Third-party risk management global survey 2020
Extended enterprise risk management (EERM)
Be responsible and effective: strike a balance
A desire to be a responsible business that effectively manages social and environmental issues and responsibilities throughout its supply chain, is – for the first time in five years – one of the key reasons companies invest in third-party risk management (TPRM). Deloitte’s fifth annual extended enterprise risk management (EERM) global survey report highlights six key themes, alongside the impact of COVID-19 on managing third-party risk and our predictions for 2020-21.
Deloitte’s fifth annual global survey on Extended Enterprise Risk Management (EERM), also known as Third Party Risk Management (TPRM) in many organizations, shows six key findings:
- Cost of failure: Organizations are increasingly concerned about the rising cost of getting third-party risk management wrong
- Balancing responsibility and cost: Organizations are more aware of the need to be a responsible business, but budgets are not allocated to embed such initiatives in many organizations
- Increasing regulatory activity: A rise in activity related to EERM has put pressure on organizations across all industries and countries
- Vision for transformation: Organizations are developing a vision to transform EERM over the next two to three years
- Leveraging external assistance: More organizations are exploring and engaging external support for their EERM programs to achieve their developing vision
- Wider focus: Senior executives are extending their focus beyond risk to encompass a broader view of third-party management
We had a record high of 1,145 responses from 20 countries globally. Since our survey closed, the risk landscape changed significantly because of the COVID-19 pandemic. Our report also captures the impact of COVID-19 on managing third-party relationships and predicts the changes ahead based on client conversations.
How we help clients
For many organisations, their third-party ecosystem, or ‘extended enterprise’, is an important source of business value and strategic advantage. However, as the reliance on third parties continues to grow, so do the associated risks, bringing potential reputational damage and regulatory action.
Our experienced teams work with clients to develop governance frameworks which effectively identify and manage all forms of third-party risks, looking at both process and technology solutions to deliver value and meet contractual obligations.
If you would like to discuss the findings of our third-party risk management survey and how they apply to your organisation, please get in touch with one of our specialists.