Implementing a third-party risk management (TPRM) program in a macroeconomic environment typically calls for a systemized approach. According to a Deloitte survey, 63% of respondents find that their main TPRM focus area is to revisit and refresh the overall methodology used by their organization.
If you’re looking to mature your security program and build stable third-party relationships today, using a third-party risk management framework is essential. In this article, we’ll cover everything you should know about TPRM frameworks, including:
- Their meaning and importance
- Examples of recognized frameworks that can assist your TPRM program
- Actionable tips for selecting appropriate frameworks
What is a third-party risk management framework?
A TPRM framework gives organizations a formalized roadmap with conventional wisdom and best practices for building a comprehensive TPRM program. It’s important to note that there’s no globally recognized framework dedicated to regulating or standardizing TPRM programs. As a result, it’s common for TPRM frameworks to be developed internally, according to an organization’s needs and risk profile.
The lack of standardization might seem like a significant challenge in developing a framework as it creates uncertainty around what should be considered a good or bad practice.
The good news is that you still have options—many established risk management frameworks (RMFs) come with ancillary information to support the TPRM function. Additionally, independent bodies develop and circulate such frameworks from time to time.
Our guide will focus on these TPRM-adjacent frameworks to help you create a program that addresses the risks you might face when partnering with a third party, most notably:
- Operational risks
- Cybersecurity risks
- Compliance and regulatory risk
- Reputational risks
The frameworks we’ll discuss can be split into two categories:
- RMFs with a concentrated focus on TPRM
- RMFs that supplement TPRM
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RMFs with a concentrated focus on TPRM
When developing a TPRM program, exploring the following two frameworks can be particularly useful:
- Shared Assessments Program’s TPRM Framework
- NIST 800-161
These frameworks specifically focus on managing third-party risks, though they approach such risks from different perspectives. We’ll outline both options below to help you understand what they entail.
1. Shared Assessments Program’s TPRM Framework
The Shared Assessments Program’s TPRM framework outlines the best practices organizations should include in their overall risk management program to understand and mitigate third-party risks. It revolves around organizations’ practices for fortifying their TPRM programs and recommends incremental changes to mature the TPRM program within resource constraints.
To implement the framework, you’ll explore two areas:
- Fundamentals
- Processes
The following table outlines what each area encompasses:
You can download the framework from the Shared Assessments website.
2. NIST 800-161
NIST 800-161 was first published in 2015 as a supplement to NIST SP 800-53 Revision 5, which addresses supply chain risk management, particularly from the cybersecurity perspective.
The framework is quite elaborate and used by organizations that wish to integrate cybersecurity supply chain risk management (C-SCRM) into their overall risk management program. While implementing NIST 800-161 is only mandatory for federal agencies, you can consider adding its vetted practices to your TPRM program. The practices are split into three categories:
- Foundational practices
- Sustaining practices
- Enhancing practices
Refer to the table below to get an idea of what kind of practices to expect:
The above practices are only the key highlights. For a complete overview of the framework, you can visit NIST’s website.
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RMFs that supplement TPRM programs
Besides the above frameworks designed purposefully for TPRM, you can explore supplemental frameworks that don’t address it directly but can still help improve the program’s effectiveness. Here are four frameworks worth exploring:
- ISO 27001: Provides guidance for developing and implementing robust information security management systems (ISMS). An ISMS is essential for protecting sensitive data across systems, people, and processes from unauthorized access, the chances of which are higher when you work with third parties.
- ISO 27036: Offers a standardized framework with guidelines for procurement and supply chain management, particularly regarding hardware, software, and services.
- NIST RMF 800-37 Rev. 2: Helps organizations integrate information risk management and TPRM into a cohesive program.
- NIST CSF 2.0: Standardizes cybersecurity risk management and may serve as a useful template for developing comprehensive vendor questionnaires.
Benefits of implementing a framework to support TPRM
A TPRM framework standardizes your risk management efforts and gives a clear set of processes that mitigate risks throughout your partnerships with third parties. Other notable benefits include:
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- Reduced vendor dependency and better risk diversification: A TPRM framework can prevent risks like vendor lock-ins and compromised cloud environments that might hinder business growth. It also lets you understand and diversify your third-party risks more effectively.
- Process clarity and reduced waste: You can develop a TPRM framework to outline how you’ll evaluate, onboard, monitor, and offboard third parties, which eliminates inefficiencies and redundant use of resources.
- Improved decision-making for third-party relationships: Thorough due diligence and risk assessments are essential components of a TPRM framework. They help you proactively address anticipated risks and make informed decisions more confidently.
- Enhanced transparency for stakeholders: Stakeholders directly affected by your third-party relationships (customers, investors, etc.) are more likely to trust your organization if you demonstrate an established way of mitigating third-party risks.
- Streamlined compliance: Your TPRM framework will likely consist of practices established by recognized standards and regulations, which makes complying with such standards easier.
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How to select or design the right framework for your TPRM program
Considering that no RMF outlines a fixed TPRM program end to end, it all boils down to customizing frameworks that best align with your current security goals and supply chain specifics. While browsing different frameworks or designing one, consider the following criteria:
- Framework’s scope: Certain RMFs focus heavily on a specific type of risk (e.g., cybersecurity), while others lean toward addressing supply chain risks. You need to look into which one is more relevant to you.
- Integration with your existing workflows: Ideally, your selected framework(s) will complement existing processes and call for incremental changes instead of making you overhaul your workflows.
- Vendor risk coverage: Consider opting for a framework that goes beyond third-party risks and gives you additional insight into fourth (and Nth) parties.
- Regulatory and technology landscape: Some industries, like healthcare and finance, are subject to strict regulations that address third-party risk, so complying with them directly impacts your TPRM program. Your chosen framework will also depend on your hardware and software solutions (e.g., if your sensitive data is stored in the cloud, you may prefer a cybersecurity-oriented framework).
If selecting a particular framework seems too limiting, you can design your own based on the best practices derived from different options. At this point, you should also consider exploring a robust risk management platform that ensures your TPRM program isn’t slowed down by manual processes and inefficiencies.
Implement RMFs and TPRM programs efficiently with Vanta
Vanta is an trust management platform—powered by AI— that helps teams of all sizes automate compliance, manage risk, and prove trust. Among its various solutions, it offers a comprehensive Vendor Risk Management product equipped with valuable features that let you develop a TPRM program, such as:
- Centralized vendor inventory: All third parties are organized in a unified inventory and can be easily categorized into risk tiers.
- An extensive dashboard: You get a bird’s-eye overview of useful data on vendor status, risk profile, category, etc.
- Simplified risk assessments: Vanta auto-scores inherent vendor risk based on industry-standard criteria (you can also customize them to your liking).
- Shadow IT discovery: You can detect all third-party apps used by your organization to identify vulnerable data exposure points proactively.
- Security review tracking: Vanta lets you keep track of vendor security reviews from one place, replacing tedious email back-and-forths.
The platform comes with pre-built content and guidance for implementing over 20 major frameworks, including:
You can also build custom frameworks with controls that serve any specific TPRM or security needs.
Watch this webinar to explore Vanta’s TPRM-support functionalities. Or schedule a custom demo with our team.
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Introduction to TPRM
Understanding third-party risk management (TPRM) frameworks
Introduction to TPRM
Implementing a third-party risk management (TPRM) program in a macroeconomic environment typically calls for a systemized approach. According to a Deloitte survey, 63% of respondents find that their main TPRM focus area is to revisit and refresh the overall methodology used by their organization.
If you’re looking to mature your security program and build stable third-party relationships today, using a third-party risk management framework is essential. In this article, we’ll cover everything you should know about TPRM frameworks, including:
- Their meaning and importance
- Examples of recognized frameworks that can assist your TPRM program
- Actionable tips for selecting appropriate frameworks
What is a third-party risk management framework?
A TPRM framework gives organizations a formalized roadmap with conventional wisdom and best practices for building a comprehensive TPRM program. It’s important to note that there’s no globally recognized framework dedicated to regulating or standardizing TPRM programs. As a result, it’s common for TPRM frameworks to be developed internally, according to an organization’s needs and risk profile.
The lack of standardization might seem like a significant challenge in developing a framework as it creates uncertainty around what should be considered a good or bad practice.
The good news is that you still have options—many established risk management frameworks (RMFs) come with ancillary information to support the TPRM function. Additionally, independent bodies develop and circulate such frameworks from time to time.
Our guide will focus on these TPRM-adjacent frameworks to help you create a program that addresses the risks you might face when partnering with a third party, most notably:
- Operational risks
- Cybersecurity risks
- Compliance and regulatory risk
- Reputational risks
The frameworks we’ll discuss can be split into two categories:
- RMFs with a concentrated focus on TPRM
- RMFs that supplement TPRM
{{cta_withimage5="/cta-modules"}}
RMFs with a concentrated focus on TPRM
When developing a TPRM program, exploring the following two frameworks can be particularly useful:
- Shared Assessments Program’s TPRM Framework
- NIST 800-161
These frameworks specifically focus on managing third-party risks, though they approach such risks from different perspectives. We’ll outline both options below to help you understand what they entail.
1. Shared Assessments Program’s TPRM Framework
The Shared Assessments Program’s TPRM framework outlines the best practices organizations should include in their overall risk management program to understand and mitigate third-party risks. It revolves around organizations’ practices for fortifying their TPRM programs and recommends incremental changes to mature the TPRM program within resource constraints.
To implement the framework, you’ll explore two areas:
- Fundamentals
- Processes
The following table outlines what each area encompasses:
You can download the framework from the Shared Assessments website.
2. NIST 800-161
NIST 800-161 was first published in 2015 as a supplement to NIST SP 800-53 Revision 5, which addresses supply chain risk management, particularly from the cybersecurity perspective.
The framework is quite elaborate and used by organizations that wish to integrate cybersecurity supply chain risk management (C-SCRM) into their overall risk management program. While implementing NIST 800-161 is only mandatory for federal agencies, you can consider adding its vetted practices to your TPRM program. The practices are split into three categories:
- Foundational practices
- Sustaining practices
- Enhancing practices
Refer to the table below to get an idea of what kind of practices to expect:
The above practices are only the key highlights. For a complete overview of the framework, you can visit NIST’s website.
{{cta_simple17="/cta-modules"}}
RMFs that supplement TPRM programs
Besides the above frameworks designed purposefully for TPRM, you can explore supplemental frameworks that don’t address it directly but can still help improve the program’s effectiveness. Here are four frameworks worth exploring:
- ISO 27001: Provides guidance for developing and implementing robust information security management systems (ISMS). An ISMS is essential for protecting sensitive data across systems, people, and processes from unauthorized access, the chances of which are higher when you work with third parties.
- ISO 27036: Offers a standardized framework with guidelines for procurement and supply chain management, particularly regarding hardware, software, and services.
- NIST RMF 800-37 Rev. 2: Helps organizations integrate information risk management and TPRM into a cohesive program.
- NIST CSF 2.0: Standardizes cybersecurity risk management and may serve as a useful template for developing comprehensive vendor questionnaires.
Benefits of implementing a framework to support TPRM
A TPRM framework standardizes your risk management efforts and gives a clear set of processes that mitigate risks throughout your partnerships with third parties. Other notable benefits include:
- Reduced vendor dependency and better risk diversification: A TPRM framework can prevent risks like vendor lock-ins and compromised cloud environments that might hinder business growth. It also lets you understand and diversify your third-party risks more effectively.
- Process clarity and reduced waste: You can develop a TPRM framework to outline how you’ll evaluate, onboard, monitor, and offboard third parties, which eliminates inefficiencies and redundant use of resources.
- Improved decision-making for third-party relationships: Thorough due diligence and risk assessments are essential components of a TPRM framework. They help you proactively address anticipated risks and make informed decisions more confidently.
- Enhanced transparency for stakeholders: Stakeholders directly affected by your third-party relationships (customers, investors, etc.) are more likely to trust your organization if you demonstrate an established way of mitigating third-party risks.
- Streamlined compliance: Your TPRM framework will likely consist of practices established by recognized standards and regulations, which makes complying with such standards easier.
{{cta_withimage5="/cta-modules"}}
How to select or design the right framework for your TPRM program
Considering that no RMF outlines a fixed TPRM program end to end, it all boils down to customizing frameworks that best align with your current security goals and supply chain specifics. While browsing different frameworks or designing one, consider the following criteria:
- Framework’s scope: Certain RMFs focus heavily on a specific type of risk (e.g., cybersecurity), while others lean toward addressing supply chain risks. You need to look into which one is more relevant to you.
- Integration with your existing workflows: Ideally, your selected framework(s) will complement existing processes and call for incremental changes instead of making you overhaul your workflows.
- Vendor risk coverage: Consider opting for a framework that goes beyond third-party risks and gives you additional insight into fourth (and Nth) parties.
- Regulatory and technology landscape: Some industries, like healthcare and finance, are subject to strict regulations that address third-party risk, so complying with them directly impacts your TPRM program. Your chosen framework will also depend on your hardware and software solutions (e.g., if your sensitive data is stored in the cloud, you may prefer a cybersecurity-oriented framework).
If selecting a particular framework seems too limiting, you can design your own based on the best practices derived from different options. At this point, you should also consider exploring a robust risk management platform that ensures your TPRM program isn’t slowed down by manual processes and inefficiencies.
Implement RMFs and TPRM programs efficiently with Vanta
Vanta is an trust management platform—powered by AI— that helps teams of all sizes automate compliance, manage risk, and prove trust. Among its various solutions, it offers a comprehensive Vendor Risk Management product equipped with valuable features that let you develop a TPRM program, such as:
- Centralized vendor inventory: All third parties are organized in a unified inventory and can be easily categorized into risk tiers.
- An extensive dashboard: You get a bird’s-eye overview of useful data on vendor status, risk profile, category, etc.
- Simplified risk assessments: Vanta auto-scores inherent vendor risk based on industry-standard criteria (you can also customize them to your liking).
- Shadow IT discovery: You can detect all third-party apps used by your organization to identify vulnerable data exposure points proactively.
- Security review tracking: Vanta lets you keep track of vendor security reviews from one place, replacing tedious email back-and-forths.
The platform comes with pre-built content and guidance for implementing over 20 major frameworks, including:
You can also build custom frameworks with controls that serve any specific TPRM or security needs.
Watch this webinar to explore Vanta’s TPRM-support functionalities. Or schedule a custom demo with our team.
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