What are the best ways to assess cybersecurity risk for supplier IT systems?

1 Identify your critical suppliers

The first step is to identify which suppliers are critical to your business, and what kind of IT systems or services they provide. Critical suppliers are those that have access to your sensitive data, support your core processes, or deliver essential functions. You should prioritize these suppliers for your risk assessment, and categorize them according to the level of impact they could have on your business if their IT systems were compromised.

2 Review their security policies and practices

The next step is to review the security policies and practices of your critical suppliers. You should ask them to provide evidence of their security standards, certifications, audits, or compliance reports. You should also inquire about their security awareness, training, and incident response plans. You should look for signs of good security hygiene, such as encryption, authentication, backup, patching, and monitoring. You should also check if they have any third-party or subcontractor relationships that could pose additional risks.

3 Conduct a vulnerability assessment

The third step is to conduct a vulnerability assessment of your critical suppliers' IT systems. A vulnerability assessment is a process of scanning, testing, and analyzing the IT systems for any weaknesses or flaws that could be exploited by hackers. You can use various tools and methods to perform a vulnerability assessment, such as penetration testing, web application scanning, network scanning, or code analysis. You should document the findings and recommendations of the vulnerability assessment, and share them with your suppliers.

4 Implement risk mitigation strategies

The fourth step is to implement risk mitigation strategies based on the results of the vulnerability assessment. Risk mitigation strategies are actions that you can take to reduce the likelihood or impact of a cyberattack on your supplier's IT systems, such as negotiating security clauses or service level agreements with your suppliers, implementing security controls or safeguards on your own IT systems, providing security guidance or assistance to your suppliers, monitoring or auditing your suppliers' IT systems regularly, and developing contingency or recovery plans in case of a cyberattack.

5 Communicate and collaborate with your suppliers

The fifth step is to communicate and collaborate with your suppliers throughout the risk assessment and mitigation process. Communication and collaboration are key to building trust and transparency with your suppliers, and ensuring that they are aware of your expectations and requirements. You should establish clear and frequent communication channels with your suppliers, and involve them in the risk assessment and mitigation activities. You should also provide feedback and recognition to your suppliers for their security efforts, and encourage them to share their best practices or challenges with you.

6 Update and review your risk assessment and mitigation plan

The sixth and final step is to update and review your risk assessment and mitigation plan periodically. Cybersecurity risk is not static, but dynamic and evolving. Therefore, you should monitor the changes and trends in the cyber threat landscape, and how they affect your suppliers' IT systems. You should also review the performance and effectiveness of your risk mitigation strategies, and make adjustments or improvements as needed. You should also update your risk assessment and mitigation plan whenever there are significant changes in your business or supplier relationships.