TPRM Challenges and How to Overcome Them

With 15% of breaches linked to third-party suppliers, effective Third-Party Risk Management (TPRM) is critical to reducing exposure to cyber threats and compliance violations. TPRM helps identify, assess, and mitigate risks from vendors, partners, and service providers to ensure security and alignment with regulations like GDPR, NIST CSF, and ISO 27001. 

In this article, we’ll break down the biggest challenges in TPRM and share ways to better strengthen your third-party risk posture.

Common TPRM Challenges

While Third-Party Risk Management is essential to maintaining strong security and regulatory compliance, many organizations struggle to implement it effectively. From limited visibility into vendor risks to resource constraints and evolving compliance demands, these challenges can leave critical gaps in your risk posture. 

Below, we break down the most common obstacles organizations face with TPRM and why addressing them is key to strengthening organizational security and ensuring compliance.

1. Lack of Centralized Visibility into Third-Party Access

As organizations grow, so does the number of vendors, suppliers, and partners—with many having access to sensitive systems and data. Without a centralized system to manage and assess vendor access, it's difficult to know who has access to what, what data is being shared, and whether that access is secure. This lack of visibility leads to blind spots that increase overall risk exposure.

2. Shadow IT Creates Hidden Security Gaps

Shadow IT—unsanctioned tools or apps used by employees—often lacks proper security oversight. These tools can introduce vulnerabilities outside of your formal risk assessment processes, making it easier for cybercriminals to exploit them. Without full visibility, IT and security teams remain unaware of hidden risks within the organization’s digital ecosystem.

3. Fourth-Party Dependencies Add Complexity

Many organizations focus only on direct third-party risks, ignoring the fourth-party vendors their partners rely on. These hidden dependencies can carry significant risks—especially in complex supply chains—and without visibility into them, organizations can unknowingly inherit vulnerabilities that affect their security, compliance, or operations.

4. Inefficient and Manual Risk Assessment Processes

Organizations still relying on spreadsheets or email-based workflows for risk assessments face major limitations. Manual processes are time-consuming, prone to errors, and cannot scale with business growth or increased vendor counts. These inefficiencies lead to delays, missed red flags, and inconsistent evaluations.

5. One-Size-Fits-All Risk Assessment Models

Applying the same risk criteria to all vendors—regardless of their criticality, data access, or service type—leads to inaccurate risk ratings. Not all vendors present the same level of risk. A dynamic, tiered approach that adapts assessments based on each vendor's specific profile ensures more accurate and actionable insights.

6. Keeping Up with Regulatory Requirements

Regulatory frameworks like GDPR, NIST CSF, ISO 27001, and SOC 2 increasingly emphasize third-party risk management. Compliance now requires continuous monitoring and documentation to meet audit expectations. This becomes even more challenging for organizations operating across multiple regions and industries, each with its own evolving regulatory landscape.

7. Third-Party Data Security Concerns

Vendors frequently process or store sensitive information. A weak cybersecurity posture on their end can expose your organization to data breaches, ransomware attacks, and compliance violations. With 98% of companies reporting at least one vendor-related data breach in the past two years (Global Cybersecurity Outlook 2024), third-party data security is a must.

8. Limited Resources for Ongoing Monitoring

Initial due diligence is no longer sufficient. Third-party risks are dynamic, and without ongoing monitoring, organizations can miss changes in vendor security practices, financial health, or regulatory standing. However, many companies lack the tools, staff, or budget to monitor all vendors in real time. This creates a reactive risk posture that leaves the business exposed.

How to Overcome These TPRM Challenges

Overcoming Third-Party Risk Management challenges requires more than awareness. It calls for a strategic, flexible, and technology-driven approach. As vendor ecosystems expand and regulatory pressures mount, organizations must find practical ways to increase visibility, reduce manual workload, and proactively manage vendor risk. 

The good news is that there’s no one-size-fits-all path. Organizations can improve their TPRM programs using a variety of tools and strategies, depending on their size, maturity, and existing tech stack. Whether you start with a structured project management tool, adopt a dedicated TPRM solution, or integrate with an existing GRC platform, the key is to choose an approach that supports visibility, scalability, and continuous improvement.

Option 1: Use a Structured Project Management Tool

For organizations just beginning to formalize their TPRM, the use of structured project management tools like Asana, Trello, or Smartsheet can help organize assessment workflows, track documentation, and assign responsibilities. While not purpose-built for TPRM, they offer more structure and collaboration than manual spreadsheets and email chains. 

However, these tools often lack features like automated risk scoring, regulatory tracking, or integration with threat intelligence. This limits their effectiveness as your program matures and begins to scale.

Option 2: Adopt a Dedicated TPRM Solution

A standalone third-party risk management solution offers deeper functionality tailored to managing vendors. These platforms typically include risk tiering, standardized assessments, document management, and ongoing monitoring tools. They’re a great step forward for organizations looking to move beyond manual processes and spreadsheets. 

But dedicated TPRM tools often operate in silos, disconnected from broader compliance, audit, and enterprise risk processes. This makes it harder to align third-party risk with overall governance efforts.

Option 3: Centralize TPRM Within a GRC Platform

For organizations seeking a scalable, future-ready solution, centralizing TPRM within an integrated GRC platform, such as StandardFusion, is the most effective option. A unified GRC solution enables complete visibility across third-party, operational, and regulatory risk, allowing you to manage vendor relationships as part of your broader enterprise risk strategy.

Key Benefits: 

• Eliminate Redundancies: Consolidate vendor risk data, compliance evidence, and audit trails into one system. 

• Enable Real-Time Monitoring: Automatically track vendor risk changes and receive alerts on emerging threats. 

• Ensure Consistency: Use customizable templates and workflows to assess vendors based on size, service type, and criticality. 

• Maintain Audit Readiness: Align with multiple regulatory frameworks (e.g., GDPR, ISO 27001, SOC 2) and generate reports on demand. 

• Build a Foundation for Enterprise Risk: TPRM becomes the starting point for a scalable GRC program that supports broader risk, audit, and compliance goals. 

If your organization doesn’t yet have a GRC platform in place, starting with TPRM is a smart entry point as it provides immediate value while laying the groundwork for comprehensive risk governance.

Conclusion

Third-party risk management presents a growing set of challenges, from limited visibility and manual assessments to evolving regulatory expectations and resource constraints. But these challenges are not insurmountable. With the right tools and approach, they become opportunities to strengthen your organization's overall risk posture.

By moving away from fragmented tools and ad hoc processes, organizations can implement a more strategic, scalable TPRM program. Whether you start with structured assessments, a dedicated TPRM tool, or take the step toward integrating with a broader GRC platform, the goal remains the same: improve consistency, reduce risk, and stay ahead of compliance demands.