No Surprise: New Survey Confirms That Most Organizations Are Ineffective at Third-Party Risk Management
A new report published by the Ponemon Institute confirms that organizations are spending an increasing amount on third-party risk management, but are failing to realize much value for their efforts. Risk prioritization may be the solution.
The report, titled “The Cost of Third-Party Cybersecurity Risk Management,” summarizes a survey of over 600 respondents. The key findings:
- A significant majority of respondents report that they spend between US$500,000 and US$5,000,000 annually on third-party cybersecurity risk management.
- However, approximately the same number also believe that their efforts are not particularly effective.
The overall conclusion of the report is that organizations don’t need to invest more in third-party risk management. Instead, they need to invest better. Interestingly, the findings don’t support a wholesale adoption of automation over manual processes. Instead, the key to greater efficiency seems to be better risk prioritization.
The survey was sponsored by CyberGRX, a third-party risk management vendor that offers security assessments as a service.
Our Take
This report confirms Info-Tech’s recommendation that the best path towards an efficient and effective vendor security assessment process is one that uses risk to guide due diligence activities. Current vendor offerings in this space can play an important part of this process, but are not in and of themselves the solution to existing inefficiencies. We continue to assert that organizations should build a risk-based process and then consider how products or services may help drive improvements.