Progressive Technology Vendor Management professional with expertise in design and development of Technology Third Party Risk Management operations. Expert in developing alignment between VMO and FLOD teams to deliver empowered risk operations.
There are multiple operational ‘Maturity’ assessments promoted throughout the Third Party Risk Management community. Each offers a unique perspective and definite orientation on which operational capability and maturity is measured. What most of these assessments seem to have in common, is a mature TPRM organization (Level 4 & Level 5) introduces analytics to their operation.
Currently, the data captured in TPRM & GRC platforms is basic, essential data points. Much of which has been developed to meet or satisfy regulatory requirements. What happens when we take a fresh look at the information TPRM can collect and maintain with an eye toward business value?
Collaboration between IA platform providers, GRC & TPRM platform providers, data feed and dynamic reporting partners and implementation partners offers significant potential to help TPRM and GRC leaders unlock value. Global SRN (www.globalsrn.org) has initiated a research program with Academic and Market partners to facilitate this interaction. If this is an area of interest, please leave a comment in TPRM Forum’s Contact page and we will respond.
The Global Sourcing Research Network (www.globalsrn.org) announces the formation of the TPRM Sub-committee to support members increasing focus and engagement with vendor risk. The initial focus of the TPRM sub-committee is the introduction of a market research effort to identify emerging use case of Intelligent Automation in Third Party Risk Management operations.
As a market survey, Global SRN will engage Academic and Community partners to participate in design, execution and analysis of the results. The goal being to identify current and emerging IA use cases and document best practices to benefit TPRM operations. Potential Academic Partners include Carnegie Mellon University, NC State and others. Community Partners will feature leading Intelligent Automation firms, Governance, Compliance & Risk (GRC) platform, managed service and consortiums as well as advisory firms.
If you are interested to learn more about the Global SRN TPRM sub-committee, please visit Global SRN or TPRM Forum.
In 2017, TPRM Forum conducted a survey of 42 Technology Vendor Management executives. The goal of the research was to understand the issues impacting technology VMO organizations and the actions being taken to successfully meet the challenge. Agile Development & Cloud Governance were identified as the leading operational challenges.
Fast forward 14 months and Cloud Governance has emerged as the top operational challenge for Technology VMO and IT leaders. Cloud expenditures are consistently running 2 to 3 times greater than budgeted with little insight or control. Technology VMO leaders are best positioned to help CIO’s establish the necessary diligence to budget, forecast and deliver cloud efficiencies.
Technology VMO leaders must embrace Cloud Governance as a core discipline alongside contract, performance, financial and relationship management. Establishing a centralized cloud governance capability to monitor cloud ‘uptake’ enables the technology VMO to govern, analyze and recommend efficiencies. The transparency achieved enables VMO leaders provide IT leadership clearly document consumption patterns by business unit and cost center, forming a platform for potential ‘charge back’ capabilities and greater corporate cloud accountability.
It is well documented that TPRM leaders continue to invest in GRC platforms to enable risk operations. In TPRM Forum’s recent survey, nearly 40% of TPRM leaders indicated investment in a GRC platform will be their leading action to mature and enhance capabilities.
So why are some TPRM leaders experiencing sub-optimal GRC performance?
Governance, Risk & Compliance platforms, like any sophisticated technology tool, offers significant capabilities. While user friendly, they require significant integration, workflow design and ongoing maintenance. This is not a trivial level of effort and requires the appropriate skills to realize the intended value.
TPRM Forum’s PULSE Assessment methodology documents a TPRM organizations maturity in addition to operational risk and environment complexity. Through these efforts, TPRM Forum observes a consistent result: TPRM operations with dedicated, technically capable GRC Platform Administrators achieve greater maturity, operational capability and significantly more value from their GRC platform. Unfortunately, true dedicated GRC Platform Administrators are in the minority of TPRM operations today.
Perhaps GRC platform providers contribute to this challenge as they highlight the flexibility and ease of use of their technologies. ‘Drag-n-Drop’ workflow creation and well-designed user interfaces may mislead TPRM leaders as to the underlying complexity, creating an impression a technical role is not required. When GRC Administrator role is missing, TPRM Forum observes significantly lower levels of GRC platform utilization, integration management and maintenance challenges and continued proliferation of other solutions, limiting the GRC platforms ability to achieve comprehensive, cross-organization integration.
A GRC platform is the core underpinning of risk operations. Make certain to include budget for a technically competent platform administrator to realize the intended value and benefit.
TPRM Forum’s recent survey of TPRM leaders identified effective collaboration of FLOD operations with Vendor Management, Strategic Sourcing and Procurement as the leading area of focus for improvement. Alignment across the cross-functional teams has the potential to achieve comprehensive vendor life cycle management and evidence support. The issue though is how to centralize and coordinate activity.
Looking specifically at the ‘monitoring’ phase of Third Party Risk & Vendor Management, we quickly see there are a number of activities, if coordinated and managed centrally, will provide regulators and audit the evidence required to substantiate effective TPRM operations. It also drives a productive level of collaboration and in essence, bonds the teams.
Third Part Risk Management ‘Monitoring’ Life Cycle Phase includes, but is not limited to, the following activities:
Vendor Management Organization:
Contract Management – collection and maintenance of the Deliverable & Obligation tracker with a structured, formal calendar of events. Artifacts stored in central, accessible location. This could include annual Insurance certificate, SOC II Type II Audit, DR Annual Test Results, Policy revisions etc.
4th Party Management – definition and approval of 4th party sub-contractors and execution of proper onboarding and offboarding by the Third Party
Performance Management – SLA & KPI’s associated with the contracted services
Operational Service Management – onsite assessments of the technology services aligned to CMMi, ITIL, NIST or similar independent methodology
Third Party Risk Management – FLOD:
Third Party Classification
Ongoing, dynamic monitoring (Business dimensions)
RCSA management &/or coordination
Regulatory environment changes and Legal Impacts
Regulator response support
Centralized reporting/vendor profile
Contract Currency – Revision and Amendment Maintenance
TPRM Forum recommends consistent, ongoing collaborative sessions between parties to ensure activities and schedules are maintained and a central, accessible repository is continually updated. This is a great opportunity to work with your GRC platform team to ensure activities and artifact collection is incorporated into workflow with artifacts accessible through a central dashboard.
For many organizations, the initial impetus to discuss software asset management is the receipt of an audit notification communication from a software publisher. This sets-off a predictable series of events as IT and Financial executives grapple with the impact of the pending audit. The steps are:
First Step: Immediate action to reduce audit impact
Executives quickly assemble to discuss options and realize there is significant exposure. During these conversations, the lack of supporting data and evidence to confirm deployment with entitlement levels emerges. The decision is quickly made to secure expert support from one of the many experts that can help reduce penalties.
Second Step: Realization that there may be others in the queue
As IT and financial executives come to the realization that there is little evidence to support or challenge the audit, the question quickly turns to the broader software asset estate.
Upon completion of audit negotiations or in parallel, organizations engage a partner to scan their environment, align consumption with entitlements and identify gaps. Quantifying potential exposure.
Third Step: Question what steps need to be taken to eliminate this exposure and prevent this from future occurrence
Typical focus is on defining the appropriate entitlement management, deployment controls, and process workflows by which the asset is managed. In addition, identification of a platform to dynamically ping the environment and quickly identify areas of non-compliance.
In essence, establish a Software Asset Management organization and operation by which software assets are efficiently and actively managed in the environment.
What would be the benefit if we reversed the process? Instead of ‘swimming upstream’ why not establish a SAM mindset in anticipation of an audit?
Be prepared with a comprehensive software asset management operation. Once established, when audit notification arrives you can comfortably ‘go with the flow’!
Vendor Management Organizations (VMO) and First Line of Defense (FLOD) third party risk teams struggle to achieve effective collaboration. Contributors to this challenge is VMO and FLOD risk professionals see situations from different perspectives and speak a slightly different language. These dynamic impacts the ability for VMO’s to achieve the maturity necessary to deliver value while limiting the FLOD’s risk effectiveness.
The TPRM Forum recommends VMO and FLOD leaders focus on the following areas to establish ‘Common Ground’.
Mature VMO’s establish vendor classifications to drive innovation and identify emerging technologies to support the road map
FLOD and TPRM organizations categorize third parties to develop appropriate strategies based on risk dimensions
Making this a collaborative partnership enables VMO’s and FLOD/TPRM teams to support one another while establishing a more comprehensive strategic view of risk
FLOD and TPRM teams continually monitor regulatory bulletins and guidance to identify potential impact to evidence and compliance requirements.
VMO’s continually strive to ensure Terms & Conditions, KPI’s and service definitions are driving the desired behavior.
Working in unison with Procurement and legal, VMO’s and FLOD/TPRM can continually focus revisions and updates to maintain contract currency
VMO’s focus on continuing improvement (CI) and achieving greater savings and performance.
FLOD/TPRM teams focus on monitoring compliance and adherence to stated requirements
Working together, understanding one another’s monitoring focus and activities while sharing details of assessment activities provides additional data points.
The TPRM Forum’s PULSE Assessment provides an excellent foundation to forge a strong alignment of VMO and FLOD teams to support business expectations and manage risk exposure.