Third-party vendors are essential to the operations of nearly every organization today. From cloud service providers to HR platforms, businesses increasingly rely on a growing web of external vendors to operate efficiently and scale rapidly. This reliance, however, introduces significant risk.
In 2024, 61% of companies experienced a data breach caused by a third-party vendor, marking a 49% increase from the previous year. At the same time, 77% of organizations reported lacking full visibility into their third-party vendor risks. This combination of increased dependency on vendors with reduced oversight has created a significant blind spot in many cybersecurity programs, opening the door for MSPs and MSSPs to expand into Third-Party Risk Management (TPRM) services. However, offering TPRM services introduces its own set of challenges, especially when managed manually. Traditional methods like spreadsheets, ad hoc surveys, or siloed GRC tools can quickly become time-consuming, inconsistent, and difficult to scale.
Fortunately, new purpose-built platforms are emerging that empower MSPs to streamline TPRM workflows, increase efficiency, and scale these services across multiple clients with ease. By embracing the right tools, MSPs can turn TPRM into a scalable and profitable offering.
The Booming TPRM Market: Opportunities for Growth
Organizations today face intense scrutiny from regulators, customers, and partners, as they strive to demonstrate that they are effectively managing third-party risk. Many compliance standards require evidence of vendor due diligence, and clients are under growing pressure to validate the security posture of their vendors.
MSPs and MSSPs are well-positioned to extend their value by offering TPRM services. This natural extension complements existing offerings like vCISO services, internal risk management, and regulatory compliance support. TPRM services can be packaged as premium offerings, opening new revenue streams. These services can enhance client trust and differentiate providers in a competitive market.
Revenue opportunities go beyond initial vendor risk assessments. The results often uncover new service needs, such as implementing security controls, addressing compliance gaps, or remediating specific issues, all of which can translate into billable projects.
Market trends reinforce this shift. The global TPRM market is projected to increase from $7.42 billion to over $20.5 billion by 2030, reflecting a compound annual growth rate of 15.7%. As vendor ecosystems become increasingly complex, organizations are turning to MSSPs to help them efficiently navigate risk. Those that offer structured, scalable TPRM services will be at the forefront.
As demand for TPRM services grows, MSPs and MSSPs must also be prepared to navigate the operational and strategic challenges that come with delivering these offerings at scale.
Overcoming Common Challenges in TPRM Adoption
Balancing Depth with Scalability
One of the most significant barriers to adopting TPRM is the time required for manual assessments, often ranging from 7 to 16 hours per vendor. For MSPs managing dozens or even hundreds of vendors across multiple clients, this quickly becomes unsustainable.
A scalable solution is to implement a tiered approach, applying comprehensive assessments to high-risk vendors while using more streamlined methods for lower-risk ones. Automation makes this possible by accelerating data collection, standardizing scoring, and simplifying reporting. With the right tools, MSPs can maintain accuracy and depth where needed, while dramatically reducing the time and effort required across the board.
Client Education and Buy-In
Some clients may not immediately see the value in vendor risk management, especially if they haven’t yet experienced an incident. Instead of focusing on negative outcomes, emphasize how TPRM supports strategic goals like maintaining operational resilience, meeting regulatory requirements, and building trust with their own customers and partners.
Another effective approach is to frame TPRM as a competitive advantage. By proactively managing vendor risks, clients can streamline procurement processes, accelerate compliance audits, and demonstrate maturity in their cybersecurity programs, all of which strengthen business relationships and support growth.
Integrating TPRM into Broader Cybersecurity Programs
Managing vendor risk in isolation can lead to silos and limit visibility into the full scope of risk. One way to address this is by aligning vendor risk assessments with internal security programs, offering clients a unified, strategic view that strengthens overall resilience and supports compliance readiness.
Navigating the Complexity of Vendor Ecosystems
Most clients underestimate the number of vendors they work with and how those vendors are interconnected. Even a low-risk vendor could introduce vulnerabilities through its relationships with other high-risk partners. To address this, MSPs should start by mapping vendor ecosystems to understand relationships and dependencies. This approach reveals the real-world impact of interconnected risks.
A Roadmap for MSPs to Get Started with TPRM
The Core Components of TPRM Services
Delivering effective TPRM involves building a comprehensive, repeatable process that clients can rely on for ongoing insights. The components of TPRM services include:
| Component | Description | Benefit for MSPs and clients |
| Program Governance & Framework | Establishing policies, procedures, roles and responsibilities, defining risk tiers, and aligning with relevant standards/regulations. Ensuring oversight from leadership and a clear decision‑making structure. | Establishes a consistent, auditable foundation that supports compliance and client trust. |
| Vendor Inventory & Risk Profiling (Pre-assessment classification) | Maintaining a centralized, up‑to‑date inventory of all third parties, and classifying vendors by risk (data sensitivity, access, criticality, country, geopolitical, financial stability, etc.). | Enables smarter resource allocation by focusing effort on the highest-risk vendors. |
| Risk Assessments & Due Diligence | Conducting formal, standardized assessments to evaluate vendor risk before onboarding and throughout the vendor relationship. This includes reviewing security questionnaires, audit reports, and key controls across cybersecurity, data protection, operational resilience, financial stability, and compliance. | Reduces risk exposure by validating vendor security and compliance postures on an ongoing basis |
| Contract & SLA Review | Advising on the inclusion of key risk controls, SLAs, and exit/offboarding clauses in vendor contracts to ensure clear accountability for performance, security, and resilience. | Ensures vendors are contractually accountable for performance and security. |
| Continuous Monitoring | Monitoring vendor performance, security posture, events, regulatory changes, and financial stability, among other factors, using automated tools where possible, and triggering escalations or reassessments when risk levels change. | Detects emerging vendor risks early without overburdening your team. |
| Incident & Breach Response | Reviewing vendor procedures for reporting, escalation, and remediation to ensure they align with client needs and regulatory standards. This can include coordinating communication, validating remediation, and, in some cases, conducting tabletop exercises with critical vendors. Depending on the service offering, service providers may act as a first responder if a vendor-related incident occurs, coordinating between the vendor and the client for investigation, remediation, and regulatory reporting, and providing post-incident reports. | Ensures that incidents are addressed quickly and effectively. |
| Reporting & Metrics | Demonstrating value and progress to clients or internal key stakeholders with dashboards, risk heatmaps, scorecards, and regular reports. Tracks key performance indicators such as the number of high-risk vendors, time to remediate, percentage of vendors under continuous monitoring, and incidents flagged. It can support audit readiness and maintain clear evidence trails. | Builds credibility and client trust by demonstrating progress and program effectiveness. |
| Advisory & Education | Training clients and internal teams about vendor risk, sharing best practices, helping clients understand what makes a vendor high or low risk, advising on improvements, and staying current with regulatory changes and the risk landscape. | Strengthens client relationships by positioning the MSP as a strategic advisor. |
Phased Implementation Guide: Launching and Growing TPRM Services for MSPs
Starting a TPRM offering does not require a complete business overhaul. A structured, phased approach allows MSPs to build, refine, and scale their vendor risk services efficiently while delivering value early.
| Phase | Key activities |
| Phase 1: Assess Current Capabilities and Identify Gaps | Evaluate your current tools, skills, and processes for TPRM advisory, reporting, vendor risk assessments, risk profiling, continuous monitoring, etc.Identify any gaps in how vendor data is tracked, monitored, and managedDefine the policies, procedures, and governance structures you want to implementStart thinking about the business case: why clients should invest in a TPRM program and why your MSP is well-suited to deliver the service Insight: Map the key vendors of your top clients to gain a clear picture of the challenge and opportunity. |
| Phase 2: Select the Right TPRM Tools and Platforms | Avoid general tools that require custom buildsChoose purpose-built platforms specifically designed for MSPs and MSSPs, such as CynomiPrioritize automation, multitenancy, and templated workflowsPrioritize platforms that provide executive-friendly dashboards and customizable reporting (heatmaps, scorecards, risk registers)Look for platforms that provide scalable license modelsValidate the tool’s own security posture and certifications Insight: Look for platforms that integrate internal and external risk views into a single dashboard. |
| Phase 3: Define the Scope of TPRM Services | Decide whether to offer TPRM as a standalone service or bundle it with other services, such as vCISO, GRC, compliance readiness, MDR, and strategic advisory services.Outline deliverables and service tiers, and align service levels with client maturity and risk profileBegin reviewing client vendor contracts and SLAs to identify missing or weak risk-related clausesDevelop standard language and templates to include breach notification, security requirements, and audit rights Insight: Create tiered service levels to align with client needs, for example, basic assessments for compliance, and advanced packages for continuous monitoring. |
| Phase 4: Train Staff and Build Expertise | Invest in training across technical and business areas of vendor riskDevelop playbooks and standard workflowsAssign ownership for vendor risk delivery and oversightDefine internal and client-facing procedures for vendor-related incidents and breach responseTrain staff on roles, communication plans, and escalation protocols Insight: Consider partnering with TPRM experts to jumpstart your offering and accelerate time to value. Having clear breach response procedures in place reduces confusion during incidents and builds client trust. |
| Phase 5: Pilot the Service with Select Clients | Select pilot clients with existing compliance needsDeliver assessments and reportsBuild client-facing dashboards, reports, and communication templatesTrack performance and collect feedbackIdentify improvement areas before full rollout Insight: Use pilot projects to refine your workflows and generate case studies or testimonials. |
| Phase 6: Scale and Market the Service | Promote TPRM in client-facing proposals and renewalsOffer advisory support to help clients act on assessment results and improve vendor controlsExpand client reporting to include KPIs, heatmaps, and executive summariesUse consistent communication to demonstrate value and drive renewalsEducate clients on the risks and benefits of vendor risk managementBuild marketing assets that highlight outcomes and differentiators Insight: Emphasize value in terms of reduced risk, improved compliance, and operational savings. |
A New Way Forward: Cynomi’s TPRM Module for MSPs
Cynomi’s intelligent vCISO platform includes a fully embedded TPRM module designed for MSP and MSSP workflows. Instead of juggling spreadsheets or separate tools, MSPs can manage both internal and vendor risk from a single system—cutting assessment time by up to 79% and boosting profit margins by 30%, enabling them to scale services more profitably.
Key capabilities include:
- Step-by-Step Guidance: Guided workflows and CISO-aligned scoring help navigate vendor risk assessments with clarity.
- Vendor Risk Assessments: Reusable templates and configurable impact scoring help standardize and accelerate vendor assessments.
- Customizable Frameworks: Align impact and security evaluations with each client’s policies and regulatory requirements.
- Shared Vendor Management: Create vendor records once and reuse across clients, eliminating duplication and improving audit-readiness.
- Unified Risk Visibility: View vendor and internal risk scores side-by-side to strengthen client-level risk posture insights.
- Visual Risk Prioritization: Easily identify high-risk vendors using built-in heat maps.
- Efficient Reporting: Simply export vendor risk data for quick client reporting.
- Integrated Remediation: Vendor risks can be incorporated into client remediation workflows.
- Upsell Opportunities: Cynomi TPRM highlights gaps and weaknesses that open doors for additional services.
Cynomi’s vCISO platform is a cybersecurity and compliance management platform that empowers service providers to scale their services by standardizing processes and automating time-consuming tasks. Powered by AI and infused with CISO knowledge, Cynomi enables service providers to efficiently manage cybersecurity for more clients — saving time, boosting productivity, and enhancing service quality.
Vendor Risk is the New Competitive Edge
TPRM represents a significant opportunity for MSPs to expand their services, increase efficiency, and build stronger client relationships. By integrating structured and automated third-party risk management into your offering, you can help clients meet regulatory requirements and position your business as a trusted advisor in an increasingly complex threat landscape.
Now is the time for MSPs to take the first step. Begin by exploring the right platforms and piloting TPRM with select clients to showcase value quickly. As you expand, highlight the efficiency, profitability, and peace of mind these services bring.
Cynomi’s TPRM module is available now as an add-on to the vCISO platform. Use it and start delivering scalable, high-margin vendor risk management today.
Ready to get started?
✅Register for our upcoming TPRM webinar and learn how leading MSPs are turning third-party risk management into a scalable, high-margin service
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