Third-party trust management

The COVID-19 pandemic has caused organizations to shift their mindset for managing third-party risks and performance. Instead, leaders are moving towards a proactive strategy of establishing trust. Third-party networks are becoming increasingly more complex. Regulators now require organizations to monitor financial health, information security, and business continuity of third-parties more closely. In response, many organizations have used technology to establish enhanced controls and more oversight. This provides organizations with unprecedented visibility and influence over their supply chains. However, it comes at a cost to their third-party risk management (TPRM) programs, which were designed unilaterally and administered as perfunctory. The results? Trust issues develop across both buying and selling organizations. Programs built on survey responses and collecting artifacts, rather than on establishing trust, do not optimally guard against risks. They also don’t reward performance in the extended enterprise.

What does this mean for you?

Answering no to any of the questions outlined above may represent a lack of trust in your third-party relationships. This presents risks to your organization, inhibiting authenticity and collaboration. Conversely, responding yes to the questions above is indicative of a deeper level of trust with your third-parties, meaning greater transparency and influence that goes beyond just governance. Increased trust allows for conversations to shift away from administrative risk questionnaires and collection of artifacts, to collaborative conversations around innovation, strategic growth, and enhanced performance.

Building trust in this new era

How can you rebuild third-party trust today? 

Discover how we can help you establish trust in third-party risk management:

• Embed the trust framework into your TPRM framework and methodologies, segmenting your third-parties not only on their level of inherent risk, spend, performance, and strategic value, but also on the level of trust needed to operate collaboratively.
• Simplify where existing risk management programs within your organization may be unilateral, administrative, or overly complex. Create the space and capacity to establish trust.
• Humanize digital solutions that have made interactions between buying and selling organizations more efficient and automated. It’s important to remember that this cannot be a complete substitute for establishing trust in third-party relationships. Your most trusted relationships can be amplified with human-centred design that’s bolstered by bi-directional third-party engagement.

Let’s connect

Look beyond the traditional risk-management mindset.

Contact us today to explore how a third-party trust management program can optimize how your organization measures, monitors, and mitigates trust.

References:

¹ Deloitte, 2021 Global Chief Procurement Officer Survey, 2021

² Deloitte, Third-party risk management (TPRM) global survey 2021, 2021