ISO 27001 Vendor Management: Identify, Assess & Control Supplier Risk

Did you know that over 60% of data breaches involve third-party vendors? 

Every time you work with an external vendor, you’re giving them access to your systems, infrastructure, or data. Too much access, outdated contracts, or lack of oversight often go unnoticed until there’s a breach.

ISO 27001 tackles this in Control A.15, which covers how supplier relationships should be managed.

The controls 5.19 to 5.23 (formerly A.15) formalize the process of selecting vendors, establishing access boundaries, monitoring security practices, and effectively offboarding them. This extends vendor oversight beyond legal and procurement, making it a core component of your Information Security Management System (ISMS).

There’s no need to apply controls to every supplier. However, if a vendor processes sensitive data or supports critical systems, ISO 27001 holds your business responsible for managing that risk.

TL;DR ISO 27001 requires identifying vendors, controlling their access, and monitoring their compliance with your ISMS. Key controls cover selection, contract security terms, service changes, monitoring, and offboarding to manage vendor risks. Ongoing risk assessments, documented reviews, and continuous monitoring ensure vendor accountability and audit readiness.

What is vendor management in ISO 27001?

In ISO 27001, vendor management is identifying, evaluating, and controlling information security risks associated with third-party suppliers. These parties could be 

vendors, service providers, contractors, cloud platforms, and SaaS tools that can access, process, or impact your organization’s systems or data.

The vendor management in ISO 27001 thus ensures that a business governs the supplier relationships through documented controls, risk assessments, and contractual security obligations, as outlined in Clauses 5.19 to 5.23 of ISO/IEC 27001:2022.

The standard outlines this in Control A.15, which covers how businesses can handle vendor and supplier relationships. As a company, you’re expected to list your vendors, define what services they provide, document what data or systems they can access, and confirm they follow the rules set by your information security policy.

What auditors check in accordance with ISO 27001 vendor management

Vendor management is subject to both internal and external audits under the ISO 27001 standard. Auditors review your implementation of Control A.15 (now mapped to Clauses 5.19–5.23 in the 2022 version).

The audits usually:

• Identifies and documents third-party suppliers
• Tracks what data, systems, or infrastructure vendors can access
• Evaluates and controls the risks involved in those relationships

Which ISO 27001 controls apply to vendor management?

ISO 27001 controls the foundation for the organization’s Information Security Management System (ISMS). It defines a set of actionable requirements that help reduce information security risks to exercise control over access policies, encryption, vendor relationships, and more.

ISO/IEC 27001:2022 outlines five specific controls that are applicable in cases where vendors handle sensitive data, support critical systems, or have backend access.

5.19 – Supplier Relationships

Supplier relationship controls require formalizing the way an organization selects, authorizes, and manages vendors with whom it provides access to sensitive systems or data.

This control requires:

• Defining a process to choose based on how compliant they are with security posture and certifications like SOC 2 vendor management, ISO 27001, etc.
• Documenting the type of data or systems (PII, financial records, internal dashboards) each vendor can access
• Vendor to align with the security goals to make sure that their practices don’t compromise your ISMS. For example, if your policy enforces 2FA, encryption at rest, and secure development practices, your vendor must match or exceed those controls.

5.20 – Security within agreements

Every vendor contract should clearly define the security rules. For example, policies must be in place for encryption, data handling requirements, breach notifications, and audit rights.

Businesses make sure they:

• Add detailed security clauses in the agreement, such as requirements for encryption, authentication, access controls, and audit rights.
• Define who is responsible for what in the event of an incident. For instance, who reports, investigates, and remediates a data breach?
• Sets the minimum compliance baselines that vendors must meet, such as GDPR alignment, ISO 27001 compliance, or SOC 2 reports.

5.21 – Changes in supplier services

This control requires maintaining visibility and control in case a vendor makes changes in their business environment, especially if those changes impact your systems, data, or compliance posture.

Practicing this control needs organizations to:

• Track changes in scope, such as new services, system integrations, or updated SLAs that can pose new risks or increase access to sensitive data.
• Re-assess the risks when a vendor changes their hosting regions to deploy new infrastructure or onboard new subcontractors.
• Update security requirements and agreements if changes from the vendor side can impact the way data is stored, processed, or transferred.

5.22 – Monitoring and review

This control is about regularly checking whether your vendors are still meeting security expectations and SLAs. Typically, continuous monitoring and reviewing require:

• Setting a review meeting: monthly, quarterly, or annually, to assess vendor performance, control effectiveness, and compliance with security terms.
• Collecting evidence such as access logs, incident reports, or updated certifications to verify that agreed-upon controls are still in place.
• Flagging SLA failures, control violations, or unreported incidents that may put the systems or data at risk.

5.23 – Termination and offboarding

When a vendor leaves, there’s a standard process to follow for revoking the access, returning or deleting data, and verifying their exit (documented).

It becomes vital for organizations to:

• Revoke all credentials, tokens, API keys, or shared credentials that the vendor had access to.
• Request data deletion confirmations to ensure the return of sensitive assets based on the retention and legal obligations.
• Validate that backups, data replicas, or sandbox environments don’t retain vendor access.

Why vendor risk management matters in ISO 27001

Doing business outside of your organization requires sharing data with other businesses. But, how they access, use, and process that data can make you vulnerable if not controlled by ISO 27001. It requires you to stay vigilant for every outsourced service, from cloud hosting to payroll processing, since they create a potential entry point for security failure. Here’s why vendor risk management is important:

1. Vendors extend your risk surface

You may have strong internal controls, but if a vendor with access to your data lacks encryption, MFA, or patch hygiene, it creates indirect exposure. ISO 27001 expects you to treat vendor environments as part of your broader security boundary.

2. Vendors impact your audit posture

Auditors request mapped supplier inventories, risk classifications, signed agreements with security clauses, and ongoing review logs. Missing these won’t just raise flags, they can cause audit delays, rework, or even lead to nonconformities.

3. Third-party incidents are still your responsibility

Whether it’s a vendor breach or a system misconfiguration, regulators and clients will hold your business accountable. ISO 27001 vendor management builds a provable framework to demonstrate due diligence.

4. Lack of vendor control weakens your ISMS

If you can’t show how vendor risks are identified, assessed, and treated, your entire ISMS can be deemed incomplete. Clause 6.1 (Risk Treatment Planning) and Clause 8.1 (Operational Planning) both relate to how third-party risks are managed.

ISO 27001-compliant vendor management process

Vendor management under ISO requires following a structured, auditable process. Following these steps can help reduce risk at every stage of a supplier relationship. Each of these steps cohesively builds up to identify vendor-related risks, allowing for the evaluation, documentation, and demonstration of control as part of your ISMS. 

Your business isn’t just meeting compliance with a process.

Instead, you take it a notch above to prevent operational, legal, and reputational damage that often starts from external dependencies.

The few important steps in the process are as follows:

Step 1: Create and manage a centralized vendor inventory

Begin by creating a central vendor inventory. Gain visibility on what vendors access as you document every vendor relationship, whether it’s for infrastructure, finance, SaaS tools, or consulting. 

Key activities:

• List all active and inactive vendors, including third-party and fourth-party suppliers
• Record the access that vendors have: the data they handle (e.g., PII, source code) and the systems they have access to.
• Note their compliance status (e.g., ISO 27001, SOC 2 Type II, GDPR readiness).
• Track key vendor metadata such as primary point of contact, contract start and end dates, renewal terms, and any auto-renewal clauses.

Step 2: Determine vendor risk levels

After listing the vendors, categorize them based on the data they interact with and the risk they carry.

ISO 27001 vendor management requires implementing proportional controls so that the high-risk vendors are subject to thorough scrutiny.

Action items:

• Group the vendors based on their risk level — high, medium, or low — established by what they can access (such as sensitive data or core systems).
• Use clear criteria. For example, data criticality, depth of the vendor’s integration, level of dependency on their service, etc. 
• List vendors having access to regulated data, like personal info, health records, or financial details, to apply tighter controls.

Step 3: Conduct vendor risk assessments

In ISO 27001 risk assessments, vendors are assessed based on the sensitivity of the data they handle, the scope of system access they’re granted, and how critical their services are to your operations. 

It becomes less about volume and more about exposure, dependency, and risk impact. That’s why vendor risk assessment tools and templates come in handy for review consistency and audit readiness.

Step 4: Specify and implement security clauses

Complying with ISO 27001 requires an organization to define and enforce security obligations through written contracts and agreements. It’s for the security expectations before a vendor gains access, to formalize how vendors must protect your data and align with your ISMS.

The clauses must 

• Specify the baseline standards that vendors will follow (MFA for all users, secure SDLC, etc.)
• Set breach response notification window (typically 72 hours) along with incident logs and post-incident findings.
• Spell out audit rights to review their security documentation or send independent auditors in case the risk levels change.

Step 5: Monitor vendors on an ongoing basis

ISO 27001 vendor management requires continuous monitoring of vendors’ data handling practices and security controls. This is to ensure that these vendors meet your requirements and haven’t introduced any new risks.

This aligns directly with Control 5.22 (Monitoring and Review of Supplier Services) in ISO/IEC 27001:2022.

ISO 27001 vendor risk management best practices

Complying with ISO 27001 requires transparency on how vendors interact with the systems and data. For this, there are a few best practices to follow:

1. Define vendor risk criteria

Before managing risk, define what risk means in your vendor context. This classification makes sure you don’t apply the same controls to a food delivery app vendor as you would to your payroll processor.

Bring clarity, consistency, and accountability across the organization by:

• Grouping vendors into risk tiers (e.g., high, medium, low) based on access to production systems, sensitive data, or business-critical services.
• Using consistent criteria like regulatory impact (PII, PHI), geography (cross-border processing), and system dependency.

2. Regularly assess vendor risk

Risk assessment is an ongoing activity. As a part of compliance, organizations are mandated to validate whether a vendor’s controls are still aligned with their ISMS frameworks.

Such continuous assessment requires:

• Collecting the evidence for SOC 2 reports, pen test results, breach logs, and ISO certificates.
• Reassess vendors annually or whenever there’s a change in service scope or ownership.

3. Validate vendor security posture with evidence, not assumptions

ISO 27001 expects you to verify the vendor’s security postures backed by evidence. Your business needs to map the vendor’s posture to your ISMS by:

• Asking for their latest SOC 2 Type II report, ISO 27001 certificate, or independent pen test results.
• Requesting details on their incident response process, including any past breach disclosures.
• Checking for their annual third-party audits or a custom security questionnaire aligned with your controls.

4. Monitor vendors continuously, not just at onboarding

Initial due diligence may not be enough when the risk levels shift in case the vendors change infrastructure, take on new subprocessors, or expand access scopes.

So, for continuous monitoring, you’ll have to:

• Schedule quarterly or semi-annual reviews of critical vendors.
• Use automated tools to track expiring certs, missed SLAs, or new risk signals (e.g., breach news).
• Document every check-in: who reviewed it, what was found, and what action was taken.

3 useful resources for vendor management

Vendor relationships impact compliance, data security, and operational resilience. These downloadable resources can help you build or refine your vendor management process.

1. Vendor management policy template

A vendor management policy template is used to define the end-to-end vendor lifecycle, from onboarding and performance reviews to offboarding. It helps establish ownership, controls, and documentation practices. Download it for free.

2. Vendor selection for cloud businesses handbook

This guide helps SaaS and cloud-based teams evaluate vendors through a lens of security, reliability, and compliance. It includes practical checklists and decision-making factors. Download it for free.

3. Vendor management procedure

A vendor management procedure document walks through the procedural steps for executing your vendor policy, including due diligence, periodic reviews, and termination protocols. You can download it for free, here.

Automate ISO 27001 vendor risk monitoring with Sprinto

Managing vendor risk manually becomes unmanageable when you aim to meet ISO 27001 requirements. This is especially true for Clauses 5.19 to 5.23. Fragmented spreadsheets, scattered reviews, and inconsistent processes create blind spots. These blind spots lead to compliance gaps. Sprinto eliminates this chaos by embedding vendor risk monitoring directly into your ISO 27001 workflows.

Right from onboarding vendors to offboarding, Sprinto helps you:

• Auto-classify vendors based on access to sensitive data, infrastructure, or systems
• Enforce ISO 27001 controls across Clauses 5.19 to 5.23 with mapped workflows
• Schedule recurring assessments, attach evidence, and flag risk deviations in real time
• Centralize due diligence documents, agreements, breach reports, and certifications
• Track every vendor interaction, from SLA performance to access logs and termination records

If a vendor’s risk profile changes, Sprinto detects it immediately. For example, the platform alerts you when a security incident occurs, a certification expires, or a vendor gains expanded access. You receive the warning before the risk affects your environment.

You can book a personal demo to see how leading compliance and security teams use Sprinto to streamline vendor oversight and enforce controls at scale.

Frequently asked questions

1. What counts as a “vendor” under ISO 27001?

A vendor could be any third-party SaaS provider, contractor, cloud host, or even a payroll firm. These are the ones who have access to your data, systems, or infrastructure.

2. Is vendor management mandatory for ISO 27001 certification?

Suppose your suppliers can impact your information security, yes. ISO 27001 requires you to assess and control those risks under Clauses 5.19 to 5.23. Ignoring them could block your certification.

3. How often should I review my vendors?

There’s no fixed schedule, but high-risk vendors may need reassessment at least annually, or whenever something changes (such as new services, incidents, or compliance lapses).

4. What’s the difference between a vendor risk assessment and due diligence?

Due diligence occurs prior to contract: verifying certifications, breach history, and legal standing. Risk assessments dig deeper into ongoing reviews of how vendors manage access, data handling, SLAs, and controls.

5. How does Sprinto help automate vendor risk assessments?

Sprinto has built-in workflows that can automate every stage of vendor risk assessment. It allows you to assign risk tiers, schedule periodic reviews, request documentation (such as SOC 2, ISO 27001, or penetration test reports), and log assessments in one place.