Fundamentals · TPRM

What is Third Party Risk Management?

Third Party Risk Management (TPRM) is the systematic process of identifying, assessing and continuously managing risks arising from external partners, suppliers and service providers.

Third Party Risk Management (TPRM) refers to the structured identification, assessment and continuous monitoring of all risks arising from business relationships with external third parties — from IT service providers and software vendors to critical infrastructure suppliers.

Why is TPRM indispensable today?

Modern organisations outsource up to 70% of their IT services to external providers. Each of these providers is a potential entry point for cyberattacks — traditional security measures only protect your own infrastructure, not your suppliers'. The SolarWinds attack in 2020 and the Kaseya attack in 2021 showed how a single compromised supplier can simultaneously affect thousands of organisations.

62% of all data breaches

originate from the supply chain according to IBM's Cost of Data Breach Report. TPRM is no longer optional — it is a regulatory and business necessity.

The 6 phases of the TPRM lifecycle

A complete TPRM programme covers six phases: (1) supplier inventory — comprehensive registration of all third parties, (2) risk classification — categorisation by criticality and risk profile, (3) due diligence — thorough review before contract, (4) contract design — anchoring security requirements in SLAs, (5) continuous monitoring — ongoing cyber intelligence surveillance, (6) exit management — orderly termination of supplier relationships.

From reactive to proactive

360TPRM automates all six phases — from supplier registration to continuous monitoring — replacing manual questionnaires with real-time intelligence.

TPRM and regulatory requirements

NIS2 Art. 21 requires organisations in critical sectors to systematically secure their supply chains. DORA Art. 28-44 requires financial entities to implement full ICT third-party risk management including an information register and continuous monitoring. ISO 27001:2022 has significantly tightened requirements for supplier relationships with Annex A.5.19-23. TPRM is therefore not just best practice but a legal obligation.

NIS2 + DORA + ISO 27001

360TPRM is natively aligned to NIS2, DORA and ISO 27001 — with integrated compliance dashboards and automated evidence.

FAQ

What is the difference between TPRM and VRM?+

Vendor Risk Management (VRM) is a subset of TPRM focusing on direct suppliers. TPRM is broader and includes all third parties — partners, subcontractors, cloud providers and fourth parties.

Which organisations need TPRM?+

Any organisation that uses external service providers or suppliers should practise TPRM. It is mandatory for NIS2-obligated organisations in critical sectors and for financial entities under DORA.

What is a TPRM framework?+

A TPRM framework is a structured ruleset for managing third-party risks — e.g. based on ISO 27001, NIST CSF or BSI IT-Grundschutz. It defines processes, responsibilities and controls.

How does TPRM differ from classic supplier management?+

Classic supplier management focuses on performance and cost. TPRM adds the cybersecurity and compliance dimension — with continuous monitoring instead of periodic audits.

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