Today, businesses have adopted the interconnectedness of the world to source services and products in a more cost-effective manner. It is important to note that internet connectivity has made communications simper across large distances. Additionally, companies with services or production specializations have made an entry into the supply chain. It is hardly surprising that there has been a massive boom in third-party relationships.
These days, a majority of companies take the help of third parties irrespective of their geographical locations. However, only a handful appreciate the extent of their dependence on these third-parties.
Roles of third-parties
Many people may assume that these third-party relationships are usually prevalent in manufacturing operations in remote locations. However, for most businesses, 3rd-party relationships are more local and incredibly dynamic.
These third-party specialists may perform diverse crucial roles like the following:
· Payroll processors
· Food suppliers
· Facilities contractors
· Joint ventures, distributors, and partners in major global locations
· IT service providers
In several scenarios, 3rd-party relationships can be long term. These relationships are crucial to the success, growth, and operations of the concerned organization. However, if things are not proper, the breadth and depth of such associations may also suffer. While such relationships may have the result of several years of hard work, there can be a sudden shift in arrangements.
Findings of CRA research
CRA (CyberRisk Alliance) conducted research, which exhibits how complex operating a business is today. The research pointed out that a majority of respondents i.e. 76 percent had contracts with as many as 25 third-parties. These included:
· Brokers,
· Partners
· Distributors
· Contractors
· Resellers
· Business partners
The research also found that the biggest business hired the greatest number of third-party partners. IT reported that 56 percent of enterprise or large companies mentioned that thy have associations with over 50 partners.
These statistics showcase the extent of dependability businesses have on their business partners.
Why it can be tough to find out how dependable your third-party service providers are?
Do you value the impact of your third-party partners in your business growth? It is then crucial to find out how vulnerability could pop up and the manner in which they conduct themselves.
Typically, business leaders attempt to align goals that are in sync with their organizational operational and ethical standards while handling their vendors. However, is that adequate to make sure that there are no threats related to a particular business partner?
It may be also tough to find out how resilient and robust third-parties are to negative operating scenarios until such conditions occur.
The article has been published by the editorial board of the Fintek Diary. Happy Reading. For more information please visit www.fintekdiary.com
