One of the key objectives of a TPRM program is to identify and mitigate the risks posed by third parties throughout the relationship life cycle. Therefore, measuring the operational performance of implementing a TPRM program requires tracking the effectiveness and efficiency of the risk management processes and activities. Among the four examples given, calculating the average time to remediate identified corrective actions is the most likely to provide meaningful metrics for this purpose. This metric indicates how quickly and consistently the organization and its third parties can resolve the issues and gaps that are discovered during the risk assessment and monitoring phases. It also reflects the level of collaboration and communication between the parties, as well as the alignment of expectations and standards. A lower average time to remediate implies a higher operational performance of the TPRM program, as it demonstrates a proactive and responsive approach to risk management12.
The other three examples are less likely to provide meaningful metrics for measuring the operational performance of implementing a TPRM program, as they do not directly measure the outcomes or impacts of the risk management activities. Logging the number of exceptions to existing due diligence standards may indicate the level of compliance and consistency of the TPRM program, but it does not show how the exceptions are handled or justified. Measuring the time spent by resources for task and corrective action plan completion may indicate the level of effort and resource allocation of the TPRM program, but it does not show how the tasks and plans contribute to the risk reduction or mitigation. Tracking the number of outstanding findings may indicate the level of exposure and vulnerability of the TPRM program, but it does not show how the findings are prioritized or addressed. References:
* 1: 15 KPIs & Metrics to Measure the Success of Your TPRM Program | UpGuard Blog
* 2: Third-Party Risk Management Reporting: What You Need to Know - Venminder