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Where Target Went Wrong
When determining the vendor risk, there are two initial steps every organization should begin with. First, organizations need to know who all of their vendors are. If you don’t have an inventory of every company you work with, how can you possibly know all the risks that your organization faces because of the vendors? Many organizations fail even this first step. The second step (and where Target missed the mark) is classifying your vendors. It’s not enough to just know who your vendors are. Organizations also need to know the amount of risk the vendors pose to you. You can do this a number of ways, but the key is to categorize your vendors based on the types of information they touch (very sensitive or not sensitive) and how much data they have access to. This is where Target went wrong.
How This May Have Been Avoided
It’s likely that Target (and many organizations, frankly) would look at an HVAC provider like Fazio Mechanical and immediately write them off as a low-risk vendor. In actuality, and because of the vendor’s access to Target’s online portal, Fazio Mechanical probably should have been classified as a medium-risk vendor. Doing your due diligence in classifying a vendor as low risk is often enough to brush them off to the side and reevaluate their status in another year. However, in strong vendor risk management programs, medium-risk vendors are required to go through a vendor risk assessment process where the organization can get an understanding of the amount of risk that exists before allowing that vendor to continue to access its critical information. It’s likely that Target did just that— brushed off their HVAC provider as a low-risk vendor and pushed them off to the side for reevaluation down the road. Had they gone through an assessment with the vendor as if it were medium risk, they likely would have caught the lack of protection that was the reason behind the breach.
Vendor Risk Management is About Logic
Making assumptions in information security is detrimental. Making assumptions provides a vehicle for avoiding issues that may be hyper-pertinent to your business. You may think that a vendor is low risk when it actually belongs in a more sensitive category. When organizations take objectivity out of the classification step of vendor risk management, they take out any assumptions and guesses. Assumptions and guesses erode your credibility. If Target had gone through proper and objective steps to classify Fazio Mechanical (even if they classified them incorrectly) at least they would have been able to prove that they did their due diligence and that the breach was not a cause of their negligence.
How You Can Prevent This
Vendor risk management is all about simplifying, standardizing and making yourself defensible. Build a list of your vendors first. Then, work through standardized criteria to determine how much risk they pose to your organization. Get an understanding of exactly how they work with your organization and what kinds of data they touch. By doing that, you get an immediate grasp on how important it is that they handle their own information security practices well. If you do that, it’ll make sure you are defensible if something does go wrong, and likely help limit the amount of vendor-caused incidents you experience. You can simplify this process by implementing a vendor risk management tool like SecurityStudio to help you automate your vendor identification and classification. With SecurityStudio, it’s likely that Fazio Mechanical would have been flagged as a medium risk vendor, and then steps would have been taken to improve their security once the risk assessment was completed. For more information on vendor risk management and for a live look at the tool that can help make your organization’s vendor risk management program simplified, standardized and defensible, visit securitystudio.com.
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