
An Introduction to Vendor Management
Vendor risk management, or VRM, is a program within an organization that is in charge of identifying and mitigating vendor risks
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CIO Applications Europe | Monday, October 04, 2021

Vendor risk management, or VRM, is a program within an organization that is in charge of identifying and mitigating vendor risks. What exactly is a vendor? While the terms "vendor" and "third-party" are sometimes used interchangeably, a vendor is most often a service provider or information technology (IT) supplier.
Fremont, CA: Vendor risk management, or VRM, is a program within an organization that is in charge of identifying and mitigating vendor risks. What exactly is a vendor? While the terms "vendor" and "third-party" are sometimes used interchangeably, a vendor is most often a service provider or information technology (IT) supplier.
What is Vendor Risk Management (VRM)?
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Vendor risk management, or VRM, is a program within an organization that is in charge of identifying and mitigating vendor risks. What exactly is a vendor? While the terms "vendor" and "third-party" are sometimes used interchangeably, a vendor is most often a service provider or information technology (IT) supplier.
The pandemic has resulted in a sudden increase in vendor and third-party dependency as people left their workspaces and settled into their home offices under the guise of strict work from home (WFH) policies over the last few years. With so many people connecting to their businesses remotely and sending and storing critical data in cloud systems, having a strong VRM strategy in place has never been more important. A solid VRM strategy should include the following components:
- Analyzing current third parties and optimizing where necessary
- Compliance
- Upholding vendor contracts
- Understanding the flow of data and who has access to that data
- Monitoring security controls
All of these components can be accomplished effectively with the help of well-designed and well-optimized tools and programs. ServiceNow provides tools for automated supply chain assessments, transparent reporting, and consistent supply chain remediation. With features such as:
Portfolio management — Replaces spreadsheets and manual tracking with a centralized database of vendors, the products and services they provide, contacts, and a self-service portal for easy vendor updates.
Assessment management — One can use the built-in SIG questionnaires or design one's own with the drag-and-drop designer. Online vendor or engagement assessments lead to a faster response and more accurate information.
Vendor tiering — A tiering process allows one to establish an appropriate frequency and assessment cycle for one's vendors.
See Also; Business Management Review
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