What Is Third Party Risk Management?

Like most companies, your business probably relies on a few key suppliers. Some provide essential software. others handle payroll, marketing, customer data, or even your entire IT operations. All of them, in some way, are plugged into the core of what makes your business run.

Now imagine one of those suppliers gets breached, misses a critical update, or goes under overnight. Their problem just became your problem.

That’s the reality of the modern business world. We’re more connected than ever - and more exposed than we realise.

What Exactly Is Third Party Risk Management?

Third Party Risk Management, or TPRM, is the process of managing and mitigating the risk inherent in doing business with your suppliers and their supply chain. It’s way more than asking new suppliers to complete a questionnaire; it’s a way to understand how your extended ecosystem could impact your security, compliance, operations, and your reputation.

And we’re not just talking about your IT provider or cybersecurity tools. Think about:

Your cloud hosting platform
Your logistics and distribution network
Your outsourced HR partner
Your digital agency with access to your CMS
That freelancer with login credentials to your production environment

If they get hit, or mess up, you’re still the one who must explain it to your Board, your customers, or your regulator.

Why It’s Not Just a Big Business Problem Anymore

Until recently, TPRM was the kind of thing you'd expect to hear about in enterprise risk management teams. But things have changed.

All businesses are now under pressure to show they’re secure, compliant, and resilient - not just internally, but across their supply chain. And with regulators tightening up and cyber attackers getting smarter, you’re expected to take this seriously.

The problem is that most growing companies operate in as lean a way as possible. They often lack the people, platform, and processes needed to assess third-party risk properly - no dedicated risk team, no tooling to automate assessments, and no clear way of escalating issues when they arise.

So, what happens?

New suppliers are brought on quickly, with minimal due diligence
Risk assessments are done once - if at all - and then forgotten
There’s no clear process for reviewing, escalating, or offboarding vendors (and the access they have to your resources)
Nobody really owns the problem

And that is precisely how things fall through the cracks.

The Hidden Struggles for Startups and Scaleups

You’re moving fast. You’re outsourcing a lot. Your business users are probably picking tools based on what integrates quickly or comes with a startup discount. That’s fine - you need to be agile.

But that agility comes at a cost.

Most young companies don’t have formal procurement. Security is still maturing, and there is a pressing need to address security, risk and compliance needs without inhibiting growth.

Without the right process in place - or a platform to manage risk centrally - it’s easy for teams to introduce new vendors without fully understanding what they’re connecting to or who’s responsible for managing that relationship. Then suddenly you’ve got multiple unvetted third parties with access to data, systems, and customers - and no clear sense of who’s responsible for what.

You’re not alone. And you’re not doing anything wrong. But as you grow, these gaps grow with you - until one day a client, auditor, or investor starts asking hard questions, particularly as scaleups progress through the various funding rounds.

That’s why it helps to put some structure around it early — defining who’s responsible (people), how things should be reviewed (process), and where it all lives (platform). It doesn’t need to be perfect - just consistent and visible.

That’s why it’s worth getting ahead of this now, before it turns into a fire drill.

Whose Job Is This, Anyway?

The awkward truth is that third party risk often either ends up on the IT desk, or falls into a no-man’s land:

A business user might select the tool and negotiate the contract
Legal might want to check the terms
IT might be asked to provision the tool, at which point the security team raise any red flags - but the ship has sailed because the business owner just wants it working by Friday

Since IT raised the red flags, there is a tendency to give them the problem of resolving (and even possibly owning the risks). Here’s the reality: the person who owns the supplier relationship also owns the risk.

If your Marketing Director selects and manages the CRM provider, then they’re responsible for understanding and managing the risks that come with it - not just the benefits. The same goes for HR platforms, outsourced IT providers, and any other third-party service. That might sound daunting, but it doesn’t have to be. Services like Talanos's Managed Third Party Risk make this model not only possible, but practical - giving each stakeholder the insight, support, and structure they need to manage supplier risk without becoming risk experts themselves.

What Does “Good” Look Like?

You don’t need a gold-plated risk framework to manage third-party risk effectively. But you do need something better than a spreadsheet.

Spreadsheets have their place - just not as the backbone of your risk programme. They’re fine when you have five suppliers. But as soon as you scale beyond that, things start to unravel. Your suppliers hate them too, as they’re forced to respond to every new client spreadsheet request from scratch.

Rows get missed. Risk scores go stale. Owners aren’t clear. And nobody’s quite sure which version is the latest.

That’s why a good TPRM process isn’t just structured and repeatable - it’s built for change. Because suppliers change. Risks change. Your business changes. And you need a system that keeps up.

A strong approach means:

Knowing who your suppliers are, what they can access, and how critical they are to your business
Applying the right level of scrutiny, not throwing the same generic questionnaire at every vendor
Moving beyond one-off reviews to create an ongoing, living view of supplier risk – especially as emerging threats create the potential for disruption
Assigning real ownership, so that the person who owns the supplier relationship also owns the risk
Turning assessments into actions and insight, not just paperwork

At Talanos, we think of effective TPRM as a balance of people, platform, and process:

People: Our assessors help translate technical issues into business risks, so teams can focus on remediation instead of paperwork. We handle volume at scale, so your team doesn’t have to.
Platform: Our solution integrates with platforms like Risk Ledger to centralise supplier assessments, correspondence, and compliance workflows - all aligned to your risk appetite.
Process: We use multiple threat intelligence feeds to continuously monitor supplier controls and risk. For our MDR clients, any supplier-related breaches are assessed immediately to reduce downstream impact.

Crucially, good TPRM helps you move away from scattered spreadsheets and SharePoint chaos - towards a centralised, auditable process that gives your team clarity, your board confidence, and your suppliers a better experience.

It’s not a case of introducing bureaucracy for the sake of it. Rather the goal is to protect your growth with guardrails that scale. For more guidance on how small and midsize companies can scale cybersecurity without slowing growth, check out our Cybersecurity for Startups and Scaleups blog.

But What About Compliance?

Ah yes - the paperwork.

If you’re aiming for Cyber Essentials, ISO 27001, or aligning to frameworks like NIST, CAF or DORA, you’ll need to show that you’re not just managing risk internally - but also across your third parties.

Auditors are now asking questions like:

Do you classify your suppliers by criticality?
How often do you reassess them?
What do you do if something changes?
And most importantly: can you prove how you’re managing supplier risk?

The good news? If you’ve built a TPRM process that works for your business, the audit-ready pieces tend to fall into place naturally.

Getting Started (Without Making It a Monster Project)

If this all sounds a bit overwhelming, don’t worry. You don’t need to fix everything overnight.

Start by answering three simple questions:

Who are our third-party suppliers?
Which ones have access to sensitive data or provide operationally critical systems?
What checks are we doing - and how often?

If those answers aren’t clear, that’s your starting point.

From there, you can start to layer in structure - whether that’s a tool, a lightweight framework, or outsourcing to a managed service.

Making TPRM Work for Your Business

Third Party Risk Management isn’t just a security exercise or compliance tick-box - it’s part of how modern organisations build trust and stay resilient.

As your business grows, so does your supplier footprint - and with it, your exposure. Having a clear, workable approach to managing that risk puts you in a stronger position to respond, adapt, and scale with confidence.

You don’t need to over-engineer it. You just need to start. And then keep refining as you go.