How Poor Due Diligence Undermines Vendor Risk Management

Due Diligence Mistakes That Undermine Vendor Risk Management

Vendor risk management is a critical aspect of enterprise security, but not enough organizations are approaching due diligence in TPRM as anything more than just another item on a checklist.

They assume that they can get by with one standard form assessment that goes out to all of their vendors, and then their job is done. But every vendor relationship is different. Their risk profiles are different. Their security postures are different.

As a result, treating due diligence as a quick, routine chore is fundamentally insufficient. This checkbox approach to compliance is exactly what leads to data breaches, regulatory penalties, and reputational damage.

Common Failures in Vendor Due Diligence

There are many ways that companies can fail to perform proper due diligence, but three specific failures persist consistently across industries and organizations of all sizes.

Failure to Segment Vendors by Criticality

You can’t treat every vendor relationship the same. Different vendors require access to different kinds and tiers of data, and if you manage risk for each vendor in the same way, you’ll spend an inordinate amount of time on vendors that don’t pose much of a risk – leaving not enough resources to adequately manage a vendor that has access to mission-critical information.

The most effective vendor risk management programs segment their vendors into distinct tiers of criticality. Each tier is treated differently, with high-risk vendors undergoing comprehensive multi-source evaluations while lower-risk relationships receive streamlined but appropriate oversight.

Relying Solely on One Cookie-Cutter Assessment

Many organizations fall into the trap of using the same standardized assessment for every vendor relationship – regardless of the vendor’s criticality or risk profile. Even high-quality assessment frameworks like SIG or NIST can become problematic when they’re implemented as static, one-size-fits-all solutions.

This inevitably results in organizations over-assessing low-risk vendors and under-assessing critical ones, wasting time on irrelevant questionnaires for minimal-risk relationships while potentially missing critical security gaps in high-risk environments.

Blindly Trusting Vendors

It’s disturbingly common for organizations to trust large, established vendors to have a strong security posture just because they’ve been around for a long time. This line of thinking directly led to the breaches at Change Healthcare and Colonial Pipeline – even industry leaders can harbor critical vulnerabilities.

Vendor size must never be a substitute for scrutiny. Trust must be earned, verified, and maintained through structured oversight – not assumed based on reputation.

Perimeter: A Thorough Approach to Vendor Due Diligence

At Perimeter, we believe due diligence should be more than a formality. It should be a proactive, strategic checkpoint in your security lifecycle.

Perimeter enables a Zero Trust approach to vendor risk management by delivering an end-to-end VRM lifecycle that is painless, intelligent, and fully integrated. We bring together intelligence from multiple sources to create tiered, actionable vendor risk profiles.

Our platform replaces checkbox compliance with contextual clarity. Through customized assessments, real-time monitoring, and AI-powered policy analysis, we provide the visibility and confidence you need to manage vendor risk effectively.

Our Three Pillars of Modern Due Diligence

Customized Assessment Data

Perimeter tailors each vendor assessment based on the specific risks of the relationship. High-criticality vendors receive deep-dive assessments that explore technical controls, incident response processes, and governance structures, while lower-risk vendors are assessed with appropriate agility.

Continuous Monitoring

Perimeter’s Verify engine delivers continuous visibility into a vendor’s external attack surface. This includes alerts for expired certificates, exposed services, and unpatched vulnerabilities – even if a vendor’s assessment claims robust controls.

Extract, Perimeter’s proprietary AI engine, reviews and extracts claims from vendor policies and compares them to assessment responses and monitoring data. Any mismatch or contradiction is flagged for investigation, so nothing slips through the cracks.

From Checkbox to Security Checkpoint

Organizations must reimagine vendor onboarding and assessment as a security checkpoint – not a compliance hurdle.

Perimeter equips regulated industries like healthcare, finance, and legal with painless VRM that adapts to the complexity of their environments and delivers real-time risk insights. With Perimeter, your team can stop chasing forms and start managing real risk.

???? Ready to elevate your due diligence? Schedule a demo today and see how Perimeter can transform your vendor risk management.