Emerging stronger:The rise of sustainable and resilient supply chainsGlobal third party risk management survey 2022 DOWNLOAD THE REPORT
Our latest research shows a greater level of awareness and focus on ESG in the extended enterprise, as organisations focus on more sustainable and resilient supply chains.
2022 key themesOrganisations need formal mechanisms to prioritise third-party ESG risks Business responsibility and social purpose is a key element of integrated business strategies, this is demonstrated by significant growth in the level of awareness and focus on ESG in the extended enterprise. However, many organisations don’t have the formal mechanisms to assess or prioritise ESG risks in their extended enterprise, and don’t trust internal/external data available to them.ESG awareness
Resilience is a key consideration in managing critical third parties Recent events, such as the global pandemic and Ukraine invasion, highlight the huge strategic impact of third-party failures and how quickly risk strikes. Organisations know they need to improve the resiliency of their supply chains and critical third parties. One way to enhance resilience is to reduce third-party concentration yet many organisations are choosing to work with a very small number of cloud service providers (CSPs) to gain more thorough oversight.An integrated approach third-party management unlocks efficienciesOrganisations have made incremental improvements to the way they manage third party relations, from an efficiency, cost effectiveness and decision-making perspective. Hindered by functional silos and decentralised systems, they aspire to develop a more holistic and integrated approach. Greater alignment between risk management and legal and contract management processes represents a critical milestone in the journey towards fully integrated third-party management.Increased demand for managed service solutions Managed services solutions are rapidly evolving to provide more comprehensive and tailored, end-to-end, insights-driven services. External assistance often contributes to the creation of successful target operating models and the effective running of day-to-day TPRM activities. However, organisations are often challenged with the need to balance cost management with the pace and agility required to respond to market disruptors.Pandemic driven transformation Post-pandemic trends show an increase in leadership focus and investment in third party risk management, driving transformational change. This is characterised by smarter third-party segmentation, increased focus on sell-side third parties and integrated technology solutions that improve efficiency and reduce cost. However, organisations face challenges from newer risk domains – including geopolitical and climate change – across multiple tiers of subcontractor relationships.The risk domains where organisations believe they are weakest include:Want to know more?Read our report to discover the other latest trends in third party risk management.DOWNLOAD REPORTGet in touchTo discuss the findings of our 2022 third party risk management survey and how they apply to your organisation, please get in touch with one of our specialists.Kristian Park is global leader for Extended Enterprise (EE) and a partner in Deloitte UK.Danny Griffiths is a Partner in our London based Extended Enterprise (EE) team.Sanjoy Sen is the head of research for third party risk management at Deloitte LLP.Find out how we help organisations with their approach to third party risk management.Previous third party risk management survey reportsThird party risk management survey – 2021 Gaining groundDeloitte’s sixth annual third party risk management (TPRM) survey showed that the pandemic led many organisations to make digital advancements in their approach to TPRM.Third party risk management survey – 2020 Be responsible and effectiveDeloitte’s fifth annual third party risk management (TPRM) survey showed that for the first time in five years, a desire to be a responsible business that effectively manages environmental and social issues throughout its supply chain is a key reason companies invest in TPRM.Third party risk management survey – 2019 All together nowDeloitte’s fourth annual third party risk management (TPRM) survey shows there is renewed focus on maturing TPRM practices within most organisations. This appears to be driven by a recognition of underinvestment in TPRM coupled with mistrust of the wider uncertain economic environment.Third party risk management survey – 2018 Focusing on the climb aheadDeloitte’s third annual third party risk management (TPRM) survey aims to capture improvements in maturity of TPRM frameworks with a specific focus on the business case and investments in TPRM.Third party risk management survey – 2017 Overcoming the threats and uncertaintyDeloitte’s second annual third party risk management (TPRM) survey covers a number of issues that span the management of the extended enterprise and related risks in a rapidly changing environment.Third party risk management survey – 2016 The threats are realThe survey results show that investment by organisations in third party risk management (TPRM) has increased year on year and that organisations are implementing or refining their TPRM processes and frameworks.