Cyber risks are increasingly emerging outside an organization’s own boundaries. Service providers, suppliers, and technology partners are becoming critical factors influencing an organization’s overall security and compliance posture.

At the same time, many organizations lack a centralized and reliable view of risks across the entire supply chain. Information is dispersed across multiple systems, assessments are inconsistent, and processes are often manual and difficult to scale.

KPMG supports organizations in systematically identifying, assessing, and continuously monitoring cyber security and information security risks throughout the entire supply chain.

In contrast to isolated assessments, a structured managed service enables the ongoing and scalable governance of third‑party risks—from initial assessment through continuous monitoring.

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C‑SCRM: Typical risks in dealing with third parties and suppliers

Lack of transparency regarding third parties

Organizations work with a large number of service providers, suppliers, and partners. However, information on risks, criticality, and dependencies is dispersed across multiple systems.

Your value with KPMG:

Consistent risk classification based on clearly defined criteria such as system access, data processing, and criticality
A centralized data foundation for all third parties, including dependencies and risk assessments
Prioritization of critical third parties as a basis for targeted governance measures

Security incidents at third parties

Situation: A cyber attack at a supplier suddenly escalates into an immediate risk for the organization.

Your value with KPMG:

Continuous assessment of third parties based on the current threat landscape
Transparency regarding critical dependencies and their potential impact
Early identification and notification of security incidents at service providers

Manual and inefficient processes in Cyber Supply Chain Risk Management

The management of third‑party risks is handled through Excel spreadsheets, emails, and manual individual assessments. These processes are slow, error‑prone, not scalable, and often not audit‑ready.

Your value with KPMG:

Digitalization and standardization of all C‑SCRM processes using central platforms such as ServiceNow
Automated data collection, assessment, and continuous updating of risk profiles
Reduction of manual coordination efforts and significantly shorter cycle times

Regulatory pressure from NIS‑2 and DORA

A NIS‑2 audit is upcoming—and Cyber Supply Chain Risk Management must be demonstrably traceable and defensible to auditors.

Your value with KPMG:

Implementation of regulatory requirements such as NIS‑2 across the entire contract lifecycle
Audit‑ready documentation of all assessments, measures, and decisions
Structured reports and traceable processes to support audit preparation

Lack of transparency regarding third parties Security incidents at third parties Manual and inefficient processes in Cyber Supply Chain Risk Management Regulatory pressure from NIS‑2 and DORA

Lack of transparency regarding third parties

Organizations work with a large number of service providers, suppliers, and partners. However, information on risks, criticality, and dependencies is dispersed across multiple systems.

Your value with KPMG:

Consistent risk classification based on clearly defined criteria such as system access, data processing, and criticality
A centralized data foundation for all third parties, including dependencies and risk assessments
Prioritization of critical third parties as a basis for targeted governance measures

Security incidents at third parties

Situation: A cyber attack at a supplier suddenly escalates into an immediate risk for the organization.

Your value with KPMG:

Continuous assessment of third parties based on the current threat landscape
Transparency regarding critical dependencies and their potential impact
Early identification and notification of security incidents at service providers

Manual and inefficient processes in Cyber Supply Chain Risk Management

The management of third‑party risks is handled through Excel spreadsheets, emails, and manual individual assessments. These processes are slow, error‑prone, not scalable, and often not audit‑ready.

Your value with KPMG:

Digitalization and standardization of all C‑SCRM processes using central platforms such as ServiceNow
Automated data collection, assessment, and continuous updating of risk profiles
Reduction of manual coordination efforts and significantly shorter cycle times

Regulatory pressure from NIS‑2 and DORA

A NIS‑2 audit is upcoming—and Cyber Supply Chain Risk Management must be demonstrably traceable and defensible to auditors.

Your value with KPMG:

Implementation of regulatory requirements such as NIS‑2 across the entire contract lifecycle
Audit‑ready documentation of all assessments, measures, and decisions
Structured reports and traceable processes to support audit preparation

We establish clear structures to ensure that third‑party risks are addressed deliberately rather than on an ad‑hoc basis.

Justina Stunzenaite

Senior Managerin, Consulting - Cyber Security & Resilience

KPMG in Germany

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Markus Limbach

Partner, Consulting - Cyber Security & Resilience

KPMG AG Wirtschaftsprüfungsgesellschaft

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KPMG Cyber Supply Chain Risk Management:
Integrated service across the entire contract lifecycle

KPMG delivers Cyber Supply Chain Risk Management as a scalable service covering the full third‑party lifecycle—from onboarding and due diligence through to ongoing monitoring. Organizations benefit from predictable services, clear responsibilities, and reliable outcomes. Rather than limiting activities to assessments, risks are actively managed and continuously monitored.

In contrast to traditional consulting approaches, the service does not end after a project phase. Instead, it includes the full operational ownership of activities required to govern and continuously enhance the entire C‑SCRM process.

Organizations are specifically relieved where internal capacities are limited or processes are not scalable. Complex and time‑intensive tasks are taken over in a structured manner and embedded into standardized workflows.

This includes, among other things:

Execution and follow‑up of assessments
Continuous updating and maintenance of risk profiles
Management of remediation measures and escalation of critical risks
Preparation of reports for management, audits, and regulatory requirements

KPMG combines technology platforms, standardized methodologies, and experienced cyber security teams into an integrated operating model. As a result, risks are not only assessed, but actively managed and sustainably reduced.

The key focus areas include in particular:

Transparency across third‑party risks

A centralized, consolidated view of all third parties, including risk profiles, criticality, and dependencies – as a basis for well‑informed decision‑making.
Consistent assessment and prioritization

Standardized risk classification based on clearly defined criteria and transparent prioritization of critical third parties.
Continuous monitoring instead of one‑off assessments

Regular reassessments, ongoing monitoring, and systematic tracking of remediation actions – ensuring a continuously up‑to‑date risk view.

Regulatory evidence and reporting

Structured, audit‑ready documentation of all assessments, measures, and decisions to support audits and regulatory requirements such as NIS‑2.
Operational relief for internal teams

Assumption of key C‑SCRM activities – from assessments and data maintenance to remediation management – reducing manual effort and enabling scalable processes.

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AI in Cyber Supply Chain Risk Management

Using AI to Build the Next Generation of Resilient Supply Chains

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Frequently Asked Questions about Cyber Supply Chain Risk Management (FAQ)

Modern supply chains are digitally interconnected and highly dependent on third parties. Vulnerabilities at individual service providers can directly impact business processes, systems, or data.

C‑SCRM creates transparency across these dependencies, prioritizes critical third parties, and helps identify and mitigate risks along the supply chain at an early stage.

C‑SCRM primarily addresses cyber and IT risks, data protection and compliance risks, as well as operational and financial risks arising from external partners.

The NIS‑2 Directive requires organizations to actively manage risks across their supply chain. This includes, in particular, the assessment and monitoring of service providers that have an impact on network and information systems.

Vendor Risk Management is the overarching, holistic framework for managing third‑party risks. It encompasses financial, reputational, legal, ESG, compliance, and other risk categories. C‑SCRM focuses specifically on cyber security and information security risks.