Why the CrowdStrike Failure Highlights the Need for Digitial Resiliency
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Digital Transformation, Third Party Risk Management, Contract and vendor management, Cyber health
Shannon SmithJul 23, 2024 9:00:24 AM
Crowdstrike, a leading cybersecurity firm trusted by organisations in regulated industries for endpoint security and cyber attack response services, recently experienced a significant failure that caused chaos across the globe.
Its critical software update malfunctioned, causing widespread operational disruptions and the blue screen of death for its clients and their end users.
The global outage, which saw hospitals, airlines, and banks unable to access their systems, has underscored the urgent need for digital resilience throughout the supply chain.
For legal and procurement professionals, the implications of this global cyber failure are clear: relying on a single vendor is a double-edged sword.
While it may simplify procurement processes and foster strong vendor relationships, it also creates a single point of failure. When that vendor faces a security breach, technical failure, or other disruptions, your business could face regulatory non-compliance, financial loss, and reputational damage.
Understanding the criticality of your vendors and the level of risk they pose to your operations is crucial for achieving digital resilience and robust business protection.
Digital resilience is a business’s ability to predict, withstand and recover from compromises on its digital infrastructure, including cyber outages, attacks, and threats. As a result of globalisation, interconnected supply chains, increasing cyber intelligence, and complex IT environments, it can be hard to achieve.
Digital resilience is a strategic initiative for Legal and Procurement teams as it enhances risk management, ensures regulatory compliance, protects sensitive data, maintains operational continuity, and builds trust and reputation with customers.
By prioritising this work, these teams can better manage vendors and contracts, safeguarding the organisation’s interests in an increasingly interconnected and digital world.
If your business doesn’t prioritise digital resiliency, the failure of a critical IT services vendor, such as Crowdstrike, will leave it exposed to:
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The Crowdstrike outage is a warning sign because it highlights the vulnerabilities and risks associated with relying heavily on a single vendor for critical cybersecurity services.
It shows how even leading security providers can experience failures, causing significant operational disruptions, exposing security weaknesses, and increasing the risk of non-compliance with regulatory standards.
If the Crowdstrike outage had been a targeted cyberattack rather than an update failure, critical data could have been encrypted for ransom, resulting in extended downtimes, severe financial losses, and the theft of sensitive data or intellectual property.
Manual risk management processes are no longer sufficient to keep pace with the evolving threat landscape. Automation is critical in effectively managing third-party risks, providing a scalable and efficient way to ensure continuous compliance and security.
Manual vendor management processes are slow, error-prone, and inefficient, making it difficult for businesses to build digital resilience. The time-consuming nature of manual tasks leads to delays in onboarding, risk assessments, and incident responses, leaving companies vulnerable to disruptions.
At Gatekeeper, we know that true digital resilience can only be achieved when it's baked into your end-to-end vendor, contract, and third-party management processes. Those processes need to be standardised, streamlined, and automated.
Our Vendor and Contract Lifecycle Management platform is designed to give you total visibility of your vendors and third parties, complete control of processes including due diligence, and the ability to safeguard your business’s compliance.
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Automating your vendor risk management processes, and building digital resilience with Gatekeeper, looks like this:
The Crowdstrike outage is a stark reminder of the critical importance of digital resilience and the risks associated with relying heavily on a single vendor for cybersecurity services. While this incident was a genuine mistake rather than a targeted attack, it highlighted the vulnerabilities that can arise from such dependencies.
Legal and procurement teams must take proactive steps to assess and mitigate risks, understand their vendor’s risk appetite, and develop comprehensive incident response plans. Embracing vendor and contract management software that offers third-party monitoring is essential for timely risk detection and mitigation.
By prioritising these measures, businesses can better protect themselves against disruptions, safeguard sensitive data, and maintain compliance with regulatory standards.
If you're ready to build your digital resilience, speak to one of our specialists about how Gatekeeper can help.
Shannon Smith bridges the gap between expert knowledge and practical VCLM application. Through her extensive writing, and years within the industry, she has become a trusted resource for Procurement and Legal professionals seeking to navigate the ever-changing landscape of vendor management, contract management and third-party risk management.
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