Budgeting for TPRM Success

If you've worked in third party risk management (TPRM) for any length of time, you know budget season rarely gets easier. Third party populations continue to grow. Business units expect reviews to move faster. Regulations continue to evolve, and AI has introduced new considerations into third party due diligence.

Regulators have also made something else clear. Effective TPRM requires appropriate staffing, expertise, governance, and ongoing oversight. Leadership is responsible for ensuring those resources are available.

The challenge, of course, is that leadership can't fund what it doesn't understand. It's up to TPRM leaders to demonstrate where the program stands today, where the gaps exist, and what resources are needed to support the business.

That's where a well-built budget becomes one of the most important tools in your program.

Start with Actual Spending 

Before building next year's budget, understand where this year's money actually went.

Last year's approved budget is only part of the picture. Actual spending often tells a different story. Software renewals increase. A hiring freeze leaves a key position vacant longer than expected. An unplanned third party event requires outside expertise.

Break spending into broad categories such as:

• Technology and software

• Outsourced assessments

• Staffing 

• Training and certifications 

• Consulting and audit support

Some of these costs may be buried inside shared enterprise budgets, so partnering with finance early can save hours of reconstruction.

Once you've organized the numbers, identify the largest variances. Those differences often reveal where the program is changing and provide the strongest justification for next year's request.

Pro Tip: Compare at least two years of actual spending. Trends usually tell a stronger story than a single year's variance. 

Measure the Gaps 

The next question is whether your program is keeping pace with demand.

Has your third party population grown? Are reassessments staying on schedule? Has your backlog increased? Are business units waiting longer for reviews? Are the risk domains you are assessing covering the right risks?

If you aren't tracking these metrics yet, start now, even if it's only in a spreadsheet.

Whenever possible, convert the problem into numbers. If third party growth resulted in forty additional assessments this year, estimate the effort required to support that increase. Finance can evaluate measurable impacts much more easily than general statements about workload.

Quick Check 

• How many third parties were added this year? 

• What's your average assessment turnaround time? 

• Where is your largest backlog? 

• Which bottleneck would disappear first if your budget were approved tomorrow? 

How Does Your Program Compare? 

Every organization has different priorities, but it helps to understand where other TPRM programs are investing.

According to KPMG's 2026 Global Third Party Risk Management Survey of 851 organizations, the top investment areas are risk assessments and due diligence (52%), TPRM technology (51%), cybersecurity and data protection (49%), and regulatory audits (45%). More than 80% of organizations outsource at least part of their TPRM activities, while only 17% reported having fully reliable TPRM data.

These findings aren't a blueprint for your budget, but they provide a useful benchmark.

Pro Tip: If your investment priorities look very different from your peers, be prepared to explain why. Sometimes there's a good reason and being able to articulate it to leadership is essential.

Think about it this way... What level of third party risk does the organization need to manage, and what people, technology, intelligence, and assurance capabilities are required to manage it effectively?

AI Is Expanding the Scope of TPRM 

AI is becoming part of more third party products every month, including products many organizations already use. As a result, existing third party relationships now require additional scrutiny.

Questions about training data, model governance, customer information, and contractual protections have become routine parts of due diligence.

Many organizations also expect AI to reduce costs and staffing needs. That expectation has largely outpaced reality. According to KPMG's survey, only 22% of organizations rated their AI initiatives as very effective.

Finance may expect efficiency gains that haven't materialized, while TPRM teams face additional review work. Budget for the resources needed to support that growth.

Budget Checklist

• Update AI due diligence questionnaires. 

• Review AI-specific contract language. 

• Invest in team training. 

• Consider managed services or specialized expertise. 

• Evaluate tools that improve assessment efficiency. 

Headcount May Not Be the Only Answer 

When workloads increase, it's easy to assume another team member is the answer.

Sometimes that's true.

Sometimes the real issue is an inefficient process, a technology gap, or the need for specialized skills.

Before requesting another position, step back and identify what's actually slowing the program down. You can also ask which TPRM activities are consuming human capacity without requiring human judgement. Then consider all of the available options.

• Improve or redesign an existing workflow.

• Use capabilities already available in your technology stack. 

• Automate repetitive administrative tasks. 

• Outsource TPRM processes such as due diligence document collection or reviews 

• Bring in part-time contractors during peak periods. 

• Share platforms or subscriptions with Procurement, Information Security, or Compliance to reduce total cost of ownership.

If another employee is still the right solution, you'll have a much stronger business case because you've already evaluated the alternatives.

Pro Tip: Before requesting another FTE, ask whether the problem is capacity, process, technology, skills, or temporary workload. The answer will help you determine which investment will drive the improvement you need.

Don't Overlook the Small Line Items 

Some of the easiest budget items to miss are also the ones most likely to create problems later.

Recurring costs often increase over time, and one-time projects have a way of becoming recurring if they aren't clearly identified. Spending a little extra time reviewing your assumptions now can prevent mid-year surprises.

Commonly Forgotten Budget Items 

• Platform renewals and licensing increases 

• Team training and certifications 

• AI-specific assessment tools or questionnaire updates 

• Fourth-party risk initiatives 

• One-time consulting or implementation projects

Pro Tip: Separate one-time investments from recurring operating expenses. It makes future budgeting easier and helps finance understand your long-term costs.

Separate Needs from Nice-to-Haves 

Few organizations receive everything they request.

Before budget discussions begin, decide which investments are essential and which would simply improve the program. Those decisions are much easier to make before you're sitting across the table from finance.

A simple prioritization exercise can save time later.

Must Have 

• Regulatory or contractual obligations 

• Minimum staffing requirements 

• Critical platform renewals 

• Required operational activities 

• Reasonable Due Diligence capacity to support the business 

Nice to Have 

• Additional reporting capabilities 

• New dashboards 

• Premium platform features 

• Nice efficiency improvements that can wait another budget cycle 

Pro Tip: Ask yourself one question: If finance approved only half of this request tomorrow, what would stay? If you know that answer before the meeting, you're already ahead of the conversation. 

Build a Business Case, Not Just a Budget 

Budgets are approved because they support business objectives, not because a department needs more money. 

Rather than focusing on workload, explain what the investment enables the business to accomplish. Support your request with measurable outcomes whenever possible. 

For example: 

• Improve supplier onboarding. If assessments currently take 90 days and your goal is 60, estimate how many projects or contracts could move forward 30 days sooner.  

• Reduce operational risk. Estimate the potential impact of a supplier disruption, delayed implementation, or security incident, then compare it to the cost of earlier detection through stronger due diligence and monitoring.  

• Strengthen regulatory readiness. If audit findings or manual processes require recurring remediation, estimate the effort required to address those issues today versus preventing them in the future.  

• Support business growth. If the organization expects significant third party growth, estimate the additional assessment workload and show how your request will help maintain service levels and avoid backlogs.  

The stronger your data, the stronger your business case. Third party growth, assessment volumes, turnaround times, backlog trends, and remediation effort all provide objective evidence that leadership can evaluate. 

Pro Tip: Don't ask for more money. Ask for the ability to deliver a measurable business outcome. 

Keep Tracking Throughout the Year 

Budget season shouldn't be the only time you look at your numbers. 

Review spending throughout the year and compare actual expenses against your budget. Track trends such as assessment volume, cost per assessment, outsourced versus internal work, and unexpected costs resulting from third party incidents. 

Those metrics become the starting point for next year's budget instead of forcing you to rebuild the story from memory. 

Track These Metrics Quarterly 

• Budget versus actual spending 

• Third party growth 

• Assessment turnaround time 

• Assessment backlog 

• Cost per assessment 

• Outsourced versus internal work 

Final Thoughts 

No organization gets every budget request approved. 

The goal isn't to win every budget discussion. The goal is to build a request that's grounded in data, tied to business priorities, and realistic about where the program needs to grow. 

Organizations that consistently track workload, spending, and performance throughout the year rarely start from scratch when budget season arrives. They already have the data to explain where resources are needed and how those investments support the business. 

Budgeting is never just about the numbers. It's about demonstrating that your program understands its risks, knows where it needs to improve, and has a practical plan for getting there. 

---

Author Bio

Hilary Jewhurst

Sr. Membership & Education Coordinator at TPRA

Hilary Jewhurst is a seasoned expert in third party risk and risk operations, with nearly two decades of experience across financial services, fintech, and the nonprofit sector. She has built and scaled third party risk programs from the ground up, designed enterprise-wide training initiatives, and developed widely respected content that helps organizations navigate regulatory complexity with clarity and confidence.

Known for turning insight into action, Hilary’s thought leadership and educational work have become go-to resources for professionals looking to mature their TPRM programs. She regularly publishes articles, frameworks, and practical guides that break down complicated risk topics into meaningful, accessible strategies.

Hilary recently joined the Third Party Risk Association (TPRA) as a staff member, supporting industry-wide education, peer learning, and advancing best practices. She is also the founder of TPRM Success, a boutique consultancy that helps organizations strengthen their third party risk management capabilities through targeted training, tools, and strategic guidance.