Vendor Management

  • 5 min read

4-Step Vendor Offboarding Checklist

Chaithanya Yambari

3rd November, 2022

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The process of vendor offboarding is as crucial as onboarding them. If you don't offboard properly, you may risk potential data loss, compliance, equipment, and more. Following a proper checklist will make the offboarding process effortless.

Many companies cannot completely remove contractors, consultants, or other third-party vendors from their systems. This gives the vendors access to IT environments and the organization's sensitive information. 

Further, it leaves security and privacy holes which can lead to possible data breaches, compliance violations, reputation damage, and lawsuits.

Third-party risks are a big part of vendor offboarding procedures. An organization that doesn't have a centralized database of vendors and a well-defined offboarding process leads to significant risks like third-party data breaches and compliance issues. 

To make the most out of your vendor relationship, it is essential to streamline your vendor lifecycle management process, including offboarding. A proper offboarding will improve transparency, reduce risk and prevent data breaches. Moreover, it will add value and growth to your organization. 

It is important to remember that vendor offboarding is just one part of the larger process of managing vendors. It can be hard to understand and reduce risk without a well-defined program for managing vendor risk.

Before taking any step, it is always better to look at the situation from a different perspective. The process might be quick and easy for small contracts, but a large and complex contract can lead to many risks (financial, reputational, security and compliance) for the organization.

When a contract ends or is terminated, the vendor's access to all the systems, data, and corporate infrastructure must also be removed. You will get time to prepare for vendor offboarding unless it ends due to a contract breach. Proper planning before the offboarding process will help you to smooth the transition and maintain a good vendor relationship. 

Having a centralized vendor management system can reduce the risk to your organization. It will help you regularly review and audit the database of the vendors and manage them.

This post will discuss the 4 important checklists for efficient vendor offboarding.

Vendor Offboarding Checklist for IT Teams

1. Don't wait for the contract to end

There can be many reasons for offboarding a vendor offboarding, for example, the end of the contract term, breach of contract conditions, or project completion. 

Whatever the reason, you should always be prepared for an early vendor termination. This way, you can keep your alternatives ready.  

When you plan early, you get ample time to search for the appropriate alternative and choose the right vendor that meets your requirement.

Before offboarding, you will have time to review the contract and each term mentioned in the contract to plan the process efficiently. 

Preparing or planning the strategies will make the process hassle-free. You will have requirements noted, and your team will be prepared to run things during termination in a better way.

Planning at an early stage will prevent any service disturbance or data issue. Additionally, it will leave the vendor relationship on better terms.

When you are prepared with the policies to follow before vendor termination, it will help you to run the activities smoothly without affecting regular business operations.

2. Manage your SaaS applications

Managing your data is a crucial step before vendor offboarding. As the data belongs to your organization, it is your responsibility to manage and protect it. 

It is your decision to analyze what data you need and what to do with it. Take time to understand how the data will impact your organization directly or indirectly.

If the data is essential and you need it, it is advisable to take a backup. This makes the transition more straightforward, and there will be no data loss.

Additionally, it is better to be on the same page with the vendor and make arrangements accordingly for data backup. So there will be no confusion or questions left from both parties.

Even if the data is not required and you are worried about a data breach, take a data backup and delete it from the system. In this case, the vendor will have no more access to the data.

The best practice is to take written consent to delete data from the vendor's system. As a result, the vendor cannot claim any data from your organization. 

Understanding the value of data and post-contract usage of data is essential. Once you know the consequences of data misuse, you can prepare the steps to prevent it.

3. Involve stakeholders from finance, security, and legal teams

Every stakeholder, including finance, security, and legal, has its importance in the vendor offboarding process.

There is a complete transition process during vendor offboarding. It includes final settlement, transfer of data, deletion of data, revoking access, and involvement of the legal team to check the compliance risk associated with vendor offboarding.

The involvement of stakeholders is essential to complete the entire offboarding process so that there is no threat to the organization. Starting with, the Finance department must close the accounts during the process, which involves final payment, documentation, vendor profile updating, etc. 

Also, the finance team will perform the post-contract analysis, where they will review the contract and understand if any deviation is required for the betterment of the organization.

Further, security issues are high if the data access is not revoked during the offboarding process. After the contract is terminated, if the vendor can access and misuse the data, there will be a security risk to the organization.

Finally, it is essential to review the compliance requirements like CCPA, GDPR, CMMC, etc., and ensure that the vendor termination process aligns with the legal obligations. Your legal stakeholder will be the point of contact for your contract terms.

When the vendor is terminated due to a data breach, the legal team can help you understand the contract in better terms and ensure any compliance risk is involved.

4. Revoke access from all your systems

During the contract, vendors are given various levels of access to systems like direct access to internal systems, VPNs, telecommunication systems, etc., to enhance the work collaboration. Keeping track of the systems and revoking all access while offboarding is essential.

It is still possible that vendors may have virtual or physical access to your sensitive data. In that case, the organization can have a security or compliance risk.

Moreover, revoking access to SaaS apps is necessary. It will help the organization view the number of active users and purchase the license accordingly. It will help you to avoid such unnecessary expenses and prevent your organization. 

Suppose the vendor was provided devices like laptops, mobiles, tablets, etc., for performing the contractual work. In that case, you should follow the proper process to ensure that all the devices have been gathered.

All the devices provided to the vendors and their returns should be documented. Also, document the device's condition or any missing parts/device.

Most organizations mainly focus on access to IT systems. But when any physical access is given to the vendor, it should be removed immediately after the contract's termination or end.

You will leave the organization vulnerable if the appropriate steps are not taken during the offboarding process. It is necessary to work with your physical security teams and revoke the physical access of the vendor.

Once the contract has expired or terminated, you should carefully look into your tracking system and revoke all the vendor's access. Also, document every system that has been reviewed and removed access.

Automate Vendor Offboarding Process with Zluri

Managing the vendor offboarding process manually is tedious. This includes giving or revoking access to the vendors, data backup, checking compliance, etc.

Manually noting down and managing the required vendor information in a spreadsheet may lead to higher chances of error. Therefore, using a tool like a SaaS management platform (SMP) will help you automate the complete journey of vendor offboarding. 

Zluri, a SaaS management platform, enables you to manage your SaaS vendors and their contracts and licenses. All your contracts are stored contextually with other vendors' information so that you can access them when required: during renewals, audits, termination, etc.

With Zluri's five discovery methods, we help you uncover all SaaS apps and their users. This gives you a clear picture of who all have access to these apps. At the time of vendor offboarding, you can revoke all access.

For example, the vendor can access 3 different applications: Slack, Grammarly, and Trello. While offboarding, Zluri will show you all the apps that the vendor has access to so that you can take the required actions to revoke all the access.

With Zluri, you can take data backup, which will help you retain your data for future purposes. Further, you can select multiple vendors from the vendor list and delete their profiles.

If the vendor continues to have access to data even after revoking access, Zluri will send you alerts that the vendor still has access to the data.

Implementation of Zluri will help you to streamline the vendor offboarding procedure. It has an automated vendor management system with all the required features like data backup, revoking access, removing vendor profiles, contracts, licenses, and more which will smoothen the process and manage the complete vendor lifecycle.

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.