How to Manage Vendors with COBIT 5 Frameworks

As enterprises increasingly rely on cloud service providers and other vendors to provide fundamental services, the related risk becomes more significant. Global IT association ISACA says that COBIT 5 governance framework helps enterprises effectively manage vendors.

ISACAs report says that COBIT 5 provides practical action items for all stakeholders involved in the vendor-management process, from the board and C-level executives to the legal department and IT. The vital aspects of the management process includes :

• Life cycle stages and stakeholders
• Good practices to manage threats and risk
• How to manage a cloud service provider
• Practical service level agreement (SLA) templates, checklists and examples (available for download in an online toolkit)
• A case study outlining the consequences of ineffective vendor management
• A high-level mapping of >COBIT 5 and ITIL V3 for vendor management

Recent research from the IT Policy Compliance Group reveals that approximately one out of five enterprises does not invest sufficient effort to manage vendors and vendor-provided services effectively, said NikolaosZacharopoulos, CISA, CISSP, senior IT auditor at DeutschePost-DHL and member of ISACAs Guidance and Practices Committee.This means that enterprise requirements and standards are not properly incorporated into vendor contracts, ownership of information being handled by vendors remains unclear, and access to information is not guaranteed if the vendors go out of business.

The >ISACA emphasizes that IT vendor management is not solely ITs responsibility, and is the responsibily of stakeholders within the enterprise.

As companies worldwide are turning toward fewerbut much more integratedvendors, they are benefiting from a single point of contact. However, they are simultaneously increasing risk to the enterprise, and that risk needs to be managed rigorously by all stakeholders, said Zacharopoulos. The COBIT 5 framework provides tested guidance to help them effectively govern these relationships so they deliver maximum value with minimum risk.

According to Zacharopoulos, vendors constitute an important part of an enterprises external environment. The increased use of outsourcing and cloud computing implies that vendors are taking on an increasingly fundamental role in the operations of an enterprise.

As the scope, scale and complexity of vendor relationships and services increase, the risk related to them and the importance of effective vendor management increase proportionately.

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