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PUBLISHED! Develop Contingency Plans for Your Critical Suppliers, or Risk Business Disruption

by Roberta J. Witty  |  May 2, 2016  |  Comments Off on PUBLISHED! Develop Contingency Plans for Your Critical Suppliers, or Risk Business Disruption

Develop Contingency Plans for Your Critical Suppliers, or Risk Business Disruption
29 April 2016 | ID: G00292751
Christopher Ambrose | Roberta J. Witty | Gayla Sullivan

Failure to create contingency plans for the loss of suppliers that support critical business processes or systems can result in significant business disruptions. Vendor risk management leaders must ensure that contingency plans and exit strategies exist, and can be acted on if needed.

Key Challenges

  • Increased reliance on cloud services and outsourcing, and the use of external service providers for business-critical processes, leaves organizations vulnerable to a wide range of unknown single points of failure. Few organizations, however, continually monitor the significant BCM risks that some suppliers expose them to, beyond the performance of an initial due diligence.
  • The real potential that suppliers could cease operations and leave customers scurrying to find replacement services illustrates the disruption to business that these suppliers can have on their clients’ day-to-day operations. Despite the risk, many organizations have not developed exit plans or strategies to address these suppliers and their services.
  • Regulations are expanding, and regulatory agencies are increasing their audits of company vendor management programs, including the assessment of their business continuity plans. Many organizations have inadequate plans, increasing their risk of noncompliance, potential fines and business disruptions.


  • Implement and enforce a framework for assessing supplier risk, as well as developing contingency and exit plans that align to your organization’s BCM strategy.
  • Identify the suppliers and contracts that require contingency planning based on their business criticality and potential disruption.
  • Assess your critical suppliers’ recovery strategies and business continuity plans, and understand how they manage contingencies with their subcontractors and partners.
  • Develop contracts that include early termination triggers, actions and rights, as well as an actionable exit plan.

Additional Resources

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Category: advisory  bcm-process  business-continuity  disaster-recovery  it-disaster-recovery-management  roberta-witty  supplier-contingency  supplier-risk-management  

Roberta J. Witty
Research VP
11 years at Gartner
33 years IT industry

Roberta Witty is a research VP in Gartner Research, where she is part of the Compliance, Risk and Leadership group. Her primary area of focus is business continuity management and disaster recovery. Ms. Witty is the role specialty lead for… Read Full Bio

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