While you may need vendors for the successful running of your company, it is important that you put measures in place to prevent leaking of your clients’ private data. The use of vendors is unavoidable regardless of whether you are using SaaS marketing platform or payroll processor. However, you’re obliged to establish a system to ensure that the databases you share with your vendors are protected from criminals. You’ll achieve this by creating a vendor management plan to monitor the risks that the vendors pose to the data.
Vendor Management Plan
This is a plan that establishes the rules that mitigate the risks that a third-party vendor poses to your data as well as that of your clients. To avoid misuse of private information, you should ensure that all your vendors are subjected to regular accountability tests through management plans system.
Step 1: Classify the Information Accessible to Your Vendors
The information that your vendor access will directly determine their risk level. You need to identify the vendors’ asset used for accessing the information to determine their safety levels before accepting any contract with them. To assess their risk level, you’ll need to answer the following questions exhaustively:
- What role do the vendors play in my organization?
- What organization’s information will the vendor require to fulfill their obligation?
- What employee’s information will the vendor require?
- What customer’s information will the vendor need?
- Will the vendor access the organization’s systems and networks? If yes, which ones?
- For how long will the vendor have access to the systems and networks?
You will need to gather as much information as you can about the specific vendor. Use the information to evaluate the risk that the vendor poses to your organization. You need to clearly define how they will help you achieve your objectives and determine the amount of an organization’s data they need to fulfill that.
Step 2: Determine the Risk Tolerance for Vendors
Immediately after knowing the information that your vendors will need access to, you will have to establish a risk tolerance plan which will help you accept, mitigate, transfer, or refuse the risks. After accessing their needs, you should ask yourself the following:
- What is the role of the vendor in my business operations?
- What amount of company, employees’, and customer’s information does the vendor need?
- How many networks and systems must the vendor access?
You should only accept a risk that is critically crucial for successful operations of the organization. For example, consider two vendors; cloud service provider and email distribution vendors. Your IT department will store all electronic data through the cloud provider while all the marketing department will use emails to distribute information. The cloud provider stores crucial information such as names, date of births, and financial information. If you compromise the data, you’ll face legal problems. On the other hand, loss of emails is less legally binding. As such, your cloud provider is more critical than the email vendor and thus carries a higher risk.
Step 3: Design Procedure to Guide Vendor Relationship
Ensure that your contract with the vendor is detailed and that it contains all the necessary information relating to the safety of the data they handle. The service level agreement is binding and should outline the roles of the vendor with unmatched clarity. It should elaborate the need for the vendors to complete the projects within the specified time while ensuring that they follow all the security requirements of the organization. Your document should contain the following:
- The protocols for authorizing access
- Controls for information access
- Requirements for password management
- Security protection measures for network and systems
- Update requirements for the organization’s networks and systems
- Training requirements for employees’ security awareness
- Encryption and decryption requirements
- Liability and security incidents
- Requirements for end-point security
Ensure that you give your vendors your security expectations and let them commit to following the requirements. Also, only opt for the vendors whose risk level is relatively low. For example, you cannot have a vendor who does not perform multi-factor authentication if your organization does it since the risk will be too high.
Step 4: Ongoing Vendor Monitoring
The vendor’s mistakes can result in a compromise of your data since their security situation is equivalent to the risk they will pose to your organization. What’s worse is the fact that you may lack direct control of their activities. However, you can follow the following strategies to continuously monitor their activities:
- Frequent site visits
- Check and review SOC reports
- Engaging the vendor frequently
- Ask for penetration testing document
- Study internal audits documents
- Check IT architecture
- Review security documentation
A thorough vendor oversight will require that you trust them to meet all the agreements on the contract while reviewing documents to verify the trust.
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About the Author
Ken Lynch is an enterprise software startup veteran, who has always been fascinated about what drives workers to work and how to make work more engaging. Ken founded Reciprocity to pursue just that. He has propelled Reciprocity’s success with this mission-based goal of engaging employees with the governance, risk, and compliance goals of their company in order to create more socially minded corporate citizens. Ken earned his BS in Computer Science and Electrical Engineering from MIT. Learn more at ReciprocityLabs.com.