Measuring Third-Party Risk Management Return on Investment

Organizations are increasing their usage of third parties to cut costs and focus on core operations to improve margins and increase their competitive advantage in the market. However, working with third parties can introduce risks that lead to breaches or compliance violations. That’s why it’s essential to have a mature and agile third-party risk management program in place to govern those relationships.

However, most companies are stuck with manual, inefficient programs that don’t enable them to even assess all their vendors much less properly score and remediate the risks they find. This blog utilizes results from research studies conducted with TechValidate to review why current TPRM practices are so inefficient and identify best-practice return on investment (ROI) metrics delivered in the Prevalent solution.

Why Third-Party Risk is So Complicated and Inefficient

The 2024 Third-Party Risk Management Study showed that despite third-party risk management being a top priority in organizations, 50% of companies still use spreadsheets to assess their vendors and suppliers.

Further, only 51% of companies reported that there is some TPRM coordination across the organization.

Because of how manual and disorganized TPRM is for these organizations, companies report being understaffed by a factor of 2, only assessing a third of their vendors and as few as 29% remediate the risks they find.

The bottom line is that teams are struggling with reactive, manual, disconnected, resource-intensive approaches. That is why they turn to Prevalent – for the proactive, process-driven model we deliver.

Best-in-Class Third-Party Risk ROI Metrics

In our TechValidate customer study, we asked customers to quantify the benefits their companies are realizing by using Prevalent to automate their TPRM programs. We believe these are best-in-class metrics. How do they stack up?

Half the hours required to manage vendors

When asked how much time they spend managing vendor assessments now versus before they began using Prevalent, customers report a 50% time savings. Because Prevalent automates the collection and analysis of vendor assessments, teams can spend less time on rote activities such as collecting data and more time on true business value-added activities such as remediating risks.

44% decrease in days required to achieve a complete assessment

When we asked how much turnaround time for completed vendor assessments has decreased since they began using Prevalent for their vendor risk assessment services, customers reported a 44% drop in the number of days. That equated to a savings of 8.3 days per vendor. Imagine what your team can accomplish with more than 8 additional days available in the third-party risk management lifecycle!

3-4x more productive

We asked customers to report on how many vendors they are now able to manage with Prevalent. Customers have improved their team productivity by a factor of between 3 and 4 as a result of the automation, workflow, and reporting available in the Prevalent solution.

The Results are Clear

If your team is struggling to keep up with manual assessment practices or has too few resources to be effective, Prevalent can help. But don’t take our word for it – read what this customer had to say:

Get Started on Your Path to a More Mature and Efficient TPRM Program

Benchmark your own third-party risk management practices against your peers by registering for your own full, free maturity assessment. We even have a 10-question online version that will provide you with a quick score to provide some direction.