Business Continuity Testing With Third Party

Business Continuity  (BC) and Disaster Recovery (DR) Planning are the processes of developing, testing and maintaining plans to sustain business resiliency as well as normalize operations should a business be disrupted by either a man-made or natural disaster.

Disruptions are always unexpected. Natural disasters like floods, earthquakes and fires are events that can destroy buildings and potentially harm a workforce. And, of course, we're all familiar with how a global pandemic can disrupt every type of business. Or, a cyber attack that affects supply chain. Whether it forces millions of people to work from home or completely restructures a business model, no organization is immune to the effects.

Make it a priority to validate your third parties' BC and DR plans. Especially your critical third-party vendors! What should you be doing to ensure your third parties are taking BC/DR seriously and have well-developed, fully tested BCPs in place?

7 BC/DR Elements Your Third-Party Vendor Should Have

Here's a simple checklist of 7 elements your third-party vendor should be able to provide you if they're taking BC/DR planning seriously:

1. Risk Assessments
2. The Business Impact Analysis
3. Recovery Strategies
4. Business Continuity Plans
5. Disaster Recovery Plans
6. Pandemic Plans
7. Testing & Exercises

What Happens If a Critical Third-Party's Plan Is Insufficient?

Consider this scenario. You request a business continuity plan from your critical third-party vendor and what they send you is a one-page BC/DR summary. Or, maybe they can't provide one at all. If this is truly a critical third-party vendor, you have a problem. Just like financial and SOC analyses, documented evidence of BC/DR is a must-have for every critical vendor.

Faulty BCPs could result in the following ripple effect:

• If the critical vendor isn't prepared for a business disrupting event, they risk major delays when trying to resume uptime.
• Your critical vendor's operational delays may interfere with your organization's operations, causing more downtime that's allowed in your own BC/DR plans.
• Also, your critical vendor may lose, and not be able to recover, some of your data.
• Ultimately, your organization's reputation may be at risk because of your critical vendor's weak BCP. Your customers will think that any delays are directly caused by you!

6 Steps to Take to Resolve BC/DR Issues

The following are steps you can take to resolve any BC/DR issues, before they happen, if a critical vendor can't or won't produce an adequate business continuity plan:

1. Make sure BC/DR are part of your contract. Do this with every critical third-party vendor.
2. Remind the vendor of their responsibility. If providing evidence of an adequate BC/DR program is part of your contract, and they still can't provide it, remind the vendor of their responsibility. Most vendors will honor their contractual obligations.
3. Use your lines of defense. Your first line has direct contact with the vendor on a daily basis. Have them ask for resolution of any BC planning problems.
4. Request a copy of the vendor's BC planning policy. If you left BC/DR out of the contract, then request a copy of the vendor's BC planning policy to suffice in the meantime. You're seeking a board approved policy.
5. Ask for a copy of the business continuity plan itself. Vendors may be hesitant to share the details. That's fine if you can see evidence of the seven checklist items mentioned earlier.
6. Go to your fourth-party vendor, if needed. The critical third-party vendor may have outsourced the product or service to a vendor (a fourth-party vendor to your organization). If that's the case, it's time to take it a step further and ask the fourth party to provide the documentation you need.

A solid BCP is essential.  Some vendors may rise to the occasion and implement a comprehensive BCP that aligns with your policy, while others will fall short. If your third-party vendor's BCP doesn't meet your standards, you may need to begin the process of finding a vendor that does.

Dive deeper into what to know about your vendor's business continuity plan. Download the eBook.

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Source: https://www.venminder.com/blog/critical-third-party-poor-business-continuity-plan

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