How to build a robust third‑party risk management (TPRM) program 

Third‑party risk isn’t a new concept. Organizations have outsourced services for decades. What has changed is the scale and criticality of those services. As businesses moved away from internal data centers and toward cloud infrastructure and SaaS platforms, they also outsourced large portions of their security responsibilities. Today, everything from HR systems and CRM platforms to core infrastructure is often managed by external providers. 

When that shift happened, risk moved outside the organization’s direct control. Instead of managing security internally, organizations now must trust and verify that third parties are protecting their data appropriately. That dependency has fundamentally changed the risk landscape. Understanding how vendors manage security, what controls they have in place, and how they handle incidents is no longer optional. It’s essential. 

Why many TPRM programs fall short 

1. Point-in-time assessments 

One of the most common issues I see is that organizations rely on point‑in‑time assessments. A vendor completes a questionnaire at the beginning of a contract, confirms that controls are in place, and then isn’t reviewed again until the contract is renewed. From a compliance standpoint, that may check a box, but from a risk standpoint, it’s largely ineffective. 

Risk is not static. Vendors change. Their security posture evolves. New subcontractors are introduced. Breaches occur. Without ongoing visibility, organizations are blind to those changes. 

2. Treating all vendors the same 

Another clear sign of an immature program is treating all vendors the same. When a low‑risk vendor such as one managing employee swag or marketing materials goes through the same level of scrutiny as a vendor managing core infrastructure, the program fails in two ways: 

• The business is slowed down by unnecessary friction 

• Truly critical vendors don’t receive the level of due diligence they require 

A mature TPRM program understands vendor criticality in the context of the business and allocates effort accordingly. 

What a mature TPRM program looks like 

The difference between a basic program and a mature one comes down to context and continuity. A mature program: 

• Classifies vendors based on risk and criticality 

• Applies different assessment depths and frequencies accordingly 

• Includes continuous monitoring for high‑risk and critical vendors 

• Aligns incident response plans with third‑party scenarios 

• Integrates smoothly with procurement and vendor management workflows 

• Manages vendors throughout their lifecycle, not just at onboarding 

Key actions for building a truly effective TPRM program 

When organizations ask where to focus their efforts, my answer is simple: 

1. Establish strong governance 

Before tools, automation, or assessments, organizations must define their rules. That includes: 

• Risk tolerance and appetite 

• What makes a vendor critical 

• How often vendors should be assessed 

• What actions are required when risk thresholds are exceeded 

Without governance, tools can’t be configured correctly, and programs become inconsistent and reactive. 

2. Treat TPRM as a business process 

While TPRM often sits under cybersecurity, it is fundamentally a business process workflow. Procurement owns vendor onboarding. Legal owns contracts. The business owns vendor relationships. Security is a contributor, not the owner. A mature TPRM program supports procurement rather than slowing it down. The goal is to apply the right level of due diligence, not too much and not too little, while keeping the business moving. 

Rules before tools 

If there’s one directive I would give to any organization building or improving a TPRM program, it’s to set up the program before you buy the tool. A well‑designed TPRM program protects the organization, enables the business, and scales as vendor ecosystems grow. When governance, process, and tooling are aligned, third‑party risk becomes manageable. 

Want to design a program that actually works? Get started with our TPRM Blueprint here.