The potential benefits of a third-party network can also come with a host of risks. As the global marketplace grows more complex and competitive, third-party relationships become increasingly crucial to decreasing costs, managing risks, enhancing customer experiences, hastening speed-to-market and improving value and profitability.
Without reliable and reputable third parties (i.e., vendors, suppliers, distributors, and contractors — in addition to brokers, agents, resellers, and contract manufacturers), businesses cannot compete with more dynamic organisations in their industry; and by inviting these entities into an organisation’s network, they may also be opening the door to unwelcome risks.
Legal and regulatory compliance, information security/cyber security, business continuity, strategic, financial viability, and reputation risks represent a range of topics that may present surprises if not properly assessed or evaluated to properly manage the respective risks to an organisation.
Third party risk management can enable companies to predict dilemmas and prepare appropriate solutions for the suppliers in their supply chain and it also drives efficiencies and reduce unnecessary expenses.
The KPMG Third-Party Risk Navigator
The KPMG Third-Party Risk Navigator has been developed to bring together the key components of an effective Third-Party Risk Management (TPRM) program while considering their sequencing and interconnectivity. The KPMG Third-Party Risk Navigator focuses on two key sections:
Program oversight:
What are the processes in handling third parties within an organisation in order to mitigate potential risks?
Process oversight:
What is considered in an organisation’s third-party risk program in order to address potential third-party risks?
Behind our third-party risk maturity assessment sits established European and US regulatory guidance, industry standards and market-wide knowledge of third-party risk maturity.
The KPMG Third-Party Risk Navigator is designed to bring clarity to the actions required to enhance a TPRM program by identifying possible risks and weaknesses as well as seeking to improve efficiencies.
We understand that these factors should be considered before engaging in a relationship with a new supplier or renewing one with a long-time supplier.
How can we help you?
We utilise business intelligence tools such as Power BI & Alteryx for Data transformation and creating a dashboard for better analysis & reporting. A Third-Party Risk Management framework is defined within the following three pillars:
Define Supplier Risk Categories & Identify Supplier Risks, including:
- Identification of supplier risk categories (quality, financial, contractual, strategy, environmental)
- Analyse and identify risks for each supplier
Define & Conduct Risk Assessment, including:
- Define factors for risk assessment
- Develop supplier risk assessment plan
- Conduct risk assessment
- Analyse risks using dashboard
- Log issues from assessment
Mitigate risks with controls & monitor periodically, including:
- Define controls
- Monitor risk with periodic assessment
Contact us and read more here
Martin Povelsen
Partner, Digital Risk
KPMG in Denmark
