Hence as a part of the Enterprise Risk management framework, i is nocessary for the VMO to

upgrade themselves from risk assessors to risk managers.

Risk Risk
Assessors Managers
Figure: Move from transactional to Strategic function
Risk Maragement ako consists of 2 broad categories;
" Managing Overall Vendor Risks
" Managing Risks in the project

Enterprise Risk Management

Assessing Maneging
Overall
Vendor
Risk

Risk
Management
in
Ascessing
Risk in the Managina Outsourcing
Project

Managing Ovemll Vendor Risks

Since the gobal financ ial crss, companies around the workd are generally facing stricter
requirements for reporting and managing service-provider risks and third-party compiance
obligations. For reguhted entties (e.g fnanc ial services instiutions, phamccu ical
manufacturers, ctc.), robust vendor risk management capabilities are becoming even more critical,
as regukatory complexity escalates aong wih the firancial and reputational cosequences of non
conpliance.
This station, coupled wih the increasing sophisticat ion of outsourcing deas, has cased many
companies to ivest in developing vendor risk management capabilt ies buit upon robust risk
mangement fameworks. These frameworks are critical for assisting organizations in
understand ing the risks posed by thei service providers at an enterprise level and in providing

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