Vendor Risk Management Definition and its need?

What is Vendor Risk Management?

The best way to explain vendor risk management is that describes it as a process that ensures that availing the services of external vendors does not impact the business performance of the company. Vendor risk management has become extremely important in the light of recent events like the pandemic that has disrupted the global supply chains. 

Companies are now using vendor risk management software to monitor, assess, and manage the risks posed by vendors, suppliers, and contractors. The risk factor increases considerably in the case of IT products and services when the vendors have access to confidential data. It is, therefore, extremely important that companies undertake extensive research to find out important details related to the vendor. This will help mitigate any chances of unwanted outcomes while interacting with the vendor regularly.