Reputational Risks With Third Party Vendors

As you serve your customers, your organization's reputation and goodwill become one of your most valuable assets.

You don't want their value to suffer because of incidents at your Cloud or SaaS provider.

Imagine an outage at your CSP causes you to miss a deadline for a a big project. Worse, this project calls for financial penalties for missed deadlines.

Imagine having a good shot at a major RFP but glitches in the SaaS solution slow down your progress to the point you fail to submit your proposal on time.

Not only do you suffer the financial loss, but missed deadlines hurt your reputation and could affect future opportunities as word gets around that you’re unreliable.

When I helped an insurance agency choose a SaaS provider to replace its 35-year-old DOS-based program, a deciding factor included a lawsuit one of the finalists settled for $20 million after failing to report a data breach to its customers in a timely manner.

You don't want to have to inform your customers six months after the fact that their data had been breached because of your CSP’s or SaaS provider's negligence.

Whether the CSP and its insurance can absorb that or not, do you want to be associated with a company that doesn’t properly notify customers affected by a data breach?

You should not sign with a CSP unless its contract contains clear language of when it will respond to such incidents and shows otherwise that it takes such reporting seriously.

Furthermore, you need to know if a potential vendor responds to other problems, incidents and crises in the same manner you do with your own customers, employees, vendors and other stakeholders.

An incident can create momentary doubt in their minds about your organization, but your response to it and your handling of their individual problems ultimately determine whether they want to continue doing business with you.

The same holds true for your SaaS or Cloud provider, which by extension, is your organization.

For more information about performing a VRA on Cloud and SaaS vendors, grab your FREE copy of our e-Book, "Find Your Cloud 9's", which offers a mini-guide to the VRA process. 

To set up a Reference Interview on the questions you have about investing in new technology for your business, contact me at 302-537-4198, ericm@edminfopro.com or on our Contact form.