Managing Third-Party Vendor Risk without a Dedicated Team

High-profile breaches have shown that attackers often take the path of least resistance—and that path is frequently through a third party. The 2013 Target breach is the textbook example: attackers used a compromised HVAC vendor to access Target’s network, leading to a massive payment card data breach.

Regulators are also paying closer attention. Frameworks like SOC 2, ISO 27001, PCI DSS, and NIST CSF require organizations to assess and manage third-party risk. Even if you aren’t required by law, your customers increasingly expect you to demonstrate a formal process.

Ignoring vendor risk leaves your organization vulnerable to:

• Data breaches caused by insecure vendors
• Operational disruptions if a critical provider goes offline
• Regulatory fines for failing to protect customer data
• Reputational damage if your customers’ trust is broken

For organizations without a dedicated TPRM team, the goal is not to boil the ocean. It’s to identify the vendors that could do the most harm, assess them appropriately, and document your process for management and auditors.

Step 1: Build a Standard and Strategy

Managing third-party risk starts with a strategy at the company level. Before sending questionnaires or chasing down vendors, define what matters most to your organization:

• Risk appetite – Are you willing to work with lower-cost, less mature vendors if it saves money? Or do you prefer established players with strong controls?
• Data sensitivity – What types of data do you handle (PII, PHI, financial data, intellectual property)? Which vendors have access to it?
• Business criticality – Which vendors would halt operations if they went down?

Creating a set of data points you care about is the foundation of your program. For each vendor, consider:

• What does this vendor do for us?
• What data do they process, and how much?
• How do we authenticate to the vendor (SSO, local accounts, API keys)?
• What is the maximum impact if they are breached or taken offline?
• How mature are their security and operational resiliency programs?

Documenting these questions creates a repeatable process that can be scaled later, whether manually in Excel or through a dedicated VRM platform.

Step 2: Tier Your Vendors

You can’t treat every vendor like Microsoft Azure—or your office cleaning crew. Vendor tiering helps you focus your limited resources where they matter most.

A simple three-tier model works well:

• Tier 1 (Critical Vendors): Vendors that access, store, or process sensitive data, or are essential to your operations. Example: your cloud provider, payroll service, or core banking software.
• Tier 2 (Important Vendors): Vendors that support business processes but do not handle sensitive data or directly impact operations if unavailable for a short period. Example: marketing platforms or training providers.
• Tier 3 (Low-Risk Vendors): Vendors with no data access and minimal operational impact. Example: office supplies, landscaping services.

Once tiered, assign different levels of scrutiny:

This approach balances coverage with practicality, so you aren’t wasting time chasing vendors that pose little risk.

Step 3: Embed Risk Reviews into Business Processes

One of the easiest ways to scale as a team of one is to build vendor risk management into your existing procurement and renewal processes.

• New vendors: Require an intake form before purchase approval, asking the data points you defined in Step 1.
• Contract renewals: Treat renewal time as “paperwork time.” Update your records, review any new security reports, and confirm the vendor still meets your criteria.
• No exceptions policy: Ensure finance doesn’t pay vendors who are not in your vendor risk database.

This keeps your list clean and ensures no vendor slips through the cracks.

Step 4: Use Lightweight Tools and Automation

You don’t need a full-featured Governance, Risk, and Compliance (GRC) platform on day one. Many organizations successfully run early-stage programs with spreadsheets and simple forms.

Some cost-effective options:

• Spreadsheets + Forms: Maintain a centralized vendor inventory and collect intake data using a simple spreadsheet and web form.
• External Security Ratings: Consider services that provide an outside-in view of a vendor’s security posture to flag major risks without manual assessment.
• Lightweight Automation: If you have a small budget, use basic questionnaire automation tools that help send, collect, and track vendor responses in one place.

Start with simple solutions to get visibility, then expand as your vendor list and program maturity grow.

Step 5: Focus on Actionable Outcomes

The goal is not to check boxes but to make informed, risk-based decisions. Once you have assessment results, apply them to drive action:

• Mitigate risks with contractual clauses (e.g., breach notification, subprocessor approvals).
• Require vendors to implement MFA, encryption, or vulnerability remediation.
• Choose not to engage with vendors who cannot meet minimum security expectations.

Remember: the point is not to collect questionnaires from every vendor, but to prevent incidents that could damage your organization.

Step 6: Keep the Program Iterative

Vendor risk management is not a one-time exercise. As your business grows, so will your vendor list. Start small, then refine and tighten controls over time:

• Add new questions to your intake process as patterns emerge.
• Expand review cycles from annual to semiannual for Tier 1 vendors.
• Track vendor incidents to adjust risk ratings dynamically.

Mistakes will happen. Learn from them and continuously improve.

Step 7: Get Executive Buy-In

Even the best process fails if leadership doesn’t support it. Share metrics with executives:

• Number of vendors assessed
• Risk tiers distribution (e.g., 20 critical, 50 medium, 200 low)
• Identified risks and remediation efforts

Tie vendor risk to business outcomes—customer trust, regulatory compliance, operational continuity—to secure budget and resources.

Step 8: Consider a vCISO for Oversight

If you don’t have an internal team, a virtual Chief Information Security Officer (vCISO) can be a powerful force multiplier. A vCISO brings:

• Experience: Having run vendor risk programs across multiple industries
• Framework alignment: Ability to align your program to SOC 2, ISO 27001, NIST CSF, and industry regulations
• Process design: Help building your tiering model, intake forms, and reporting metrics
• Executive communication: Translating risk into board-level language

This allows your organization to manage vendor risk effectively without hiring a full-time team.

Final Thoughts

Managing third-party risk without a dedicated team is challenging, but not impossible. By setting clear standards, tiering your vendors, embedding reviews into procurement, using lightweight tools, and focusing on high-impact risks, you can build a program that is both practical and defensible.

And if you need expertise to guide your journey, our vCISO services can help design, scale, and maintain a vendor risk program tailored to your organization’s needs. Contact us today to learn how we can help you reduce third-party risk and protect your business.