Taking on new suppliers as you grow your business is associated with a unique set of challenges and risks. Partnerships increase the number of people with access to your systems, and managing this access requires diligence when assessing potential security issues.
When Should Vendors be Allowed Access?
Efficiency is key to success in the modern market. Companies failing to adapt to the pace of commerce become overwhelmed by the number of administrative tasks necessary to keep the business going and are eventually outpaced by competitors.
Third-party vendor access is one way to streamline your business processes and eliminate the bottlenecks created when performing transactions with partners outside your system. Onboarding your suppliers maintains efficiency by making it possible to communicate, place orders and send payments without leaving your company’s system or requiring additional software or services to handle supplier transactions.
Onboarding supports flexible workflows and allows your system to remain both scalable and adaptable. If vendors are left out of the system, your company is forced to use outdated technologies to deal with an increasing number of supplier relationships. The segmented nature of these relationships increases the likelihood of duplicating suppliers for the same or similar products, paying more than you need to for essential supplies and failing to maintain the proper level of communication.
Major Security Risks of Third-Party Access
For vendor onboarding to be secure, however, you must understand the risks associated with each potential partner. Despite vendor access accounting for an average of 89 connections per week, only 34 percent of companies allowing vendor access actually know which system logins can be attributed to their suppliers. In a survey conducted by Bomgar, 69 percent of businesses said they could associate a security breach in the previous year with a problem with vendor access.
These statistics highlight the critical importance of third-party access risk management, yet only 52 percent of companies have solid security standards governing vendor onboarding. To keep your network safe from accidental or deliberate breaches caused by third parties, consider these factors before clearing a vendor for system access:
• Credit history, including bankruptcies and liens
• Reliability with delivering orders and services
• How security risks are handled
• How often security audits are performed
• Maintenance of data security
• Regularity of data backups
• Number and types of devices used for network access
Use these details to assess the level of risk for each vendor, and tailor your security efforts to address specific risks associated with each third party.
Regulatory compliance is a growing concern for all businesses. From credit card processing to email opt-ins, customers want to know their data is safe and that they have the choice to revoke a company’s privilege to use, transmit or store personal information.
Vendors not in compliance with the regulations to which your business is subject are a risk not only to the network but also to the reputation of your company. Being flagged for noncompliance carries hefty fines and possible legal consequences, and it reduces consumer confidence when customers realize their data isn’t as safe with you as they thought.
Discuss your company’s compliance strategies with each vendor you wish to onboard, and look into their histories to find out if they’ve dealt with any compliance or security issues in the past. Evaluate certificates of compliance for relevant regulations so that you know your company will be in the clear should you choose to allow network access.
Steps for Successful Third-Party Onboarding
According to CSO Online, security breaches related to vendor access cost businesses a total of $10 million in 2016. A strategic third-party onboarding process minimizes the risk of your business suffering loss from similar incidents.
Onboarding should begin with an assessment of the potential risks associated with allowing a specific vendor to access your systems. It’s important to be as detailed as possible during the vetting process. Utilize all information available about each vendor to get a clear picture of how well they adhere to regulations. If their compliance and security measures check out, you can collect the information you need to add them to the system and allow for streamlined access.
To keep company data safe, it’s essential to follow the same onboarding process for every vendor, every time. Implement monitoring solutions to track logins and system activity for all users, making use of modern technologies to detect potentially malicious activities. Train employees in all security measures relating to third-party access, including how to respond should monitoring software discover unauthorized activities.
Whether it’s a new company or a group you’ve worked with for years, no exceptions should be made when onboarding any third party. Maintain the security of your system and prevent problems with compliance by establishing proper boundaries with vendors and re-evaluating access needs over time.