Security & Compliance

  • 7 min read

Mitigate SaaS Vendor Risks with Zluri

Chaithanya Yambari

5th December, 2021

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It's not enough to evaluate vendors at the time of onboarding. Continuous monitoring helps you keep a tab on your spending and the safety and protection of sensitive data. 

Proactive vendor risk identification helps you train your teams to follow best practices to prevent unintentional breaches from spiraling into compliance risks. 

Today, an enterprise outsources several business activities to vendors, but how often does one realize it does not include outsourcing the compliance responsibility. Therefore, the onus is on your organization to practice due diligence and monitoring to avoid compliance penalties, damages, and costly investigations.

Just imagine this hypothetical situation: Your enterprise relies on a third-party cloud service to store your mobile application data. If any disruption happens in the cloud, your customers can't access their data. From such disruption of services to data breaches, problems at your vendor's end can affect your business adversely.

SolarWinds cyberattack and the Colonial Pipeline attack are two examples of data breaches caused by third-party vendors, which impacted millions of customers. 

These days, enterprises have to rely heavily on SaaS vendors. For instance, a business with 250 employees uses close to 500 SaaS apps. 

While there are many risks associated with SaaS vendors, they can be categorized broadly into compliance, security, reputational, financial, operational, and strategic risk. Almost all of these stem from not having visibility into vendor networks.

In this article, we will mainly discuss compliance and security risks.

Compliance and Security Risks: Being Compliant Is Like Eating Your Cake and Having It Too

Being proactive ensures you from the costly repercussions of being non-compliant. As in the adage, prevention is better than cure applies here, too. If you know the risks or anticipate the perils associated with vendor management, you can manage them proactively. Understanding the risk allows organizations to assess third-party risks, strategize, and take measures to address all threats.

Often, enterprises fail to manage vendor risk and non-compliance issues for many reasons. Some of the common reasons are increasingly complex vendor networks, a traditional approach to vendor management, and a lack of structured vendor monitoring processes. 

Non-compliance with privacy rules can cause fines and penalties from the regulatory agencies. The severity of non-compliance determines the fines. For instance, GDPR fines can cost an organization up to 4% of its revenue.

Non-compliance with regulatory requirements costs enterprises billions of dollars. In most cases, it costs more than the cost of compliance. For example, a single non-compliance occurrence costs organizations on average $4 million, while the average cost for compliance like GDPR or HIPPA is a fraction of the cost. 

It means you can save money and be compliant too. In short, being compliant is like eating your cake and having it too.

The losses, however, are not confined to fines and penalties. Non-compliant enterprises face significant security risks, productivity loss, reputational damage, among other issues. Given the consequences of non-compliance, it is prudent to take dynamic steps.

Businesses are obliged by law to follow specific privacy and data protection standards to lessen the chances of a data leak. Any failure will result in legal ramifications, including fines, penalties, and lawsuits.

When a data breach occurs because of non-compliance, the consequences go beyond the fines and penalties. When affected by a data breach, there are high chances that customers, employees, vendors, and other stakeholders pursue legal action and file a lawsuit. 

It's not easy to recover from a security breach due to non-compliance. Even after paying fines and penalties, businesses may be subjected to costly regulatory audits for years in some cases. In the most severe cases of non-compliance, a company's owners, directors, and executives may be prosecuted for criminal negligence.

In many cases, the business ramifications of non-compliance may not have a direct monetary cost, but the damage might be extensive due to its cascading effect. Customers may lose faith in your business and may shift to competition, and the heavy expenditure incurred for fines and lawsuits might affect your business development plans. In addition, when the public learns of non-compliance or security breaches, the organization's reputation could suffer long-term damage.

Sometimes, being non-compliant may force businesses to stop operations temporarily. The revenue loss arising out of it may not be easy to manage, and businesses may find it challenging to recover from such a situation entirely. 

How To Ensure Compliance at Your Organization

The first step in ensuring compliance is the development of appropriate policies to control data and other security measures. Moreover, compliance is not a one-time task. Organizations must continually assess the regulatory requirements that govern their operations and bridge any gaps in compliance.

Cyber threats are growing exponentially, and you need to continuously monitor your vendor's overall defense against cyber-attacks. One such way is to check their compliance status. While checking each vendor's compliance status one by one may be very time-consuming and challenging, Zluri makes it easy. It shows the compliance and other data to make helpful decisions on your vendors.

But before you evaluate your vendor's risk, you have to identify your organization's dependence on each vendor. While your organization may have tens of thousands of vendors, not each one is equal—not all of them may impact your revenue directly. Identifying the vendors who are directly responsible for revenue is critical to avoid financial risk arising out of vendors. 

Similarly, if high costs are not addressed, they can affect your company's growth and lead to debt. To prevent or contain high costs, you need to conduct periodic audits so that the vendor's spending aligns with the terms outlined in the IT contract.  

Operational risk is another area when vendors cannot provide their services or shut down the processes. Such risks can hamper your organization's operations. Therefore, it is crucial to have a business continuity plan for your enterprise to ensure the seamless running of your operations.

How Zluri Can Help

A solid vendor risk management (VRM) program helps companies anticipate inherent risks and take proactive measures. But many enterprises follow VRM programs the traditional way for SaaS providers. 

While they focus on managing vendor risk at vendor selection, they lack processes in place for continuous vendor monitoring. With dozens of new SaaS apps being developed and released daily, it's not easy to manage SaaS vendors. SaaS management platforms, such as Zluri, can significantly help your enterprise. 

Zluri automates and simplifies vendor risk assessments and management for organizations. Let's see how Zluri can help you with vendor risk management. 

Increased visibility for SaaS purchases: It's not difficult for employees working with organizations to sign up for new SaaS products. While it helps to complete work fast and efficiently, it also prompts purchasers to buy services and products without much deliberation leading to SaaS sprawl. 

Such purchases add to the cost of the business and may become redundant, as there are high chances that they may go for purchasing another tool.

When your teams have company credit cards, keep an eye on their subscriptions. With Zluri's, these accumulating software costs will no longer go unmanaged. 

Zluri provides you with increased visibility of all of your SaaS purchases. It helps you reduce spending, manage your accounts payable, subscriptions, and employee expense information, all in one place.

Our discovery engine is the best in the market. It follows a five-level discovery to find all the SaaS used in the company with near 100% accuracy. First, it collects data from SSOs such as Okta, OneLogin, Google Workspace, Microsoft AD, etc. Then, it connects through and collects data from expense and finance management systems like Xero, Quickbooks, etc. This gives us all the list of the apps signed up by employees. 

Third, what makes us separate from other tools is our direct integrations with over 400+ apps—so that you are not limited to the discovery of apps. Our direct integration with apps gives you usage data to optimize spend and take data-driven decisions regarding the termination/renewal of apps.

Then, we can also collect data from browser extensions and desktop agents. Note that these two options are optional and not required for Zluri to function. 

These methods make Zluri the best discovery solution with over 200,000 apps in the app library. 

Improved security: Zluri centralizes all of your SaaS applications in one place. You can quickly figure out who or which department is making most of your software purchases with it. You can train such teams on best practices to safeguard your sensitive data. 

Proper de-provisioning of users from SaaS apps is a must for secure offboarding. Companies today don't know if ex-employees still access the apps. IT teams using traditional ways like revoking access from SSO often find themselves in trouble when something goes wrong. 

Zluri, on the other hand, does proper de-provisioning in 4 steps: to begin with, Zluri (us) revokes the authentication from all the devices. So, if a user is signed in on three devices, the user can't access the app from any of these devices.

Then, we transfer the data to another user or take a backup. So, no data loss happens even though revoking the access is easy from the admin perspective. Further, Zluri returns to the application and removes the user because all the data has already been transferred. Finally, we remove the SSO as well.

Shadow IT: Enterprises have been fighting the menace of shadow IT like never before. Many employees work around their company's IT policies to get their job done fast. The growth of cloud-based applications has also given rise to the widespread adoption of shadow IT along with the work-from-home scenario.

Today, SaaS tools, such as Dropbox, Google Docs, Slack, or Skype, are available with the click of a button. An employee may start using a file-sharing option not permitted by the organization's IT. Soon, many others in his team may follow a similar path. 

The issue with shadow IT is that since the organization's IT is not aware of the application, they won't support it and put its security at high risk. When employees email work documents to their personal emails to work from home, it exposes the data to networks beyond the IT's monitoring reach. 

Fortunately, tools like Zluri can help with shadow IT governance by detecting shadow IT and helping streamline the purchases, thus reducing the chances of security breaches and eliminating multiple purchases by different departments. 

Renewal/ Termination policies: When your enterprise lacks a vendor relations process and visibility into your software and tools, you may end up goofing up on the renewals. Even if you don't want to renew some applications or software, you should utilize the termination policy so that your data /project is safe and there are no challenges in the safety of your documents and data.  

It helps you track upcoming renewals for software tools if you plan to continue.  It also shows the pricing to take a call based on your budget, utilization, and criticality. Zluri helps you make informed decisions on the renewal or termination of software and applications. Zluri lets you take backup to ensure you don't lose your data when you plan to terminate the renewal. 

SaaS Vendor Risks are Too High to be Ignored

Today, enterprises have progressed to having thousands of vendors from having a handful of vendors. Simultaneously, the regulatory environments are changing at great speed. Hence, enterprises are under tremendous pressure to ensure that their vendors are compliant to suit the regulatory and compliance requirements.

With SaaS vendor management, you can track usage, implement governance, become proactive, make data-based decisions with renewals, and keep monitoring the inventories of all your vendors. Zluri will help you stay on top of your SaaS purchases and allow continuous improvements and constant vendor monitoring to mitigate the risks.
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About the author

Chaithanya Yambari

Chaithanya Yambari is one of the co-founders of Zluri. A post-grad from BITS Pilani, he oversees the product and technology roadmap at Zluri. Before Zluri, he was part of the founding team at KNOLSKAPE, heading the engineering team.
An avid tech enthusiast, he is often found testing various softwares and smart devices or attending conferences to update his knowledge and expertise.

When not exuding his passion for technology, Chaithanya is an avid traveler, having traveled to over 28 countries across the globe already. Being professionally trained in baking, he spends his weekends trying to dabble a new recipe.