Third party cyber risk management (TPCRM) is now at the center of how organizations must think about resilience. In fact, Gartner identifies third party cyber risk management (TPCRM) as an emerging innovation for a reason: the way you manage vendor risk has to evolve. Today’s businesses rely on sprawling ecosystems of third parties, from software providers to logistics partners, often numbering in the hundreds or thousands. While third-party relationships bring speed, scale, and expertise that’s hard to match internally, they open the door to new cyber risks.
And as many organizations have learned the hard way, no category of risk hits harder today than cyber risk.
Not long ago, third-party risk management (TPRM) meant checking a vendor’s financial stability and having legal review the contract. Cyber risk was treated as just another line item to check off during onboarding.
But in today’s risk landscape, that approach doesn’t cut it anymore. Cyber incidents are now considered a top global business risk, with 38% of risk management experts saying it’s their biggest concern. And it only takes a single weak password, clicked phishing link, or unpatched system at a supplier to cause downtime, reputational damage, and major financial losses for your business.
That’s why third party cyber risk management is finally getting the attention it deserves. It’s not a new idea, but the urgency is. When a single vendor’s cyber incident can bring your entire business to a standstill, TPCRM isn’t just another piece of risk management—it’s the function that keeps every other risk from unraveling.
So, what is third-party cyber risk management? To understand what it is and how it differs from traditional TPRM, it helps to start with the basics.
Traditional third-party risk management (TPRM) is the discipline of identifying, assessing, and mitigating risks across your vendor ecosystem. These risks can include:
Third-party cyber risk management (TPCRM) focuses more narrowly on the cybersecurity risks. It looks at how vulnerable a third party is to a cyber attack, how prepared they are to respond, and what the impact would be on your business if they were to fail.
Cyber may be just one element of third-party risk management, but it has an outsized impact. A ransomware attack or system outage at a vendor isn’t just an IT issue—it can bring your entire business down with it.
We saw this happen with Knights of Old (KNP Logistics), a 158-year-old British trucking company that collapsed after a ransomware attack. The incident wasn’t just a “cyber problem” or even just contained to KNP itself. Upstream and downstream businesses were left waiting for trucks carrying raw materials, parts, and consumer goods that never arrived. What began as a cyber incident at one company quickly became an operational and financial crisis for every business that depended on it. A leader at one aerospace manufacturer even told me that event alone cost his company $5 million.
TPCRM isn’t a subset of TPRM. It should be at the center of your risk strategy. And while both disciplines are necessary, if you skip the cyber layer, traditional TPRM is dangerously incomplete.
TPCRM has become a critical pillar of risk management—and it’s no longer just a technical discipline. It’s now a board-level business concern.
Vendor ecosystems are larger and more connected than most organizations even realize. Ask business or technical leaders how many vendors they work with, and the number they give is almost always lower than reality. Every one of those vendors is a potential vector for risk—and the exposure doesn’t stop at direct partners. A fourth- or fifth-party outage can be just as damaging as a problem with a primary vendor because every link in the supply chain is connected.
And when something in that chain breaks, the fallout can be severe. Cyber incidents now have a massive impact on business operations, shifting the concern from data loss to business resilience. If a logistics partner can’t move shipments or your billing system can’t process payroll because of a cyber incident, everything stops. Look at the CrowdStrike outage last summer. A faulty update—not even a cyberattack—directly impacted 25% of the Fortune 500, grounding flights, delaying medical procedures, and disrupting financial services worldwide. It showed just how fast a single third-party failure can wreak havoc across entire industries.
That growing exposure has caught the attention of regulators. Frameworks and rules around the world—from the EU’s DORA and NIS 2 directives to SEC cybersecurity disclosure rules in the U.S.—are setting higher expectations for accountability. Regulators expect companies to understand the cyber posture of their critical vendors and manage that exposure continuously.
Analysts are taking notice too. In 2025, Gartner included Third-Party Cyber Risk Management (TPCRM) in its Hype Cycle for Cyber-Risk Management for the first time, recognizing it as a defined market with growing adoption. Black Kite is highlighted as a sample vendor in this report, reflecting how platforms like ours are helping organizations operationalize TPCRM.
The third-party risk management lifecycle is the process organizations use to evaluate, monitor, and manage vendor risk across the entire relationship.
When looking at how TPCRM fits into the typical risk management lifecycle, it’s helpful to simplify the view into three phases: before onboarding, during the contract term, and after when renewal or offboarding decisions are made.
Cyber due diligence has to be part of every vendor review. Financial and legal checks are important, but they won’t protect you if the vendor is riddled with vulnerabilities. The challenge is that this step often becomes the bottleneck. One company found that vendor onboarding was taking six to eight weeks, mainly because the cyber review process slowed everything down. After automating cyber assessments, they were able to cut that window to just a few days, onboarding vendors faster while lowering risk.
Cyber risk doesn’t freeze once the contract is signed. A vendor that looked fine last quarter may be compromised today. Continuous monitoring provides early warning of ransomware susceptibility, leaked credentials, or new vulnerabilities. With the right platform you can continuously monitor:
Decisions about whether to extend or end a vendor relationship should factor in cyber performance over time. Vendors that consistently underperform or fail to improve their cybersecurity posture aren’t just frustrating. They’re liabilities. With solutions like Black Kite Bridge™, companies can share findings directly with vendors, assign clear remediation steps, and track progress until issues are resolved. That way, renewal talks are based on facts, and if you do decide to part ways, offboarding can be handled cleanly.
As a security leader, the case for putting a third party cyber risk management program at the center of your company’s risk strategy may seem obvious. But in practice—when TPRM ownership is scattered across departments, vendor ecosystems keep expanding, and executives don’t always connect cyber risk to business impact—getting a TPCRM program off the ground isn’t always straightforward.
Here are the common roadblocks CISOs face when building or maturing a TPCRM program, and how to work through them:
Companies usually have a decent handle on their largest vendors, but risk often hides deeper in the supply chain. Smaller suppliers and niche providers tend to fly under the radar and attackers know it. Those are often the entry points that go undetected until it’s too late. But with so many vendors to assess, how do you prioritize your efforts and allocate limited resources? Capabilities like Black Kite’s RSI™ can help organizations identify which vendors are most likely to fall prey to ransomware gangs so they can focus their attention there.
Too many TPCRM programs rely on static questionnaires and point-in-time assessments. But those only tell you what a vendor’s posture looked like weeks or months ago. Meanwhile, the threat landscape is constantly changing. With continuous risk monitoring, organizations can see when vendors are tied to a new exploit or ransomware campaign so they can get ahead of it.
Even with better visibility and timelier risk intelligence, the sheer volume of vendors can overwhelm even well-resourced teams. Trying to manually track thousands of suppliers and every new alert just isn’t feasible. This is where AI and automation become invaluable. They can sort through the noise, flag likely ransomware targets, and highlight the exposures that demand attention.
Communication is often where third-party cyber risk management programs fall apart. Even when CISOs have solid threat intelligence, it often doesn’t land because it’s framed in technical terms. A patch count or risk rating won’t mean much to a CFO, but the projected cost of downtime or lost revenue will. Cyber risk quantification (CRQ) bridges that gap by translating technical findings into financial terms, giving executives and TPRM leaders the context they need to make better decisions.
Vendor ecosystems will only continue to grow, regulations will only get stricter, and attackers will only get more creative. Organizations that treat third party cyber risk management as separate from TPRM will constantly be reacting to the latest crisis.
Cyber incidents at vendors are no longer isolated IT problems—they are business-stopping events. Organizations that stop thinking of TPCRM as a subset of risk management—and start viewing it as the connective tissue that holds their whole TPRM program together—will be the ones positioned to build lasting resilience.
Looking to expand your knowledge on building out the right TPRM program but unsure where to start? Check out our starter pack of TPRM essentials: