Before Buying TPRM Software, Do These Two Things to Ensure Success

There’s no question that third-party risk management (TPRM) software has come a long way. Today’s platforms are powerful, offering automation, dashboards, workflows, artificial intelligence, and more.

But in the time I’ve spent helping clients implement these systems, I’ve seen the same issue arise time and time again: companies rush to buy TPRM software without first doing two critical things — defining their internal procedures and identifying functional requirements. The result? Confusion, misalignment, extended implementation timelines, and underutilized technology.

It’s understandable. With so many vendors promising rapid implementation and out-of-the-box functionality, it’s easy to assume that the software is the solution. Software is only as strong as the TPRM program it supports. Without internal processes in place or a clear vision of the functionality you want out of a TPRM system, that powerful platform you just invested in may end up sitting half-used, delayed, or misaligned with your organization’s actual needs.

In this blog, I’ll walk through:

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  1. Why internal procedures and workflows must be defined before software selection
  
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  2. How defining functional requirements sets a level playing field for evaluating vendors
  
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  3. The risks of skipping these steps — and the benefits of getting them right
  
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  4. A path to a smoother software selection and implementation
  

Why You Need the Process Before the Platform

Many organizations view software as the solution to their TPRM challenges. And while software can certainly help, it can’t compensate for a lack of internal clarity. Software won’t tell you:

• Who is able to submit requests for new third parties
• What your risk tiers are and how they’re defined
• What due diligence questions you need to ask vendors
• Who is responsible for reviewing vendor due diligence responses

If these fundamentals aren’t already defined, your software implementation is likely to stall. For example, I’ve seen clients mid-way through implementation get asked by the software vendor, “What does your due diligence process look like?” Too often, the response is: “We’re still figuring that out.”

This creates a domino effect — implementation delays, scope creep, and an inability to configure the tool to your actual needs.

Functional Requirements: Your Blueprint for Success

In parallel to defining internal procedures, it’s equally important to define your functional requirements — the specific capabilities the software must support.

Think of functional requirements as the translation layer between your process and your technology. Without them, your vendor evaluation becomes a guessing game. You’re relying on flashy demos and vendor promises instead of matching actual needs to specific functionality.

Here are just a few examples of questions your functional requirements should answer:

• Does the system need to support automated risk tiering based on inherent risk assessment results?
• Should due diligence questionnaires automatically be scoped based on an assigned risk tier (or information contained within a vendor request) to include relevant, risk-based questions?
• Do you need integration with your contract management system or other complementary tools used in the vendor management process (e.g., risk intelligence platforms)?
• Should AI perform an initial screen of vendor’s due diligence responses to quickly call attention to items that require further scrutiny?
• Do you need configurable dashboards for reporting or are you okay using out-of-the box reports and exports?

By defining these needs before evaluating vendors, you:

• Create a level playing field by comparing vendors against the same checklist
• Avoid being swayed by features that sound great but aren’t relevant to your needs

Align stakeholders internally around what the system is supposed to do

Real-World Consequences of Skipping These Steps

Here are just a few issues I’ve seen firsthand when organizations select software before defining procedures and requirements:

• Implementation Delays: Without finalized workflows or clarity around who owns which steps in the process, system configuration stalls. Teams end up having to pause implementation sessions to answer basic operational questions, wasting time and momentum.
• Redundant Features: When requirements aren’t documented, teams may select a system with capabilities they don’t need, leading to unused or underutilized technology. For example, paying for a contracting module when the organization already uses and maintains a separate contract management system.
• Customization Overload: Organizations often try to bend the tool to fit their undefined or inconsistent workflows. This leads to excessive customization, often resulting in administrative headaches managing workarounds vs leveraging purpose-built functionality to improve workflows.
• Low User Adoption: If stakeholders aren’t consulted early and the system feels unintuitive or misaligned with daily workflows, they’re unlikely to engage. This erodes trust in the tool and can push people back to manual workarounds.

These consequences not only increase costs and timelines but also jeopardize the overall success and sustainability of the third party risk management program.

The Path to a Smoother Selection and Implementation

Here’s a phased approach that’s proven to work:

1. Map Your Current-State Processes
   Identify how vendor risk is currently managed, where gaps exist, and who owns what.

2. Define Your Future-State Procedures
   Establish how you want vendor requests, risk assessments, due diligence, escalations, and ongoing monitoring to work moving forward.

3. Document Functional Requirements
   Translate your procedures into specific system capabilities. Engage stakeholders to validate these needs.

4. Align Stakeholders
   Socialize the future-state process and requirements with key groups to ensure shared understanding.

5. Select the Right Software
   Now you’re ready to evaluate vendors with confidence and objectivity.

6. Implement with Confidence
   Your vendor now has a roadmap to configure the tool to support your process — not the other way around.

Final Thoughts

Third-party risk management software is a powerful tool — but only when paired with the right foundation. If you select a system before defining how your program works or what you need it to do, you risk wasting time and money, potentially ending up with an unused system sitting on the shelf.

Define your procedures first. Clarify your functional requirements. Align your stakeholders. Then, and only then, begin your software selection process.

It’s not just about buying a system. It’s about building a program that works — and software is only one piece of that puzzle.

2026 TPRM Software Market

The TPRM software market is booming: $7.42 billion in 2025 growing to $20.59 billion by 2030 (17.8% CAGR). Key trends in TPRM software:

• AI-Driven Risk Scoring: 85+ TPRM tools now offer AI-powered risk assessment capabilities
• Continuous Monitoring: Real-time risk monitoring replacing periodic assessments
• Integration Capabilities: Seamless integration with procurement, contract, and GRC systems
• Scalability: Platforms designed to manage thousands of vendors efficiently

Essential TPRM Software Selection Criteria

• AI-driven risk scoring: Automated risk assessment and prioritization
• Continuous monitoring: Real-time alerts for vendor risk changes
• Integration capabilities: Connect with existing procurement and security tools
• Scalability: Handle growing vendor portfolios without performance degradation
• Workflow automation: Streamline assessment, approval, and monitoring processes
• Reporting and analytics: Executive dashboards and compliance reporting

Frequently Asked Questions About TPRM Software

How much does TPRM software cost?

TPRM software costs vary by vendor count and features: Small business solutions start at $15,000-$30,000 annually (up to 100 vendors), mid-market solutions range from $50,000-$150,000 annually (100-500 vendors), and enterprise platforms cost $150,000-$500,000+ annually (500+ vendors). Many vendors offer tiered pricing based on vendor count, user licenses, and feature sets. Factor in implementation costs (typically 20-40% of first-year licensing).

What’s the typical implementation timeline?

TPRM software implementation typically takes: Small deployments (3-4 months) for basic configurations with limited integrations, mid-market deployments (4-6 months) for standard configurations with key integrations, and enterprise deployments (6-12 months) for complex configurations with extensive integrations and customizations. Timeline factors include: data migration complexity, integration requirements, customization needs, and organizational change management.

Build vs. buy: which is better for TPRM?

Buy is generally better for TPRM. Commercial TPRM platforms offer: proven AI risk scoring algorithms, continuous monitoring capabilities, regular updates for new threats and regulations, vendor-provided support and training, and faster time to value (months vs. years). Build only makes sense for: organizations with unique requirements not met by any vendor, companies with significant internal development resources, or highly specialized industries. Even then, consider customizing a commercial platform rather than building from scratch.

Related Resources

Learn more about vendor management best practices:

• Is Your TPRM Program Stuck?
• Key Features to Look for in Procurement Software

Last Updated: January 5, 2026