Third-party and supply chain risks have become front-and-center cybersecurity concerns for businesses of all sizes. For Managed Service Providers (MSPs) and small-to-mid-sized enterprises (SMEs), a single vulnerable vendor or software supplier can open the door to a major cyber incident. In fact, over a third of data breaches in 2024 were linked to third-party compromises. High-profile attacks like SolarWinds and Kaseya show how one compromised supplier can trigger global crises. This makes third party risk management and supply chain security not just IT issues, but fundamental business priorities.
MSPs face a dual challenge: protecting their own operations and ensuring the vendors and software they manage for clients are secure. Meanwhile, SMEs often rely on multiple partners and SaaS providers to operate efficiently, which increases their exposure. In this article, we’ll explain why identifying and mitigating third-party and supply chain risks is so important, outline practical steps (from vendor security reviews to continuous monitoring), and show how Rotate’s cybersecurity platform, including its Hubs (EASM, Email, Training) and Managed Detection & Response (MDR) service, helps MSPs and SMEs reduce these risks effectively.
No organization is an isolated island. Whether it’s an IT service provider, a cloud platform, or a hardware supplier, external parties often have trusted access into your network or handle sensitive data. This interdependence can become an Achilles’ heel if not managed properly. A company’s security is only as strong as its weakest vendor. Key reasons third-party and supply chain risk management is critical include:
In short, third-party risk management and supply chain security measures are essential for protecting your operations and customers. Next, we’ll cover how to put these measures into practice.
Managing third-party risk involves a combination of upfront diligence, enforceable agreements, and ongoing oversight. Below are key steps and best practices MSPs and SMEs should implement:
By combining these practices – thorough upfront vetting, contractual controls, and ongoing vigilance - MSPs and SMEs can significantly reduce third-party risk. Next, we’ll explore how technology can make these processes easier and more effective.
Rotate’s cybersecurity platform gives MSPs and SMEs full visibility into internal and external risks, especially those introduced by vendors and suppliers. The hubs and MDR service work together to detect, assess, and mitigate third-party vulnerabilities before they escalate.
Together, these tools form a scalable, modular defense system. MSPs can manage client risks with confidence, and SMEs get enterprise-grade supply chain security, without the overhead.
In today’s hyper-connected business environment, third-party and supply chain risk management is no longer optional - it’s a necessity for survival. By taking a proactive approach to vendor security reviews, enforcing strong contractual safeguards, and continuously monitoring partners, MSPs and SMEs can significantly reduce the likelihood of a devastating supply chain attack. The cost of inaction is simply too high: a single weakness in your vendor ecosystem can lead to downtime, legal liabilities, and loss of customer trust.
Fortunately, you don’t have to tackle this challenge alone. Platforms like Rotate are designed to make comprehensive security accessible and manageable, even for smaller teams. Rotate’s EASM, Email, and Training hubs, along with its 24/7 MDR service, give you a consultative, all-in-one solution to identify and mitigate risks across your entire supply chain. From real-time visibility into vendor vulnerabilities to rapid incident response, Rotate helps you stay one step ahead of threats.
Don’t wait for a third-party breach to make headlines. Take action now to fortify every link in your supply chain. Contact Rotate for a demo or to learn more about how our platform can help your organization tighten third-party risk controls and achieve stronger security resilience. With the right strategy and tools in place, MSPs and SMEs can confidently leverage third-party services to grow their business - without compromising on security.
Q: What is third-party risk management in cybersecurity?
A: Third-party risk management is the process of evaluating and controlling the security risks presented by external vendors, suppliers, or service providers. It involves vetting vendors’ security practices, setting requirements (like data handling standards and breach notification timelines), and continuously monitoring those third parties for any weaknesses or incidents. The goal is to ensure that a vendor’s security lapse cannot compromise your own organization’s data or systems.
Q: How can I assess if a vendor is secure enough to work with?
A: Start with a thorough vendor security assessment. This may include a questionnaire about their policies (encryption use, access controls, etc.), reviewing any compliance certifications or audit reports (such as SOC 2 or ISO 27001), and checking for past breach history. You should also evaluate technical aspects: for software vendors, examine their update and patching process; for service providers, understand how they segregate your data. It’s often useful to assign a risk level to each vendor (high, medium, low) based on the sensitivity of what they handle. High-risk vendors might warrant on-site audits or penetration tests as well. Rotate’s platform can automate many of these checks, like scanning a vendor’s exposed systems for vulnerabilities and ensuring they meet your security baselines.
Q: What should I include in contracts with third-party providers to improve security?
A: Contracts are a vital tool for enforcing security expectations. Key elements to include are: clauses requiring the vendor to implement specific security controls (e.g. up-to-date antivirus, firewall policies, employee training), a requirement for timely notification (within 24 or 48 hours) if they experience a breach affecting your data, and provisions allowing you to audit or request evidence of their security measures. You may also include data protection agreements that clarify how they must handle and protect your data (preventing sharing with sub-contractors without consent, for instance). Finally, ensure there are consequences outlined (like the ability to terminate the agreement) if the vendor fails to meet these obligations or suffers negligent security lapses. These contractual safeguards complement your technical and procedural risk management efforts.