Third-party risk management (TPRM) professionals are faced with a market that’s defined by rapid changes in expectations. New and emerging regulations affect how businesses manage their supply chains, information security, environmental and social governance, and deliver transparency and reporting. There are market forces and activists demanding more efficient, effective, and socially conscious supply chains. Also, there are technology changes that offer promise but may be advancing so quickly that they leave practitioners behind.
Despite these pressures, TPRM teams still have a job to do, and many are building program fundamentals, moving up maturity scales, and aligning their businesses to good third-party risk management practices. These practitioners typically seek a handful of core capabilities in a software solution designed to facilitate a good TPRM program.
There are essential needs for efficient and effective third-party onboarding processes, risk assessments, evaluations, monitoring, issue identification, and corrective actions. Best practices advise businesses to take a risk-based approach to assessing, scoring, evaluating, and determining whether and how to do (or not to do) business with a third party based on the relative risk it represents to the business.
Each TPRM program is distinct to its own organization and critical to its effectiveness. Variances can include:
While technology is essential to making each of these building blocks successful, human intelligence is a necessary part of a well-designed, well-run, and high-performing TPRM program. This is especially important as relevant risks, evaluation criteria, and business strategies constantly change. It truly takes a combination of people, processes, and technologies for businesses to effectively protect themselves from third-party risks. It requires personal expertise, skills, experience, and discipline.
How businesses design their TPRM programs and the technologies they select have a lot to do with where they are today and how they expect their programs to evolve. It’s also true that TPRM software vendors and market analysts push the edges of innovation in this market.
But, for most users, an effective TPRM software solution must enable them to first accomplish the basic-to-intermediate requirements of their programs correctly, before worrying about flashy new technologies. After all, for many businesses, TPRM is still an evolving discipline. Few organizations are positioned at the very highest end of the program or technology maturity scale.
Because each organization has its own TPRM maturity level and needs, Aravo designed its solutions to meet customers where they are anywhere along their TPRM program maturity positioning, without driving rapid maturity where they’re not ready for it. The capabilities help customers design and deploy programs that fit their current needs and evolve with them as their programs scale, diversify, and evolve. It is an engine for program maturity and optimized outcomes customized to each organizations’ needs.
Third-party engagements deliver cost, production, market accessibility, and strategic advantage for the business. Because of this, capturing all this important third-party data in a centralized, visible platform is an important first step, especially for those looking to improve their TPRM maturity.
Throughout a third-party relationship lifecycle, communications, performance evaluations, and monitoring allow businesses to continuously improve their understanding of a third-party relationship and make better decisions for both sides of the engagement.
At its core, Aravo delivers centralized management of elementary to complex third-party environments. It delivers visibility into risks and enables risk-based programs by enabling customers to accurately assess, score, and evaluate multiple categories of third-party risks related to their businesses. And it delivers the technologies, intelligence, and insights people need to protect their businesses from third-party risks. By maintaining a focus on why customers invest in the Aravo solution and what they are really trying to accomplish, we are able to consistently deliver the market’s leading solution.
As this market continues to evolve, there will be new innovations that help TPRM professionals and others that won’t. By keeping an eye on what customers are really trying to accomplish in their programs, and how they see their needs evolving, Aravo stays close to what truly matters to them.
Technology innovations like artificial intelligence (AI) hold promise for streamlining and accelerating some processes and decision-making within a TPRM program. But it is important to know that experience, expertise, and human intelligence are as critical to a good risk management program as advanced technologies that may create their own risks. While Aravo has and continues to add value with AI technologies in our solution, our AI is designed to augment and complement existing workflows and accelerate decisions, not to replace human intelligence where risk-based decisions may create opportunities.
While many businesses are investing in their core TPRM disciplines, it is important to position technologies where they can best deliver the greatest benefit to a customer at any maturity stage. Innovation that matters delivers tactical and long-term strategic value to the customer. Aravo continues to push the innovation frontier, with a focus on enabling customers to more quickly, accurately, and efficiently protect their businesses from third-party risks.
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