In today’s business landscape, companies are heavily reliant on third-party vendors, partners and service providers to boost efficiency, reduce costs and drive innovation. While this brings significant benefits, it also introduces substantial risks. Recent cyberattacks, data breaches and supply chain disruptions have highlighted the vulnerabilities that emerge from these external relationships. As a result, third-party risk assessments have become an essential practice for organizations looking to protect themselves from potentially costly exposures.

A third-party risk assessment involves evaluating the risks associated with the external partners upon whom your business relies, identifying areas where vulnerabilities may live and determining whether these entities meet the necessary security, legal, and operational standards. The vendor risk assessment process is a method to manage the risks associated with vendors through a detailed evaluation of their processes, policies and financial stability. Whether it’s vendor cybersecurity practices, regulatory compliance, financial stability or operational resilience, understanding these risks is critical for protecting your business.

Managing third-party risks is a critical component of any organization’s risk management strategy. Third-party risks refer to the potential risks that arise from an organization’s relationships with external parties, such as vendors, suppliers, contractors and partners. These risks can have a significant impact on an organization’s operations, reputation and bottom line.

Please select this link to read the complete article from OSAP mission partner Clark Schaefer Hackett (CSH).