Risk Registers and the Importance of Reviewing Material SaaS Providers
Published on 05/11/2024
This blog will explore the purpose of risk registers, the role of material SaaS providers, and the critical importance of ensuring that risk registers include the evaluation of SaaS providers.
A risk register, also referred to as a risk registry, is a risk management tool that has the purpose of systematically evaluating, identifying, and monitoring all risks within an organisation. A company’s risk register can serve as a crucial point of reference across an organisation.
Alongside supporting risk management planning, a risk register typically designates an owner to a risk i.e., a person within a company who is responsible for the management of a particular risk. The status of a risk is also an aspect that’s common within risk registers. Risk status provides a clear indication on the current threat level of a risk, along with the level of impact that it can have.
SaaS (Software as a Service) refers to a cloud-based software delivery model, whereby software can be accessed via the internet. The difference between a SaaS provider and a material SaaS provider predominantly lies in the magnitude of influence that a provider has on a business’s operations.
Essentially, the services offered by a material SaaS provider are of critical importance to a business. If their ability to deliver services was to be disrupted, the impact on a business could be enormous.
Examples of business operations that are facilitated by material SaaS providers include CRM, HR management, and financial transaction management.
When the SaaS model initially arrived, some Escrow providers suggested that the Escrow Solutions used for on-premises software would also be applicable to SaaS systems.
However, due to the complex differences between the two software types, different Software Escrow solutions are required.
A common misconception around SaaS systems, is that business continuity strategies do not apply to them. However, the risk that arises from neglecting business continuity planning is actually greater for SaaS systems than on-premises systems. Due to this misconception, there have been cases in which risk registers have failed to comprehensively account for potential problems related to their material SaaS providers.
Ensuring that an organisation’s risk registry reviews SaaS providers and solutions supports the following:
SaaS Agreements may include terms and conditions that have a significant level of influence. Reviewing and ensuring that these terms are thoroughly understood supports the mitigation of potential future risk and/or challenges.
Reviewing the security measures used by a SaaS provider provides an indication of the level of security that surrounds data, including sensitive data such as the personal details of customers.
An SLA refers to a ‘service level agreement’. These agreements determine and define the level of service that is to be provided by a SaaS provider, e.g., response times, availability, strategy for approaching a disruption event.
A SaaS Agreement between a provider and end-user may carry hidden costs and unforeseen expenses. Reviewing the structure of a solution, along with all financial implications, ensures that cost is controlled and well managed.
It’s essential that a risk registry considers whether a SaaS provider is adhering to relevant laws and regulations. Failure to do so could lead to highly problematic outcomes for all parties.
Ultimately, the more thorough a company’s risk mitigation processes, the likelier it is that unforeseen obstacles can be faced and managed with confidence and convenience. Want to know more? Our team are always at hand to answer questions and provide guidance where needed. Feel free to get in touch or give us a call on 0161 488 1400.