Jonathan PrewittThe postings on this site are my own and do not necessarily represent FTI Consulting’s positions, strategies or opinions.
Ladies and gentlemen, welcome back to the ongoing spectacle that is Third-Party Risk Management! We’ve journeyed through vendor vetting, risk assessments, and the often painful reality check that comes after the honeymoon period with your vendor ends. Now, it’s time to step into the world of continuous monitoring—because in the land of TPRM, the show never truly ends.
The Art of Continuous Monitoring: More Than Just a Nudge
Imagine for a moment that managing a vendor relationship is like trying to herd cats. Now, imagine doing that in the dark, with the occasional spotlight flash to help you see what’s going on. That’s continuous monitoring in a nutshell. It’s not about checking in every once in a while to make sure your vendor is still awake—it’s about consistently, methodically, and legally keeping tabs on them to ensure they’re still delivering on their promises.
You see, once upon a time, it was enough to sign a contract, shake hands, and trust that your vendor would do what they said they would. But those days are long gone. In today’s world, where risks evolve faster than you can say “data breach,” continuous monitoring isn’t just a nice-to-have—it’s a necessity.
The Tools of the Trade: Technology to the Rescue
Let’s talk about the tools of the trade. Gone are the days when you’d just rely on a quarterly report or an annual audit to tell you how your vendor is performing. Now, there’s a whole suite of technologies designed to help you keep an eye on your vendors without having to put on a trench coat and sunglasses.
From automated compliance checks to real-time security monitoring, these tools are like your very own surveillance team, working around the clock to ensure your vendors are staying in line. Of course, the key is to actually use these tools—not just sign up for them and forget they exist. It’s one thing to install a security camera; it’s another to actually check the footage.
The Balance Between Trust and Verification
Now, before you start to feel like Big Brother, let’s talk about the balance between trust and verification. Continuous monitoring doesn’t mean you don’t trust your vendors—it just means you’re smart enough to verify that they’re still on track. Think of it like checking in on your teenager: you trust them to behave, but that doesn’t mean you won’t check to make sure the party hasn’t gotten out of hand.
And let’s be honest: trust is great, but trust alone won’t save you from a vendor who’s cutting corners, skimping on security, or quietly breaching your contract. Continuous monitoring allows you to catch these issues early, before they spiral out of control and leave you holding the bag.
Legal and Ethical Considerations: The Fine Line
Of course, all this monitoring comes with its own set of legal and ethical considerations. You can’t just snoop on your vendors like you’re in some corporate espionage thriller—there are rules to follow. You need to make sure your monitoring activities are covered in your contracts, that your vendors are aware of them, and that you’re not crossing any lines that could land you in hot water.
The trick is to strike a balance: be thorough, but not invasive; be diligent, but not paranoid. After all, your goal is to manage risk, not create new ones by overstepping legal boundaries.
Why Continuous Monitoring Matters: The Cost of Complacency
So, why bother with all this monitoring? Because the cost of complacency is far too high. When you fail to keep tabs on your vendors, you’re essentially flying blind, and that’s a recipe for disaster. Vendors can and do change over time—staff turnover, shifts in priorities, financial difficulties, and external threats can all impact their performance. If you’re not paying attention, you might find yourself blindsided by a vendor failure at the worst possible moment.
Continuous monitoring allows you to stay ahead of the curve, catching issues before they become full-blown crises. It’s like having a safety net under your tightrope—hopefully, you’ll never need it, but if you do, you’ll be glad it’s there.
The Bottom Line: Vigilance Pays Off
In the end, continuous monitoring is all about vigilance. It’s about recognizing that your relationship with your vendor doesn’t end when the contract is signed—it evolves, and it needs to be managed accordingly. By staying on top of things, you not only protect your business from unnecessary risks, but you also set the stage for a healthier, more productive relationship with your vendors.
In my next post, I’ll explore “Red Flags and Warning Signs: When Your Vendor Starts Acting Like a Toddler,” where I’ll discuss the early warning signs that your vendor relationship is heading for trouble and what you can do to steer it back on course.
So, keep your eyes open, your tools sharp, and stay tuned for the next act in my TPRM series!
Jonathan Prewitt