Startups are finally seeing that manual vendor management isn’t enough. Most SMEs still track vendors in spreadsheets. We explore why continuous monitoring matters more than ever.
Why it matters: For SMEs competing for enterprise customers or investor capital, proof of vendor oversight is becoming table stakes. Teams that see their vendor ecosystem clearly move faster, close deals sooner, and sleep better at night.
The enterprise buyer is closing in. They like your product. They like your team. They’re ready to sign. Then they run their due diligence. One of your vendors, a payment processor you’ve used for two years, never got their certificate renewed. It expired last month. Red flag. They ask for proof that you’re monitoring vendor risk. You don’t have it. They wait for you to get it. You scramble. By the time you surface it, they’ve moved to a competitor who had the answer ready.
This isn’t just a breach story but a visibility story. And it’s happening to small businesses constantly.
Third-party breaches jumped 15% in 2024, and SMEs remain critically unprepared. While large enterprises invested heavily in vendor risk management tools, only 23% of small and medium-sized businesses adopted dedicated solutions.
The spreadsheet trap
The average company now manages 286 vendors, up from 237 in 2024. Yet 26% of organisations are still using spreadsheets to manage their third-party risks. Managing a growing vendor ecosystem manually feels simple at first. Update a tab. Track responses. Colour-code risk levels. For a company with 20 vendors, it works. With 100, it breaks. With 286, it falls apart completely.
The real cost isn’t the spreadsheet itself. It’s what the spreadsheet prevents. When vendors are spreadsheets, you’re reactive. A customer asks for proof of your vendor’s SOC 2 certification. You find the email from two years ago. You hope nothing has changed. If something has changed, you don’t know until you ask. Asking takes time. The customer waits. Deals slip.
When a vendor patches a security vulnerability, you find out accidentally, months later, during the next assessment. When credentials leak online, you have no way to know unless the vendor tells you, which they usually don’t.
According to a December 2023 Gartner survey, 45 per cent of companies experienced a third-party-related business interruption in the prior two years. This gap between annual check-ins and real-time visibility is where breaches hide.
Only 23% of SMEs had adopted dedicated vendor risk tools, compared to 68% among large enterprises. The tool gap is real. And it’s costly.
Real-time visibility changes everything
Today, a new generation of vendor risk tools lets SMEs automate monitoring, reduce manual effort, and reclaim control over their vendor ecosystem. The fundamental shift is visibility moving from annual to continuous. Instead of assessing vendors once a year, modern teams see vendor risk as it unfolds. According to Bitsight’s State of Cyber Risk and Exposure 2025 report, only 1 in 3 organisations continuously monitor all of their third-party relationships for risk exposure, despite 99% assessing vendors at least once.
When you add a vendor to a modern risk platform, the system immediately pulls certificate expirations, policy documents, and breach headlines in real time. You’re not waiting for the vendor to fill out a form. The internet is already telling you what you need to know.
Automation also means proportional effort. Not all vendors are equally risky. High-impact vendors warrant deeper reviews. Lower-impact vendors need only lightweight questionnaires. Modern platforms tier vendors automatically, so you’re not doing the same assessment for your payment processor and your office supplies vendor. Questionnaires used to be email attachments, often 50 pages long, formatted inconsistently, and sent to the wrong department. With AI-enhanced tools, recipients can generate detailed responses from rough notes, allowing respondents to focus on delivering value. Review cycles that once stretched across weeks now move in days.
And because all of this happens in a centralised platform, not scattered across spreadsheets and email, accountability exists. Nothing slips through the cracks because nothing gets lost in a forgotten tab.
Vanta, for example, shortens security-review cycles by 81%, so analysts spend afternoons on judgment instead of weeks on data entry. If vendor reviews previously took two weeks of manual work, now they take two hours. You reclaim that time for actual risk assessment.
From reactive to proactive
The shift from spreadsheets to continuous monitoring changes how SMEs position themselves in the market. When customers ask about vendor security, SMEs used to say, “We’ll get you that documentation.” Now they can say, “Here’s real-time visibility into our vendor ecosystem.” That’s a different conversation. For enterprises evaluating SMEs as potential partners, that matters.
Investors notice too. When SMEs can demonstrate that they’re actively monitoring third-party risk, not just checking a box annually, it signals maturity. It says you understand that security and compliance are ongoing, not episodic. For employees, it changes the work. Security and compliance teams stop chasing down questionnaires and start making decisions. That’s a more satisfying job. It also means the skills you need shift. You need people who can interpret risk data and make trade-offs, not people who are good at spreadsheet administration.
PWC’s Global Compliance Survey 2025 shows that 82% of companies are planning to invest more in technology to automate and optimise compliance activities. For SMEs, this shift is no longer optional. It’s table stakes.
What’s actually possible now
The market for vendor risk management has finally matured enough that SMEs have choices. Today’s leading tools offer purpose-built features like automated assessments, real-time monitoring, compliance mapping, and native integrations.
Advanced TPRM software automates vendor discovery through trusted integrations, issues self-assessment questionnaires supported by AI, and automatically applies pre-built risk scores. This removes the most time-consuming part of vendor management: evidence collection.
Integration matters too. A vendor risk tool that lives in isolation is just a fancy spreadsheet. Tools that connect to your broader security and compliance program multiply their value. When a vendor’s risk rating changes, it automatically flags the matching controls in your audit plan. When a vendor’s certification expires, your system alerts you before it becomes a problem.
The business case is clear. Breaches involving a third party now account for 30% of all data breaches. The average cost of a supply chain breach hit $4.91 million globally, with U.S. costs reaching $10.22 million.
Enterprises report 3x ROI within the first six months and a 75% reduction in vendor assessment time. For SMEs, that ROI compounds because your teams are smaller. Saving two weeks of manual work doesn’t just mean freed-up time. It means you’re not hiring another compliance person because your existing team can handle the volume.
The competitive advantage most SMEs are missing
In the modern SME, third-party risk isn’t a compliance box to tick. It’s a competitive advantage.
Teams that see their vendor ecosystem clearly move faster. They close deals sooner because they can answer customer security questions immediately, not after a week of internal chasing. They avoid surprises because they catch vendor issues early. They build trust because they can prove, in real time, that they’re managing risk seriously.
Spreadsheets can’t do any of this. They’re a legacy of a slower era, when vendors were fewer, breaches were less common, and audits happened once a year. The question isn’t whether to move beyond spreadsheets. It’s when.
Every quarter you wait is a quarter your team spends on manual work instead of strategic risk assessment. Every quarter you wait is a quarter a vendor is potentially operating without your knowledge.
The fastest-growing SMEs have already made the shift. The question now is whether the rest will catch up before the cost of staying behind becomes too high.
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