Objective measurement is important for monitoring third-party security performance across the organization. This blog explains why a consistent and easy-to-understand scoring system for quantifying your TPRM program will improve decision-making, enhance visibility, and demonstrate the value of your strategy.
The Fundamentals of Scoring and Reporting
The idea of having a system of metrics is to help assess, monitor and prioritize risk. Not all third-party relationships are the same and not all assessments have the same requirements. With qualitative and quantitative insights on your third-party ecosystem security performance, as well as your own security posture, you’ll be able to understand the potential impact a vendor may have on the business and the overall health of the TPRM program.
Read more: 5 key indicators for your third-party risk management dashboard
Our Formula for Understanding Risk
To make customized assessments or industry standard security questionnaires simpler to analyze, ThirdPartyTrust has created a scoring system to help security analysts understand how a third-party has answered important questions.
The combination of pre-built and customized metrics allows teams to score the potential impact a third-party may have on the business. Metrics to calculate the impact score include but are not limited to:
- Ease of replacement
- Type of data the third-party has access to
- Volume of data the third-party has access to
- Criticality of service
The trust score provides an understanding of how trustworthy a third-party is based on evidence provided by them and data gathered externally. The categories are a binary measure with a percentage weight associated with the importance of the category. The Trustscore is on a 0-100% scale. These categories may include:
- Questionnaire scores
- Certificates
- Insurances
- External audits and assessments
Furthermore, the risk score is a simple algorithm that calculates a score 0-100 based on the impact and trust scores. It provides a holistic understanding of the third-party risk to your business. The higher the impact score, the higher the risk. The higher the trust score, the lower the risk.
The best part? All of this happens automatically and can be used to develop a hierarchical scoring framework inside assessments.
Conclusion
With hundreds of third-parties and a global pandemic potentially limiting your resources or operations, you must focus on the highest risks. Centralized, aggregated data is the right path to quantifying your TPRM program and learning how to prioritize efforts.
To learn more about how ThirdPartyTrust can help you streamline your TPRM program and comply with industry standards, request your free trial now:
