In the world of vendor risk management, there are several categories of vendor risk to consider, such as strategic, compliance, cyber, financial, reputational and more. Today, we will focus on vendor operational risk and highlight some of the issues that can arise if this risk isn’t managed appropriately.
First, we should define operational risk as the risks an organization faces while running its day-to-day business activities. Operational risk typically reflects the failure of processes, procedures, people and systems. Furthermore, operational risk has two dimensions, internal and external.