Value of a Third-Party Assessment

Organizations need to move forward with a third-party risk assessment strategy and process that is done throughout the lifecycle of the relationship. This process should be automated with technology to avoid the inevitability of failure. However, moving forward requires a clear and compelling business case that measures the value of risk reduction in managing third-party risk and conducting assessments. As risk exposure in third-party relationships is multi-faceted, organizations are best served to build a clear and compelling business case of the value of third-party risk assessments.

Successful third-party risk assessment strategies deliver the ability to effectively mitigate risk, meet requirements, satisfy stakeholders and auditors, achieve human and financial efficiency, and meet the demands of a changing business environment. Third-party risk assessment solutions enable strong processes that utilize accurate and reliable information. This allows a better performing, less costly, and more flexible process that protects the organization from uncertainty and exposure.  

To achieve a third-party risk management and governance strategy requires a clear and compelling business case of value. Each of the preceding areas of value in a third-party assessment can be built out to provide both quantitative and qualitative benefits in a business case for assessment automation over manual processes. To illustrate this from one angle, the following is a model to demonstrate how third-party assessments reduce the risk exposure of a data breach.