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With risks ranging from supply chain disruption to regulatory non-compliance, third-party risk management (TPRM) software is a core procurement tool of today.  

Manual spreadsheets and fragmented systems simply can’t keep up, but how do you choose the ideal TPRM solution?

This guide walks you through key challenges and software use cases, helping your organization build resilience in the face of ever-evolving risks.

What TPRM Challenges Do Procurement Teams Face?

While TPRM efforts are impeded by insufficient data, the more common struggle is having critical supplier information scattered across systems and formats.

Data silos make it nearly impossible to see the big picture, and the impact is felt across organizations.

According to Workday, nearly two-thirds of IT leaders admit to challenges with partly or completely isolated data.

Illustration: Veridion / Data: Workday

For procurement teams, this typically translates to supplier records being split between ERPs, spreadsheets, and contract systems, leading to duplicate entries and stale data. 

The persistence of these blind spots extends beyond the sheer volume of data, with weak governance frameworks keeping business functions siloed and blurring the lines of risk ownership. 

But even if teams succeed in reconciling siloed data, they face another pressing obstacle: constantly shifting regulations.

Compliance rules differ widely by industry and region, and they change at a pace few procurement teams can truly match. 

The number of ESG regulations has increased by 155% in the last decade, so it’s no wonder that the regulatory and compliance risk rank among the top concerns for Chief Risk Officers.

EY reports an increase from 22% in 2024 to 29% in 2025, making regulatory and compliance risk the third-most mentioned CRO concern for the year ahead.

Illustration: Veridion / Data: EY

And the stakes are hardly theoretical, as illustrated by non-compliance cases filling the headlines. 

For instance, the Bank of England fined Mastercard’s Vocalink £16 million for failing to fix known risk management gaps despite being explicitly instructed to do so.

Source: Reuters

This incident highlights how overlooking or delaying the implementation of regulatory expectations can lead to costly penalties and reputational damage. 

Plus, Vocalink was notified in advance but ultimately failed to act, while most organizations will never be afforded that luxury.

That’s partly because navigating complex supply chains can easily divert attention from regulatory updates.

For enterprises managing thousands of suppliers across regions, problems can compound quickly, which is why supply chain visibility remains one of procurement’s most urgent concerns. 

An Economist Impact report found that 46% of procurement leaders identify it as a top risk priority. 

But acting on this reality is an entirely different thing.

Research by Supply Wisdom shows that 51% of procurement professionals admit they don’t have a complete supplier inventory list.

Illustration: Veridion / Data: Supply Wisdom

Even more worryingly, 13% lack one altogether.

Without even a baseline inventory, no risk management framework can function. 

Supply Wisdom’s CEO, Jenna Wells, stresses that this fundamental gap prevents any meaningful monitoring, exposing organizations to unseen vulnerabilities.

Illustration: Veridion / Quote: Supply Wisdom

On the other hand, companies that consolidate data and use supplier intelligence for focused assessments are already streamlining lifecycle management and staying ahead of hidden risks.

And this is precisely why dedicated TPRM software becomes indispensable.

How TPRM Software Solves These Challenges

What makes TPRM software ideal for addressing the aforementioned challenges boils down to centralization and real-time risk detection and monitoring. 

Instead of scattered files or siloed teams, these platforms consolidate vendor profiles so that all risk, compliance, and performance data lives in one place.

Additionally, they help you manage risks you can’t always see. 

An Economist Group survey of over 500 C-level managers across APAC shows that blind spots in third-party relationships affect several business areas, mostly revenue and financial stability.

Illustration: Veridion / Data: The Economist Group

These numbers show why hidden risks are so dangerous. 

Luckily, TPRM platforms exist to close those gaps.

Some solutions cover the entire vendor lifecycle and every risk domain, while others specialize in narrower use cases, such as financial health or cybersecurity.

For supply chain leaders, that scope matters a lot, especially considering that software enables you to track over a dozen risk factors.

This includes metrics like financial stability, ESG compliance, corruption, and operational continuity.

Source: Veridion

While the list looks overwhelming, most software distills these into two practical functions.

First up, we have early risk detection.

TPRM software enables early detection of high-risk vendors through automated scoring and alerts. 

The most important thing is that technology gives you a high degree of control over how you’ll be conducting these risk assessments.

For example, Venminder lets you define thresholds, risk levels, and assessment timing so you’re not blindsided by sudden changes.

Source: Venminder

Risk profiles don’t have to be generic either. 

For instance, UpGuard’s platform specializes in dark web monitoring and cybersecurity risk detection.

Meanwhile, BeyondTrust provides free assessment services, scanning identity environments, showing connected accounts, and potential exposure.

Source: BeyondTrust

But this growing reliance on automation isn’t limited to risk scoring. 

EY research shows 23% of institutions already use automation in risk management, with 44% actively exploring potential use cases.

Illustration: Veridion / Data: EY

In addition to automating vendor monitoring, the second critical function of TPRM tools has to do with easing the burden of regulatory reporting and audits.

Rules evolve constantly, from data privacy to ESG standards. 

Sophie Graham, Chief Sustainability Officer at IFS, an industrial AI software provider, offers the uncertain EU Omnibus Bill as an example.

She notes that agile, forward-looking organizations are the ones that have the advantage, no matter what happens.

Illustration: Veridion / Quote: Sustainability Magazine

That’s exactly what TPRM software enables. 

By automating documentation, audit trails, and reporting, organizations stay agile instead of scrambling for solutions once disruption has already occurred.

Platforms like Bitsight provide secure profiles with questionnaires and certifications, allowing vendors to quickly share complete documentation and stay up to speed with pending processes.

Source: Bitsight

Needless to say, even automation at the lowest level can cut assessment times dramatically.

With these two critical functions in mind, the next question is: which features should you prioritize when choosing a TPRM solution?

Evaluating TPRM Software: What to Look For

When evaluating TPRM software, three factors consistently separate average tools from those that make a difference: data accuracy, integration capabilities, and reporting capabilities.

Data Accuracy

High-quality, reliable data ensures that risk scores, compliance checks, and alerts reflect the true state of your suppliers. 

Without it, procurement teams risk basing decisions on outdated or incomplete information, which can lead to operational disruptions or even regulatory penalties.

The challenge is that supplier data changes constantly, making accuracy difficult to maintain. 

That’s why the best solutions prioritize ongoing data enrichment and transparency over static records.

Practical telltale signs of strong data accuracy include:

• Update frequency (daily or weekly refreshes vs. quarterly)
• Continuous enrichment (automated updates through AI and MDM tools)
• Transparent sourcing (clear visibility into where the data comes from)

Instead of procurement teams manually filling gaps, modern master data management (MDM) systems continuously update supplier profiles in the background. 

This doesn’t just reduce manual work, but ensures that risk scores and alerts evolve with reality.

As such, it’s no surprise that 27% of CPOs now rank data enrichment among the top digitization strategies to improve procurement efficiency.

Illustration: Veridion / Data: Tealbook

To sum up, solutions that meet these standards consistently are the ones worth shortlisting.

Integration Capabilities

Naturally, the best TPRM software doesn’t exist in isolation. 

It needs to integrate seamlessly with the broader technology stack, including ERP, procurement, and supply chain management systems. 

This is what ensures vendor risk data doesn’t remain siloed but flows automatically into daily workflows, so that it can actually inform decisions. 

Smooth integration also minimizes manual entry, reducing errors and saving procurement teams valuable time.

When assessing integration, look closely at how flexible and future-proof the system is. 

Practical signs of strong integration capabilities include:

• Native APIs that allow real-time data exchange, not just occasional exports.
• Plug-and-play connectors with platforms like SAP, Coupa, or Oracle, which speed up deployment.
• Flexibility for custom workflows, ensuring the software can adapt as your organization grows.

First clues of multiple pathways offered are usually mentioned on the solution’s website. 

Here’s how this should look.

Source: Veridion

Be cautious of red flags. Some tools advertise “integration” but only offer one-way exports instead of true synchronization. 

Others may limit you to CSV uploads, which defeats the purpose of automation.

A useful step is scanning reviews on platforms like Capterra or G2. 

Users often flag recurring frustrations around setup, hidden costs for connectors, or slow API performance. 

If several reviews highlight integration headaches, that’s a clear signal to dig deeper before committing.

Reporting Capabilities

Reporting is where TPRM software proves its value. 

A strong platform should go beyond static spreadsheets, offering dashboards, automated alerts, and audit-ready reports that help procurement teams identify risks in real time. 

This not only strengthens day-to-day vendor oversight but also makes it easier to demonstrate compliance to regulators and internal stakeholders.

When evaluating reporting capabilities, focus on flexibility and ease of use. 

Some telltale signs of a robust system include:

• Configurable reports (tweaking templates) and customizable reports (building from scratch). 
• Scheduled reporting that can be automatically shared across teams, reducing bottlenecks.
• Intuitive filtering, allowing users to slice data by supplier industry, region, or ESG rating without IT intervention.
• Multi-jurisdiction compliance support, such as ESG disclosures, GDPR, and sanction lists.

An example: if you’re browsing supplier data, you should be able to quickly filter by industry or geography, rather than digging through static lists. 

Source: Veridion

That level of agility makes reporting useful instead of cumbersome.

So, in short, robustness, intuitiveness, and easy filtering are the key ingredients you need.

How Can Veridion Help?

Risk management quickly turns into a guessing game when third-party data is fragmented or outdated, but Veridion prevents that.

Our AI-powered data intelligence platform is purpose-built for ongoing risk management, eliminating uncertainty through a continuously refreshed database of company profiles.

Source: Veridion

A supplier that looked reliable yesterday can become a liability overnight. 

That’s why Veridion’s AI bots scour multiple sources of information to enable real-time enrichment and weekly monitoring.

With 134M+ suppliers, 220+ data attributes, and 99% deduplication, procurement teams gain a trustworthy foundation for monitoring exposure across their supply base.

Source: Veridion

In other words, if a company has a digital footprint, Veridion can surface it.

Automated alerts and key TPRM insights are delivered without the inevitable lag of manual reviews. 

Keep in mind that the broad coverage doesn’t come at the expense of depth or speed.

By using Veridion’s Match & Enrich API, procurement teams can retrieve 95% of required TPRM data points in just 1.5 seconds.

Source: Veridion

This means you can say goodbye to stale information and start validating vendors or enriching profiles on demand.

Here is just a glimpse of some of the essential TPRM data points. 

Source: Veridion

The platform’s intuitive interface streamlines company-wide adoption further.

The dashboard supports natural language queries, offers multiple enrichment types, and displays essential stats at a glance.

Source: Veridion

It’s not data for the sake of data. You’re getting insights you can act on.

Instead of a reactive cleanup, procurement teams can answer key questions across multiple risk categories:

FOCI (Foreign Ownership, Control, or Influence)	Does this vendor have hidden foreign ties?
Regional Risk	Will geopolitical changes affect operations?
Operating Risk	Does the supplier have the capacity, processes, and systems to meet commitments?
Supply Chain Risk	Is this vendor dependent on fragile suppliers or logistics networks?
Financial Health Risk	Is this partner financially stable long-term?
Product Risk	Are the products compliant, safe, and aligned with required standards?
ESG Risk	Will this supplier expose us to regulatory or reputational damage?

By structuring supplier data into these categories, Veridion transforms generic records into an early-warning system for procurement leaders. 

The result is a risk-first TPRM system that’s as fast as it is actionable. 

Conclusion 

No single platform can remove third-party risk entirely, but the right TPRM software will transform how you anticipate, measure, and respond to it.

With procurement under pressure to cut costs while ensuring both resilience and speed, managing third parties requires continuous effort and discipline.

Fortunately, modern TPRM solutions make this easier. They automate workflows, integrate with existing systems, and deliver accurate reporting that drives data-based decisions. 

Begin improving your third-party risk management program today by benchmarking your current tools against these capabilities. 

Adjust where necessary, and you’re bound to see results.