Best Practices for Change Management in Third-Party Risk Management (TPRM)

Organizations today are navigating a volatile mix of shifting economic policies, evolving regulations, and daily disruptions. These forces create new risks that third-party risk management (TPRM) programs must address quickly and effectively.

The best way to stay ahead? A strong change management strategy.

Change management is a structured, repeatable process for implementing organizational shifts with minimal disruption. It ensures smooth transitions while maintaining business continuity and operational stability. When integrated into TPRM, change management helps organizations adapt quickly — without reinventing the wheel every time change is needed.

Why Change Management is Needed in TPRM

Change is constant, and TPRM programs must be flexible and responsive to keep up.

Shifts in strategic direction, cost-cutting measures, mergers, or acquisitions can all impact an organization’s third-party relationships. TPRM processes may need updates after an incident, or new sustainability, diversity, or ethics standards might prompt changes in due diligence. A revised risk appetite or new regulatory requirements may also necessitate adjustments to TPRM policies and practices.

Let’s explore two critical areas where change management is essential for TPRM today:

Regulatory priorities

While the Trump administration is focused on deregulation, other countries continue to move forward with stringent requirements. The European Union’s (EU) Digital Operational Resilience Act (DORA) took effect, and the United Kingdom is focused on operational resilience in third-party relationships.

Related: What Is Regulatory Change Management at Financial Institutions?

Organizations operating in the U.S. must also navigate a complex landscape of state-specific data privacy regulations and enforcement actions. As more states implement their own data privacy laws, organizations must stay informed of varying requirements and compliance obligations. Additionally, some states may ramp up enforcement efforts in response to reduced federal oversight, further emphasizing the need for a proactive compliance strategy.

Your TPRM program must be able to navigate regulatory shifts and ensure your third-party vendors are doing the same. 

Related: Third-Party Risk Management Guidance and Regulations

Economic policies

New tariffs imposed by countries such as the U.S., China, Mexico, and Canada can disrupt global supply chains and drive-up operational costs.

As your organization assesses economic shifts and prepares for their impact, your third parties are likely conducting their own evaluations. This may require changes in your TPRM processes, like increased financial monitoring or contract management. Your organization may need to respond to increases in pricing or delays in products or services. 

By using change management processes in TPRM, you’ll be better prepared to respond quickly to protect your organization and remain resilient. 

How Change Management and TPRM Intersect

Change management ensures organizations can effectively navigate and implement changes to processes, systems, or strategies in response to external and internal changes.

TPRM is the process of identifying, assessing, mitigating, and monitoring the third-party risks in your organization’s external relationships. This practice must remain consistent to be responsive to changing and emerging risks. 

Change management supports effective TPRM because it ensures organizations can adapt processes to respond to changing environments. For example, a shift in the economic landscape may require increased third-party monitoring or changing regulatory focuses may require updates to TPRM activities. 

As TPRM programs face new changes and pressures, change management ensures the program evaluates, learns, and adjusts. 

Related: The Importance of Third-Party Risk Management in a Difficult Economy

Implementing and Improving Change Management Processes in TPRM

1. Identify key changes – Identify the key factors driving change within your organization. Does a fluctuating economy impact your global supply chain? Is your organization heavily regulated and changes in the regulatory environment could impact your TPRM program?
   
   Knowing where change comes from helps your organization know where to monitor and adapt your program. For instance, you might regularly track regulatory updates, market trends, and/or economic indicators. 
2. Impact analysis – Once a meaningful change is identified, assess the impact on products, systems, compliance, and vendor relationships to figure out what adjustments must be made across your organization (and within your TPRM program). For example, changes in data privacy laws may impact your TPRM program by requiring an updated risk assessment, revision of third-party contracts, or an adjustment to breach notification timelines.
   
   Impact analysis is most effective when conducted by a cross-functional team with representation from multiple departments. This ensures all aspects of risk (including third-party risk) are considered when implementing changes.
3. Assign responsibilities – With a clear understanding of the change, assign responsibilities. The right teams — whether compliance, IT, operations, TPRM, or some other function — should own specific tasks.  For example, changes in data privacy laws might require updates to third-party contracts, which would involve the legal team.
4. Draft an action plan – A well-defined action plan provides a clear roadmap for implementation, ensuring a structured and efficient transition. It identifies what needs to change (ex: policies, risk assessments, vendor oversight, or technology updates), assigns responsibility for key tasks, details how updates will be shared, and address training needs for employees and vendors. Timelines and key milestones should keep the process on track. The plan should also include testing and monitoring to ensure a smooth rollout and to identify and make adjustments as needed. Document all changes and report on progress.
5. Ongoing communication – Communication is critical throughout the change management process. Regular updates to leadership and key stakeholders ensure alignment, surface challenges early, and keep projects on track. Develop a communication plan that lays out how changes to your TPRM program will be announced and who should be involved.
6. Conduct a post-change review – After implementation, a post-change review captures lessons learned to enhance future responses. Think about what worked, what didn’t, and what you could do better next time.

A flexible, agile third-party risk management program relies on strong change management processes. By integrating these processes into your TPRM activities, your organization can adapt swiftly to evolving business challenges and emerging risks.

What does an effective third-party risk management framework look like? Learn more in this eBook.