How to Manage Supply Chain Risks Caused by Third Parties

The supply chain is filled with third-party risks, which can do serious harm. A single breach may result in loss of income and sensitive data, operational halts, legal difficulties, compliance issues, and ruined reputations.

It’s almost difficult to bring in vendors without exposing your business to risks from cyber threats if your business doesn’t have a solid third-party risk management strategy. This article will discuss strategies for successfully managing third-party risks so you may work with vendors with trust.

A Warning Tale About Data Exposure and Vendor Supply Chain Risks

The latest Okta breach serves as a perfect example of a serious supply chain attack.

In this case, a hacker team by the name of Lapsus$ launched a supply chain attack against Okta’s customers rather than the company itself. The threat actors aggressively used a Sitel support engineer who had access to Okta’s resources to control a single workstation.

Western Union, Ally, and Amalgamated Bank included the financial institutions at risk of attack as a result of the Okta breach. The breach serves as an example of what may happen when businesses rely on third parties to provide their solutions without having an appropriate third-party risk management program.

However, third-party service providers may be weak in putting effective cybersecurity frameworks, controls, and policies into place. To reduce supply chain risks, companies should investigate third-party risk management programs that can evaluate supply chain providers, share information about threats, and act quickly in the case of a security incident.

The Importance of Third-Party Risk Management

Let’s discuss why managing third-party risks are important now that you know how much they can affect your company.

First, a company’s security depends on third-party risk management. It protects the business from the risks of using independent contractors. Failure to analyze your company’s supply chain leaves it susceptible to supply chain attacks and data breaches.

Unfortunately, supply chain attacks can completely ruin your business finances. The average cost of a data breach globally in 2022 was $4.35 million, according to IBM’s analysis on the subject. However, you may reduce the expenses while maintaining your organization’s safety with carefully customized solutions for supply chain attacks.

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How Are Supply Chain Third-Party Risks Managed?

Organizations face significant risks from third-party vendors. But what steps may be taken to reduce that risk? Let’s say your company wants to develop a successful plan to improve supply chain security. In that situation, understanding your company’s connection with your third-party vendors is the best place to start.

There are a few things you may think about to handle supply chain risks, although this method will vary based on each company’s resources. These include:

• Educating the stakeholders in your business about the process of managing supply chains
• Ensuring you have a strong strategy in place to manage third-party risks
• Specifying the tolerance for third-party risk at your business
• Creating a system for regularly analyzing and tracking third-party risks
• Keeping tabs on employees who have access to sensitive data
• Understanding the location of your company’s most important assets is important.
• Ensuring that cybersecurity standards are included in vendor contracts
• Testing an incident response plan regularly.

Conclusion

While businesses can use a range of strategies to manage third-party risks, there is no assurance that their data will be secure from breaches. Third-party risks are now at the forefront of organizational threats, therefore it’s important to keep vigilant.

Additionally, your business can get assistance from the IBM Security team, which supports businesses all over the world in analyzing and assessing the risks related to partners and third-party providers.

The third-party risk management services offered by IBM Security offer a scalable method of managing third-party risk and compliance while giving transparency to third-party security and operational activities.

Here at CourseMonster, we know how hard it may be to find the right time and funds for training. We provide effective training programs that enable you to select the training option that best meets the demands of your company.

For more information, please get in touch with one of our course advisers today or contact us at training@coursemonster.com