Third party risk management is a critical value driver for procurement. Organizations rely on procurement to identify, assess, and mitigate risks and threats within third parties such as suppliers, contractors, or providers. As companies continue to increase their reliance on third parties to deliver goods and services, third party risk management is an essential component of overall risk management and critical for maintaining a resilient and compliant supply chain.
To ensure a comprehensive, collaborative approach to risk awareness, procurement needs to implement best practices for third party risk management like continuous monitoring enabled by technology, implementing risk thresholds or escalation protocols, and close collaboration with key stakeholders like legal, finance, and IT. Successful third party risk management not only mitigates potential disruptions but it also builds stronger, more productive supplier relationships that create long-term value for all stakeholders.
