From ransomware disrupting city services to vendor failures impacting school operations, supply chain failures seem to be dominating the headlines lately. Naturally, whether your organization is in the Private or Public Sector, you’ll want to avoid attracting attention for the wrong reasons.
The best way to do that is to prioritize implementing best practices to safeguard critical vendors and services from cybersecurity risks and operational disruptions. In this guide, we’ll cover the NIST framework, how it applies to Public Sector organizations and how you can use NIST best practices to reduce risk and maintain public trust. Even private sector teams increasingly rely on NIST supply chain risk management practices when working with Government partners, especially across information technology environments.
Why Is Supply Chain Risk Management Important?
Managing supplier risk should be a fundamental part of any data-based businesses’ operations, but it’s all the more important for Public Sector organizations, whether that means Federal, State or Local services.
Why? Without clear practices for identifying, assessing and mitigating vendor and operational risk, you could expose your organization to a whole host of potential issues, including:
- Financial losses: Even nonprofit organizations depend on reliable financial backing from Governments and other entities. Those revenue streams can be endangered when an overlooked security risk becomes an operational blockage.
- Reputational damage: Eroded consumer trust can be as costly as any disruption in service or productivity. When your organization attracts the wrong kind of attention, like for suffering a data breach or failing to fulfill obligations, earning that trust back can be a difficult feat.
- Regulatory violations: In worst-case scenarios, failing to catch a supply chain risk before it becomes a major problem can lead to your organization falling afoul of relevant regulations and facing stiff consequences like fines or legal fees.
Learn more: Quick Guide: What is Operational Risk Management?
When Does an Organization Need a Supply Chain Risk Management Framework?
The purpose of using a risk management framework is to standardize the process of identifying, assessing and mitigating potential threats and vulnerabilities to your organization’s supply chain. If your organization’s ability to provide services, attract new users and secure funding would be severely impacted by a potential data breach or supply chain disruption, then you’d most likely benefit from using a framework to ensure consistent supplier security.
State, Local and education (SLED) entities are all the more likely to need a framework for regulating risk assessments and mitigation steps. Since the services provided by such entities are typically essential to a community, it’s that much more important that you take all the necessary actions to secure your supply chain and prevent service interruptions whenever possible.
What Is the NIST Risk Management Framework?
The National Institute of Standards and Technology (NIST) Risk Management Framework (RMF) is the go-to solution public service organizations have been using to mitigate vendor, technology and cybersecurity risks for the last decade. The result of a Federal task force established in 2014 under the Federal Information Security Modernization Act (FISMA), this framework for risk management processes can be used to set standards across Federal agencies and the organizations that work with them.
Today, the NIST framework is a main point of reference for any organization looking to implement a secure and reliable process for managing cybersecurity risks and other potential supply chain issues. The framework is a living document regularly updated to meet the latest challenges in the data privacy space.
Learn more: What is NIST RMF? Risk Management Framework
What Are the NIST Best Practices for Supply Chain Management?
The 2022 revision NIST SP 800-161 offers comprehensive guidelines for handling supply chain risks related to information and communications technology. These recommendations are divided into three main categories: foundational practices, sustaining practices and enhancing practices.
Think of these categories as sequential stages. You’ll need to implement foundational practices before you move on to sustaining practices, and sustaining must come before enhancing.
1. Foundational Practices: Establishing a Process for Supply Chain Risk Management
Some of the best practices recommended in NIST SP 800-161 for creating a foundation for a supply chain risk management process include:
- Dedicate a multidisciplinary team to your vendor and technology risk oversight
- Create and fill dedicated roles for risk oversight procedures
- Gain support from senior leadership to ensure adequate resources
- Implement a governance hierarchy and a governance structure
- Codify processes for identifying and assessing the criticality of your suppliers, products and services and conducting formal risk assessments, preferably using FIPS 199 impact levels
- Establish internal checks and balances for compliance
- Integrate risk oversight practices into your policies regarding supplier selection
- Raise internal awareness and understanding of the importance of supply chain risk management
- Create processes and practices for quality control and consistent development practices
Learn more: Guide: Risk Management Strategies To Future-Proof Your Organization
2. Sustaining Practices: Improving the Efficacy of Your Supply Chain Risk Management
Some of the best practices recommended in NIST SP 800-161 for building on your foundational risk management processes include:
- Implement third-party risk assessments
- Create a program for monitoring suppliers
- Define and quantify levels of acceptable risk
- Determine key supplier risk metrics and create procedures for tracking and reporting them
- Formalize your information sharing procedures
- Establish a training program for vendor risk practices
- Integrate supply chain risk management practices into your supplier contracts
- Solicit supplier participation in contingency planning and incident response
- Collaborate with suppliers to address risk factors
- Expand supply chain risk management training to all applicable roles across your organization
Learn more: How to Mitigate Third-Party Risks in Your Supply Chain
3. Enhancing Practices: Predicting Supply Chain Issues Before They Impact Your Business
Some of the best practices recommended in NIST SP 800-161 for building a structured supply chain risk management program include:
- Codify processes for quantitative risk analysis, optimize risk response resources and measure your return on investment
- Use insights gained over time to identify key risk factors and create predictive strategies to address risks before they arise
- Introduce automation into your cybersecurity oversight procedures whenever possible
- Join a community of practice where you can improve your cybersecurity risk management practices
Learn more: 5 Reasons Your Company Should Automate Third-Party Risk Management – Onspring
Organizations implementing a supply chain risk management program often reference several complementary NIST publications, including:
- NIST Special Publication (SP) 800-39
- NIST SP 800-30r.1
- Federal Information Processing Standards (FIPS) Publication 199
- NIST SP 800-53
How to Future-Proof Your Vendor Risk Program
It’s impossible to overstate the importance of recognizing and addressing risk factors in your supply chain when your organization is responsible for providing or securing local and state services. The best guide to follow when establishing or enhancing your supplier risk program is the NIST Risk Management Framework. A structured platform can help Public Sector teams manage these challenges more effectively while taking advantage of AI advancements without exposing their organizations to unnecessary risk.
See how Onspring’s platform supports these efforts and get a demo today.
