What is a vendor risk assessment questionnaire?

The vendor risk assessment questionnaire — also known as a security questionnaire, third-party vendor assessment, or cloud security questionnaire – is a list of technical questions that reveal a company’s security and compliance processes and procedures. A vendor risk assessment questionnaire is often required by a company before they will sign a partnership or third-party vendor contract.

Why is the security questionnaire so important? It helps organizations identify their partners’, vendors’, and other third parties’ potential weaknesses that could result in a breach. Knowing where those gaps are allows them to prepare for — and hopefully avoid — worst case scenarios.

How it works

The risk assessment questionnaire is executed in two parts: the questionnaire and the assessment:

• The questionnaire is a series of questions asked of vendors or partners in order to help assess or evaluate overall risk. It informs risk assessments and is crucial to your due diligence and ongoing monitoring processes.
• The assessment takes information from the questionnaire, analyzes the third party’s responses, and calculates the overall risk they bring to your organization. 

Keep in mind that every procurement department will have its own set of security questions they'll want answered. This means that questionnaires can have anywhere from 20 to more than 100 questions, all depending on the product being purchased or service being delivered.

While some procurement departments use the security questionnaire simply as a checklist item, others look for specific criteria that need to be in place in order to move the contract forward. Still others have an IT compliance team perform a review of responses and ask probing follow-up questions about various answers. 

What role will it play in my business?

So, what does the risk assessment questionnaire mean for your business? This will depend on whether your business uses vendor services, supplies them, or is involved in both.

If you use vendor services

If your organization uses vendor services, it’s important to use the security questionnaire as the first step in the ongoing process of successfully managing vendor risk. While some risk may be minor enough not to warrant any action, significant risk may prevent a vendor partnership from moving forward.

If you supply vendor services

If your organization supplies vendor services, be prepared to answer basic IT security questions. If you handle private or confidential data, be prepared for even more questions, including those involving operational or information security governance.

While you’ll answer some yes-or-no and exists-or-doesn't exist questions, you’ll also need to show you have controls in process or partially in place in order to answer others.

As we explained in our recent Security Questionnaire 101 post, while an organization doesn't always have to answer everything in the security questionnaire perfectly to win the deal, a strong response helps! 

Which risk assessment questions are typically included in a vendor risk assessment?

As we mentioned before, security questionnaires can be exhaustive. Here is just a small sampling of some of the questions that may be asked:

• Who in your organization manages data security?
• How do you inventory authorized and unauthorized devices and software?
• Which data security certifications does your organization hold?
• What processes do you use to monitor the security of your wireless networks?
• Do you outsource network or security services?
• How do you manage remote access to your corporate network?
• How often are penetration tests performed?
• What is your process for data recovery?
• How do you report security incidents?
• Which regulations are you subject to and are you in compliance?
• How do you protect customer information?

The pros of using a vendor risk assessment questionnaire tool

Now that you know what a vendor risk assessment questionnaire is, how it works, what role it plays in your organization, and have seen a few sample questions, you may be wondering how you can get started either creating or responding to one.

Creating these types of questionnaires manually is incredibly time consuming, and — for those responding to them — they require a lot of effort to complete, and are almost always the responsibility of the CIO/CISO (or other IT lead), who has much more important things to do.

Thankfully, machine learning (ML) solutions can use existing control sets to respond to security questionnaires efficiently and accurately. Such AI tools can streamline the process by leveraging the active internal control program to respond consistently to each questionnaire. 

Additionally, using an AI tool can help your organization:

• Speed up deal closure: Delays caused by the security questionnaire process can jeopardize deals, thereby slowing revenue generation. An AI-powered tool completes questionnaires automatically in 48 hours or less with zero additional input needed from your team.
• Keep the focus on your business: Responding to security questionnaires can pull tech team members away from other essential tasks. AI tools allow anyone at your company to upload and complete a security questionnaire.
• Scale sales operations and revenue: Instead of copying and pasting from old spreadsheets and documents, an AI tool does all the work for you, helping you get back to more important, revenue-generating tasks.

How Strike Graph can help

Unrecognized or unmitigated vendor risk can lead to service disruption, data breaches, regulatory fines, lost revenue, lawsuits, and reputational damage. Using vendor risk assessment questionnaires as the first part of your organization's risk management process can help your business minimize, neutralize, or completely avoid the consequences if and when a risk materializes.

Strike Graph’s AI-powered tool can help your business accelerate the security questionnaire process and enable the head of engineering to delegate the completion of questionnaires to operations. Based on machine learning processing technology, our solution utilizes your existing security controls and associates these with each vendor assessment question to provide an accurate answer.

How does it work? Two business days after you send us the questions you need to answer, we send you a security report that shows which controls satisfy each question. This saves time, improves accuracy, and instills confidence about the answers provided. By leveraging existing internal controls to respond to security questionnaires, organizations gain the advantage of faster response times. This not only means you’ll be unburdened by cumbersome, time-consuming response measures, but you’ll also close more deals, quicker.

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