As your business grows and you onboard new vendors, you’re also opening the door to new challenges and risks. A single vendor’s security weakness can create vulnerabilities that expose sensitive data or compromise your business operations. A formal vendor onboarding process acts as a vital safeguard, mitigating third-party risks from the very beginning of the relationship.

Building a robust vendor onboarding process is not just about ticking off checkboxes; it’s about integrating security best practices into every stage of the vendor lifecycle. From procurement to contract termination, each step plays a vital role in protecting your organization’s data assets.

Below, we’ll walk through what steps to take to establish strong security practices during procurement, provide a checklist to guide a secure vendor onboarding process, and offer tips for maintaining robust security measures throughout the vendor relationship.

Procurement processes: Setting a foundation for secure vendor onboarding

The procurement process lays the groundwork for the relationship between your organization and the vendor. By incorporating cybersecurity into the initial conversations and contracts, you establish clear security expectations from the start of the partnership.

Before a vendor even reaches the onboarding experience, organizations should have already completed the due diligence process, created a risk remediation plan, and established contractual agreements around cybersecurity practices.

Vendor risk assessment

A critical first step in the procurement process is completing a vendor risk assessment. This process allows your organization to identify potential cybersecurity risks the vendor may introduce, such as vulnerabilities in their systems or gaps in their security controls.

Begin by categorizing the vendor based on the nature of their services and the level of access they will have to your systems or data. Critical vendors with access to sensitive data will require a more rigorous risk assessment. 

Audit reports or due diligence/security questionnaires can be used to gather essential information about the vendor’s cybersecurity practices, data handling procedures, regulatory compliance, and incident response history. Some organizations use standardized questionnaires such as the SIG questionnaire, or send custom security questionnaires that reflect their specific security and compliance requirements.

Identifying cybersecurity risks early in the procurement process allows you to address them before contracts are signed or the vendor is integrated into your systems. Remediating security risks after a vendor has access to your environment can be far more costly and disruptive.

Risk remediation

Conducting a vendor risk assessment is a critical step, but the true value lies in how effectively an organization addresses and remediates identified risks. Once risks have been identified, the next step is to prioritize them based on their potential impact on the organization. 

High-risk issues—such as inadequate data protection measures or weak access controls—should be addressed immediately, while lower-priority risks can be monitored or mitigated through contractual agreements. Organizations can use a risk matrix to categorize risks by severity and likelihood, which helps focus remediation efforts on the most critical vulnerabilities.

The next step is working collaboratively with the vendor to ensure that these risks are remediated. This may involve negotiating updated security controls, requesting that the vendor implement stronger data encryption, or adjusting access permissions to align with the principle of least privilege. For vendors that present significant risks, it’s essential to set expectations and clear deadlines for remediation and requesting updates on their progress. In some cases, you may need to revise the vendor agreement to include more stringent security requirements or specific remediation actions that need to be taken before the partnership moves forward.

In cases where certain risks cannot be fully remediated—due to the vendor’s limitations or resource constraints—organizations should consider mitigating controls or shared responsibility models. This might involve the organization taking on additional security measures to compensate for the vendor’s deficiencies, or even finding alternative vendors with more robust security practices. 

Regardless of the approach, it’s critical to document all remediation steps, maintain ongoing communication with the vendor, and ensure that any outstanding risks are continuously monitored to prevent them from escalating into larger security issues.

Contractual agreements and SLAs

In addition to assessing risks, organizations should have also defined clear contractual agreements with the vendor, particularly around cybersecurity expectations. Outline specific security requirements, such as data encryption standards, access control measures, and compliance with specific regulatory or security frameworks. It’s also helpful at this stage to define service level agreements that include security performance metrics or KPIs such as uptime and incident response times, as well as penalties or remedial actions for non-compliance with security standards or breach of SLAs.

Contractual agreements should also include clauses related to incident response, specifying how the vendor must notify the organization in the event of a security breach, the timeframe for reporting incidents, and the roles both parties will play in resolving the issue. Setting these expectations upfront ensures that vendors understand their responsibilities and can be held accountable for any cybersecurity incidents that occur during the relationship.

By the time the vendor reaches the onboarding phase, these assessments and agreements should provide a solid foundation for a secure working relationship. The risk assessment ensures that the organization understands and mitigates any risks before granting the vendor access to its systems, while contractual agreements establish a framework for maintaining security and accountability throughout your partnership.

Access controls

Access controls are essential to limit a vendor’s access to only the systems and data necessary to perform their responsibilities. Without robust access controls, vendors can pose significant risks to your organization’s security by having unnecessary access to sensitive information or critical systems. Ensuring that vendors are restricted to the minimum access required reduces the risk of accidental or malicious exposure and helps protect sensitive assets. Implementing and maintaining strict access controls also creates a clear audit trail, which is essential for monitoring and compliance.

Data security protocols

Data security protocols are a critical aspect of vendor management, especially when vendors have access to your sensitive information. Data breaches through third-party vendors can result in significant financial, legal, and reputational damage. Implementing proper security measures ensures that data is protected during transfer and storage, reducing the risk of exposure, theft, or corruption. Encrypting data both at rest and in transit safeguards it from unauthorized access and makes it more difficult for malicious actors to exploit vulnerabilities.

Training and policy acceptance

Vendor employees should be fully aware of your organization’s security expectations and best practices for data handling. Without proper training, vendors may inadvertently expose your organization to cybersecurity risks by mishandling sensitive data or falling victim to phishing attacks. Requiring security awareness training and documented acceptance of your organization’s policies ensures that vendor staff know how to interact with your systems securely and understand their responsibilities in maintaining the integrity of your data.

Incident response planning

An effective incident response plan is crucial for managing security breaches or cyberattacks that involve vendors. Vendors should have their own response plans, but those plans must also align with your organization’s procedures to ensure coordinated, timely responses to any incident.

A well-defined plan includes roles, escalation procedures, and clear communication channels between your organization and the vendor. This coordination helps to contain threats quickly, minimize damage, and ensure that proper disclosure and reporting requirements are met in a timely manner.

Tips for maintaining strong security throughout the vendor management lifecycle

Maintaining strong cybersecurity throughout the vendor relationship is just as important as the initial onboarding phase. Here are some tips to ensure that your organization's security remains robust throughout the vendor lifecycle.

During the vendor relationship

Once a vendor is onboarded, maintaining a secure relationship requires ongoing vigilance. It’s not enough to assess risks only at the beginning or end of the relationship—continuous monitoring, auditing, and communication are key to ensuring that the vendor maintains a strong security posture over time.

Regular assessments help identify any emerging risks, enforce compliance with security agreements, and adapt to changes in the vendor's operations or your organization’s requirements. By actively managing security throughout the vendor lifecycle, you can mitigate potential threats and ensure that both parties remain aligned on critical security standards.

• Implement continuous monitoring tools to track vendor activity within your systems and detect any unusual or suspicious behavior.
• Schedule regular security audits, especially if the vendor handles critical data. If the vendor periodically completes a third-party audit to comply with frameworks such as SOC 2 or ISO 27001, you can also request the updated audit report.
• Review the vendor’s performance, focusing on compliance with SLAs, the effectiveness of security controls, and response to any security incidents.
• If feasible, require penetration tests or vulnerability assessments on the vendor’s systems, particularly if they are integrating with your environment. Request the vendor’s security team to share results and remediation plans for vulnerabilities identified.
• Document all vendor risk assessments, contracts, audits, and incident responses. This documentation is essential for regulatory compliance, audits, and continuous improvement of vendor management processes.

During vendor offboarding

When a vendor relationship ends, it’s critical to offboard them securely to prevent any lingering risks. When terminating a vendor relationship, it’s essential to ensure that all access is revoked, data is securely returned or destroyed, and any potential vulnerabilities are closed.

• Immediately revoke all vendor access to your systems, networks, and data upon termination. This includes deactivating accounts, tokens, and credentials. Verify that no lingering permissions remain in the system.
• Refer to your contract to determine whether data should be returned or securely destroyed at the end of the vendor relationship. If destroyed, request proof of destruction.
• Ensure the vendor no longer retains any sensitive data or backups.
• Conduct a final audit to ensure that the vendor has complied with all termination procedures, including data return, destruction, and revocation of access.

Automate and streamline your third-party risk management

Secureframe’s GRC automation platform simplifies the vendor onboarding process with comprehensive vendor management and risk assessment tools that ensure your third-party relationships stay secure.

• AI-powered risk assessment workflows streamline the onboarding process by quickly identifying vendor risks, assigning risk scores, and suggesting effective treatment plans—all with just a few clicks.
• Easily document risk treatment plans and track the full risk history, providing clear evidence for auditors and stakeholders to demonstrate the steps you’ve taken to mitigate vendor risks and strengthen your security posture.
• Build out your vendor risk register using Secureframe’s comprehensive risk library, which includes NIST-based risk scenarios covering key areas like Fraud, Legal, Finance, and IT.
• Stay ahead of potential threats by tracking control health and automatically flagging vulnerabilities across your tech stack with continuous monitoring.
• Automate responses to security questionnaires and RFPs using machine learning, making it easier to demonstrate compliance while saving time and resources.
• Showcase your security posture with Secureframe’s Trust Center, allowing you to share your own compliance status with third-party vendors and partners, building trust from the start.

Secure vendor onboarding is critical for protecting your organization. Learn how Secureframe can help streamline your security and compliance processes while reducing third-party risks by scheduling a demo with one of our product experts.