the overall organization’s security posture, but there are times when they may need a specific update on progress to mitigate one risk. The auditor will need evidence that a control is in place, where a software developer may ask for exactly the evidence showing a vulnerability in their code. All of these reports should be available from your third-party risk management software, with specific views and depth of information available so that each person can perform their tasks. As reports are built, they should be changeable, automated, and repeatable, providing on-demand access when and where it is needed. 

Actionable Analytics 

The reports that your third-party risk management software provides should not stop at facts and risk reporting. You should also seek out reporting capabilities that turn data into digestible, actionable information. You should be able to configure reports that highlight key risk indicators specific to your organization, performance metrics for items such as Mean Time To Repair (MTTR) for compliance issues, or overall risk level for a vendor.

Analytics should enrich reporting with comprehensive decision-making assistance. You need to know which fixes will give the highest value and perhaps which can be enacted the quickest while awaiting the budget and available hours for longer and more complex issues. The right analytics support informed decision-making about compliance budgets, staffing, and which areas continually have compliance needs that go unmet.

Third-party risk management software can integrate standards and automated compliance data collection into a single source of truth for your organization, including data from your vendors. This is a time-saving (and headache-sparing) solution under normal circumstances, but it is an especially incredible advantage in the case of an audit or ad-hoc calls for executive updates. When contract renewal time comes, you will also have a comprehensive answer to whether the vendor fulfilled their security obligations. 

Having indisputable information allows you to negotiate realistically, giving preference to vendors who balance features with due regard to security and compliance requirements. You no longer have to spend days compiling situation reports if noncompliance is expected. Even better, you do not have to create audit documentation that is out of date as soon as it is written. Third-party risk management software provides intelligent, automated, and up-to-date reporting on your current compliance and risk posture.

The choice of features should align with your organization’s needs, but those listed here will be suitable—and advantageous—for most enterprises.