Vendor Contracts Are Key to Third-Party Risk Management

Sarah Hemmersbach of Mitratech writes that vendor contract management has evolved from an administrative function to a cornerstone of enterprise risk control. For legal ops teams, aligning vendor contracts with third-party risk management (TPRM) can determine whether compliance is compromised.

Every third-party contract carries risk, from data security lapses to performance failures. Regulations and laws such as the General Data Protection Regulation make organizations accountable for how vendors handle sensitive data, emphasizing the need for precise, enforceable contract terms. Integrating contract management into TPRM frameworks provides a comprehensive view of risk exposure across the vendor lifecycle, from onboarding to termination.

When contracts are treated as operational risk controls, they become tools for governance. Defined workflows for sourcing, redlining, approvals, and renewals establish transparency and accountability, while centralized repositories ensure secure access and auditable histories. This structure mitigates risks associated with data handling, performance obligations, and regulatory compliance.

Unifying contract management with TPRM also promotes collaboration across legal, procurement, and security teams. A shared system eliminates version confusion, prevents missed renewals, and aligns contractual obligations with organizational policies. The result is not just efficiency; it’s resilience.

Automation and centralization further simplify and improve the process. Tracking tasks, deadlines, and performance metrics within a unified framework helps organizations respond faster to issues and maintain compliance with confidence. 

As vendor ecosystems grow more complex, linking vendor contracts and third-party risk management transforms a compliance necessity into a proactive defense against operational and reputational risk.