CUSTOMER PORTAL
There are many challenges that come with working in third-party risk management, but one that always stumps me is explaining to my children exactly what I do for a living. I’ve tried countless analogies, but none seem to stick. The risk and compliance profession doesn’t exactly make the list of top career day favorites in elementary school.
My struggles felt completely validated when I learned that some of risk and compliance professionals have even created children books dedicated to explaining various risk and compliance roles (check out “Being a Compliance Officer is Awesome” and “Compliance Saves the Galaxy” both by Tom Fox, a seasoned compliance evangelist and founder of the Compliance Podcast Network).
So, this year, I’m trying a new analogy, one that even the little ones might appreciate. Every December, Santa Claus manages what might be the most complex global supply chain on earth. Millions of toys, sourced from thousands of elves, suppliers, and delivery partners, all moving on a single night. For centuries, he’s pulled it off flawlessly. But if you look closer, it’s clear that even Santa’s magical operation relies on something very real: good governance and effective third-party risk management.
So, this holiday season, let’s take a journey to the North Pole and explore all the third-party risks Mr. Claus must consider as he plans his big night across the world.
Even at the North Pole, strong governance is the cornerstone of effective third-party risk management (TPRM). Every new partner, whether a toy parts supplier, a sleigh maintenance vendor, or a cookie ingredient distributor, must undergo a thorough risk evaluation. Scoring and tiering these risks involves input from multiple teams to ensure the right level of oversight and accountability before anyone joins Santa’s trusted network.
As winter production ramps up, the elves are working overtime, often calling in outside consultants and leveraging reliable technology to keep the toy-making lines running smoothly. The reindeer division is conducting more frequent test takeoffs, requiring additional support crews to ensure safe and efficient launches.
Meanwhile, Mrs. Claus is introducing new business analytics tools to track global ingredient sourcing for her cookie operations. These tools boost morale across the workshop while helping the team monitor potential greenhouse gas emissions from expanded supply chains.
Amid these activities, Santa himself remains at the helm, juggling executive reports, overseeing new vendor contracts, and ensuring alignment between operations and the mission of delivering joy on time, every time.
To manage such a complex ecosystem, Santa’s Workshop relies on a clear governance framework that defines roles, establishes consistent standards, and ensures accountability at every level. Without strong governance, even the most magical organization would struggle to scale responsibly or evaluate new third parties before they contribute to mission-critical operations, especially with the big night fast approaching.
Imagine the risks Santa would face if his inherent risk evaluations identified problems, but he took no action, especially when the risks involve critical products or services. The consequences could be devastating for the millions of children eagerly awaiting gifts.
To prevent such scenarios, Santa requires a thorough due diligence process to vet suppliers and service providers when high-risk issues arise. For example, if a new toy material supplier used unsafe paint or a sled repair service provided subpar wood, product quality and performance could suffer, ultimately harming Santa’s reputation and bottom line.
A well-designed due diligence process that identifies inherent risks early and triggers automated deep-dive assessments for high-risk areas, such as toy safety regulations, is essential for Santa’s workshop. It ensures not only safe and reliable operations but also effective management of third parties, whether they’re being naughty or nice.
Although based in the North Pole, Santa’s Workshop is a global operation that relies on products and services from third parties that span geographical borders, regulations, and time zones. Each region has its own data protection laws, labor standards, and customs requirements that Santa’s team must consider when evaluating new partners. Managing this complexity at an enterprise level is impossible with spreadsheets and disconnected tools.
Santa cannot afford to operate in silos; he needs foundational software that connects all his data sources and applies business rules to address the nuances of third parties under different regulations. Without a centralized view, he risks fines, delays, or worse, angry kids.
My Santa analogy may not fully unravel the mysteries of third-party risk management for my children, but it does make one thing clear: even in the most magical operations, strong governance, clear visibility, and the ability to scale are essential for successful third-party management.
TPRM programs with an enterprise-level footprint require an aligned team to thrive. Whether it’s elves, reindeer, cybersecurity experts, or compliance officers, teams operating from a centralized solution with unified processes perform more efficiently and effectively.
Achieving that level of alignment and visibility at scale requires a purpose-built solution, and that’s where Aravo comes in. Recognized as the category leader with the highest market potential in Chartis’ RiskTech Quadrant for TPRM solutions, Aravo’s Intelligence-First™ platform helps organizations understand which third parties are being naughty or nice. Its dynamic risk scoring engine supports multiple scorecards, automated processes that trigger tasks across teams, and business rules that guide workflows based on inputs from internal stakeholders, third parties, internal systems, and external data sources.
With over 10 million workflows initiated yearly across 50+ risk domains and spanning more than 40 languages, Aravo scales effortlessly, whether you’re managing TPRM for a Fortune 100 enterprise or overseeing Santa’s global North Pole headquarters.
Imagine what your TPRM program could achieve if every third party, like every elf in Santa’s workshop, were aligned, visible, and operating from a single source of truth.
Strong governance and clear visibility shouldn’t be seasonal. Explore Aravo’s Intelligence-First™ Platform or contact us to learn more.
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