Why Vendor Offboarding Is Riskier Than You Think and How Automation Can Help

When a vendor relationship ends, the risk doesn’t. 

Too often, vendor offboarding is treated as an afterthought, left to chance, split between departments, or buried in a never-used checklist. The problem? An incomplete or inconsistent termination process exposes your organization to some of the highest risks in the TPRM lifecycle. 

These risks include, but are not limited to, access that was never revoked, assets that were never returned, and/or data that was never deleted. 

The good news: these risks are avoidable, and automation can help. 

Why Offboarding Matters More Than You Think 

In many organizations, onboarding gets all the attention, due diligence, approvals, kickoff meetings, and security reviews. 

But what about the end of the relationship? 

"You wouldn’t let an employee walk out the door without collecting their badge and shutting off system access. Why do we do it with vendors?" 

Poor offboarding can lead to: 

• Lingering system access and potential unauthorized activity 

• Unreturned data or devices, especially in hybrid/cloud environments 

• No formal record of what actions were completed or by whom 

• Compliance gaps if data disposal or security controls were contractual 

The Automation Opportunity 

Here’s where automation can drastically improve vendor offboarding, making it faster, repeatable, and auditable. 

1. Triggering the Offboarding Workflow Automatically 

• When a contract is marked as terminated or not renewed, the system will kick off automated offboarding activities. 

• It can route these activities to IT, InfoSec, Procurement, and TPRM automatically. 

Tool tip: Use a trigger from your TPRM tool, GRC system, or contract lifecycle platform to launch this sequence. 

2. Auto-Assigning Offboarding Tasks 

Such offboarding tasks can include, but are not limited to: 

• Revoking system access and credentials 

• Collecting physical or virtual assets 

• Confirming data destruction or secure transfer 

• Archiving vendor risk files and workpapers 

Tool tip: Use tools like ServiceNow, Jira, or Monday.com to assign tasks and track completion status in real time. 

3. Generating & Storing Offboarding Evidence 

• The system can require documentation uploads or confirmations (e.g., screenshot of deprovisioned access, destruction certificates) of completed offboarding tasks 

• It can also store all evidence in the third party profile for audit purposes 

Tool tip: Attach offboarding steps to a third party profile in your TPRM platform or centralize storage in a secure SharePoint folder. 

4. Post-Termination Reviews 

• Set up a short internal review form to capture any final third party risks or lessons learned. 

• Optionally trigger a survey to business owners to assess third party performance. 

• Update the third party’s profile to note if the third party can be used again or if it is recommended to not do business with the third party. 

Tool tip: Use Microsoft Forms or Google Forms and auto-send based on the third party status change. 

Real-World Example: Offboarding Automation at a Global Fintech 

A fintech company with over 1,200 third parties discovered that more than 30% of “inactive” third parties still had some form of residual access, including access to shared cloud folders and legacy single sign-on (SSO) profiles. 

The organization then implemented a third party offboarding checklist built into their TPRM platform, which auto-triggered when a contract end date was reached or when a business owner marked a third party as "no longer in use." 

Each task, such as deprovisioning access, collecting assets, confirming data deletion, was auto-assigned to pertinent stakeholders with deadlines and owner accountability. 

Results in the first 6 months: 

• Reduced open-access risk by 78% 

• 100% of offboarding steps documented and accessible for audits 

• Gained stronger alignment between TPRM, InfoSec, and Procurement 

Getting Started: Questions to Ask 

• Do we have a standard offboarding checklist for third parties? 

• Who owns each task, and how do we know the tasks were completed? 

• Can we identify all third parties with system access that may still be active post-contract? 

• Do we store evidence of data destruction or handover? 

Quick Win to Try 

Start by creating a centralized third party offboarding checklist with due dates and owner fields. Even if you use Excel or a Google Form at first, link this to third party termination triggers and build consistency from there. 

Then, explore how your existing tools (TPRM platform, ticketing system, workflow automation) can formalize and automate the process. 

For additional information on the third party Termination process, view TPRA’s TPRM 101 Guidebook. 

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Author Bio

Heather Kadavy

Senior Membership Success Coordinator

Heather Kadavy joined the Third Party Risk Association (TPRA) in 2023 as the Senior Membership Success Coordinator. In recent year(s) Heather has been providing freelance TPRM consulting work to various organizations after retiring from a Nebraska financial institution after nearly 35 years where she oversaw and managed critical programs of the organization including Third Party Risk Management, Information Security,

Physical Security, Safety, Business Recovery, Financial Crimes, Model Risk Management, and Enterprise Risk Management.  In her TPRM role she had oversight of over a thousand third party relationships, systems, due diligence reviews and contract management activities.  She developed, facilitated, and implemented training programs for thousands of employees over the years.

Heather is a natural born connector of people and values relationship building at the cornerstone of her career.  She encourages you to connect with TPRA and herself via LinkedIn to join in the "TPRM Global Conversation".