Third party ecosystem: Why rethink third party risk?

As third party ecosystems continue to expand exponentially, important questions are being asked by boards of directors and other stakeholders regarding the risk to the extended enterprise.

Organisations have long relied on third parties for specialty services, competitive advantage, operational efficiency, and cost savings. But as organisations expand third-party ecosystems to execute core activities that are critical to operations, business models, and value propositions, they’re also creating risks for the extended enterprise.

As one example, the sheer number of relationships can often explode as organisations rapidly adopt new operating models and outsource more core and noncore functions to third parties—cloud service providers are one prominent example.

And, organisations are rethinking the nature of work, workforces, and workplaces as talent gaps appear and automation, analytics, and artificial intelligence (AI) increasingly enhance traditionally human-performed jobs. Third parties can play a part in many of those changes.