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The Procurement Leader’s Guide to Supplier Cyber Risk Management

Brought to you by the world's leading provider of supplier onboarding, risk management and recovery solutions.

Introduction

Cyber incidents among suppliers can have a significant impact on your operations as well as leading to harmful breaches of data.

 

If your Procurement team’s success metrics include measures relating to cost avoidance, resilience or availability, you might already be managing (or trying to manage) supplier cyber risks.

 

If you aren’t, you’re  in the majority according to statistics from the UK government.

An image showing results from research forming part of the Cyber Security Breaches Survey 2024 by the UK Government. The results can be found in figure 3.2 of the survey report which is available at the address https://www.gov.uk/government/statistics/cyber-security-breaches-survey-2024/cyber-security-breaches-survey-2024

The challenge for Procurement teams

Procurement leaders tell us there are meaningful hurdles blocking their journey towards management (or even oversight) of cyber risks among suppliers.

If you face any of these challenges, we’ve helped other companies to address them.

Some Procurement leaders tell us that their mitigation for these challenges is to assure themselves that the company’s Information Security (InfoSec) team are proactively managing these vendor risks on their behalf.

In these cases, they often accept that a lack of visibility into this activity means their team cannot take proactive, risk-aware action with their suppliers.

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Lack of time

in an already stretched Procurement team.

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Lack of expertise

within their Procurement team.

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Lack of collaboration

with suppliers or internal stakeholders.

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Lack of adoption

for other recent initiatives.

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Lack of budget

to address this risk at scale.

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Lack of clarity

over whether this risk sits with Procurement.

Managing this risk can be part of the Procurement process

Managing cyber risks among suppliers is possible within Procurement. With the right choice of technology and enablement, your Procurement team can make cyber risk-aware decisions throughout the Procurement process. By supporting this with clear and consistent reporting which is aligned to established company metrics, Procurement can demonstrate the value of its activity across the business.

Achieving this level of oversight and risk management could benefit Procurement leadership in a number of ways (in addition to helping reduce unexpected cost, harm and disruption).

It demonstrates a business-outcome-focused approach to managing the Procurement function. It supports the positioning of Procurement as a strategic asset. It forms part of your initiative to establish your Procurement team as a coveted centre of excellence.

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Supplier selection

Assess potential suppliers early in the sourcing process so your team can make risk-aware buying decisions and seek assurances where necessary.

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Contracting

Set clear expectations within supplier contracts. This should be in-line with your company policies and may reference concerns raised at the previous stage.

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Supplier onboarding

Collect the necessary documentation and verify it where necessary. Support this with automated monitoring for emerging concerns and new incidents.

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Supplier management

Use automation and up-to-date reporting to enable collaboration and inform supplier management conversations to help maintain standards.

How Procurement teams can approach this risk

With the above challenges in mind, this vision could seem overly ambitious. When working with Procurement leaders for the first time, we begin by exploring the challenges they face then help them to understand the impact of our supplier cyber risk management capability through the lens of the ‘Four Ss‘:

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Speed

Near-instant assessments, immediately accessible reporting and clearly understandable next steps to help your team make risk-aware decisions quickly.

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Scale

Up to 100% supplier coverage, reducing gaps in your risk visibility and promoting resilience at scale. Supported by automations to maintain actionability.

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Scope

A broadened risk horizon with extensive monitoring capabilities, encompassing both existing vulnerabilities and emerging threats. All presented in a way which empowers collaboration with suppliers and internal teams.

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Service

Meaningful support which becomes an extension of your team. Benefit from up-front training, ongoing enablement and on-hand expertise to help your team how then need it and when they need it.

Inevitably, there will be additional things to consider which reflect your internal policies, politics and processes. Your specific industry or location might also influence the way you approach supplier cyber risk management.

Ensure your chosen solution allows the flexibility to complement your business. Driving adoption internally is difficult enough without forcing people to work with a system that doesn’t work for them.

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Communicate the business risks

Cyber sounds technical. There’s a tendency to see it as an IT problem but the impact is largely on the business.

Help your team to think about the impact if different types of suppliers were suddenly unavailable to deliver on their obligations.

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Embrace automation

When properly implemented, automated assessments can scale your approach and ensure consistency.

Automation also encourages team adoption. Category Managers struggle with adding manual processes to their workload.

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Empower collaboration

A collaborative approach could be the difference between reporting on risks and managing them.

Consider how your approach empowers with internal stakeholders and externally (by enabling suppliers to act and respond).

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Implement monitoring

Supplier questionnaires are an important part of onboarding but you should consider how you will uncover emerging concerns.

Ensure your approach compensates for this with monitoring which can highlight fresh concerns and trigger the appropriate response.

Discover apexanalytix | Cyber Risk

Our capability is used by Procurement teams to help enhance their oversight of cyber risks among suppliers from the selection stage onwards.

 

It is flexible, provides fast visibility of actionable information and is built with collaboration in mind.

 

You can implement it with apexportal, as a standalone solution or even embedded into other Procurement platforms.

Explore apexanalytix | Cyber Risk
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