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Third Party Vendor Risk

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Third Party Vendor Risk

I am following Jason Dion’s Security+ course on Udemy to prepare for the CompTIA Security+ certification.

Third Party Vendor Risk

Potential security risks and challenges introduced by external entities, e.g., vendors, suppliers, and service providers.

Supply Chain Risk

Key Points:

  1. Hardware Manufacturers: Conduct rigorous supply chain assessments.

  2. Software Developers: Ensure software is properly licensed, authentic, and free of known vulnerabilities or bugs.

  3. Managed Service Providers (MSP): Organizations that provide a range of technology services and support to businesses and clients.

Questions to Ask?

  • Evaluate data security measures when entrusting service providers with access to your data.

  • How can we ensure the information they handle maintains confidentiality and integrity?

  • Are MSPs following cybersecurity protocols robust enough to protect your data?

  • In the event of a security breach, will MSPs provide necessary support for incident response or forensic investigations?

Supply Chain Attacks

Attacks targeting weaker links in the supply chain to gain access to the primary target.

How to Avoid These Attacks?

  1. Vendor Due Diligence: Understand their cybersecurity posture, supply chain management, and security practices (Supply Chain Analysis).

  2. Regular Monitoring & Auditing

  3. Education & Collaboration: Engage the broader ecosystem.

  4. Incorporating Contractual Safeguards

Vendor Assessments

A process organizations use to evaluate the security, reliability, and performance of external entities.

  • Vendors: Provide goods to an organization.

  • Suppliers: Handle production or delivery of products/parts.

  • MSPs: Provide services (e.g., IT). Contracts should include a right-to-audit clause.

Vendor Selection & Monitoring

  • Vendor Assessment
  • Contract Review
  • Penetration Testing
  • Internal & External Audits

Basic Concepts of Vendor Selection

  1. Due Diligence:

    • Financial Stability
    • Operational History
    • Client Testimonies
    • On-The-Ground Practices
    • Conflict of Interest

  2. Vendor Questionnaires:
    Comprehensive documents filled by potential vendors to provide insights into operations, capabilities, and compliance:

    • Data Redundancy Measures
    • Security Protocols
    • Uptime Guarantees
    • Disaster Recovery Plans

Rules of Engagement: Guidelines dictating interactions between an organization and potential vendors:

  • Communication Protocols
  • Data Sharing Policies
  • Negotiation Boundaries

Monitoring

Mechanisms to ensure vendors align with organizational needs and standards:

  • Performance Reviews
  • Feedback Loops

Contracts & Agreements

Types

  1. Basic Contract
    Explanation: A straightforward agreement outlining terms (e.g., payment, deliverables, timelines). Legally binding but less detailed.
    Case Study: A freelance designer signs a contract with a client to create a logo for $1,000, with deadlines and ownership rights.

  2. Service Level Agreement (SLA)
    Explanation: Defines service quality metrics (e.g., uptime, response time).
    Case Study: A cloud provider guarantees 99.9% uptime in an SLA with penalties for downtime exceeding 0.1%.

  3. Memorandum of Agreement (MOA)
    Explanation: Formalizes collaboration between organizations, detailing roles/responsibilities.
    Case Study: A city government and nonprofit sign an MOA to fund a park renovation.

  4. Memorandum of Understanding (MOU)
    Explanation: Non-binding agreement expressing intent to collaborate.
    Case Study: Two startups sign an MOU to explore software integration.

  5. Master Service Agreement (MSA)
    Explanation: Governs long-term relationships for future projects.
    Case Study: A marketing agency signs an MSA for recurring campaigns over three years.

  6. Statement of Work (SOW)
    Explanation: Specifies project scope, tasks, and deliverables (often under an MSA).
    Case Study: A construction firm drafts an SOW to build a warehouse with a 12-month timeline.

  7. Non-Disclosure Agreement (NDA)
    Explanation: Legally binds parties to confidentiality.
    Case Study: A biotech startup requires NDAs for investors reviewing a patented drug formula.

  8. Business Partnership Agreement (BPA)
    Explanation: Outlines profit-sharing, roles, and dispute resolution.
    Case Study: Two entrepreneurs launch a café with a BPA allocating 60/40 profits and managerial duties.

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