66% of respondents say they should be assessing more than three quarters of their top tier vendors but aren’t doing so
A significant percentage of organisations are drastically unprepared to address supply chain disruptions. A study by Prevalent and Shared Assessments reveals and extreme lack of confidence and dissatisfaction in programs and tools to manage third parties.
Many companies are not dedicating proper resources to assess third-party risks, and those that are still lack confidence in their programs, according to the research.
As a result, there are real consequences including loss of revenue, loss of productivity, and loss of reputation – all of which can jeopardise resiliency and are amplified given today’s supply chain concerns related to COVID-19.
“Organisations are starting to ask the question about what happens to them if their supply chain partners go out of business. Sadly, most companies don’t have the risk visibility into their supply chains to answer that question,” stated Brenda Ferraro, vice president of third-party risk at Prevalent. “How can they expect to adequately manage their own risk without understanding the risks vendors and partners pose?”
Key findings from the research include:
- 54% of organisations have some meaningful experience in conducting third-party risk assessments, yet only 10% are extremely confident in their programs;
- 76% of respondents said that they experienced one or more issues that impacted vendor performance – resulting in a loss of productivity (39%), monetary damages (28%) and a loss of reputation (25%);
- 66% of respondents say they should be assessing more than three-fourths of their top tier vendors but aren’t doing so;
- Lack of resources (74%), cost (39%) and insufficient processes (32%) are keeping respondents from assessing all their top-tier vendors, and
- Satisfaction levels among existing tools hovers in the 50% range, and weighted average of satisfaction caps out at 3.8/5.0. Governance, risk management and compliance tools have an especially long way to go with a 41% satisfaction rate.