In our 2025 survey of more than 500 senior cybersecurity and risk management leaders, we found that the average mid-to-large size company (at least 500 employees) has 286 vendors. That average has grown by 50 vendors in just one year.

The reliance on third parties is growing, and the risk of a third-party vulnerability has increased, too. 72% of companies have experienced a breach in the last three years; 77% of those originated with a third party.

When combined with compliance requirements, these trends of growing vendor inventories and increased risk all add up to more complexity and underscore the need for a comprehensive risk management program that includes a specific emphasis on third-party risk management (TPRM).

It should come as no surprise that companies are turning to software solutions to help them handle this challenge. 49% of companies currently use some kind of solution designed specifically for the TPRM process, while 44% of companies handle their vendor risk management through a module in a larger Governance, Risk & Compliance (GRC) tool.

Each kind of solution may play a role in your overall approach to vendor risks, but selecting the right choice for your business depends on several factors. And it’s not always an either/or decision, either; many large, complex organizations utilize both a GRC and a TPRM tool.

To help you make a more informed decision for your business, let’s take a look at the relative strengths and weaknesses of each type of risk management solution when it comes to handling third-party risks. We’ll also discuss the reasons you may choose one over the other—or choose both.

What are GRC and TPRM?

It’s important to first clearly define the distinct disciplines of GRC and TPRM before we take a closer look at the software solutions that support them. Every company faces a unique risk profile, influenced by factors such as the:

Kinds and volumes of data generated through business activity
Regulatory requirements of their industry
Interdependence of their business with other markets or industries
Competitive landscape and necessity of innovation

Here’s how GRC and TPRM each help to address these risk factors.

Overview: Governance, Risk, and Compliance

Governance, Risk, and Compliance is a strategic framework used to align business objectives with regulatory requirements, risk management practices, and corporate governance principles. It integrates three core functions:

Governance—Establishes policies, procedures, and leadership structures to ensure the organization operates ethically, transparently, and in alignment with its strategic goals.
Risk management—Identifies, assesses, and mitigates internal and external threats that could impact business operations, financial stability, security, or reputation.
Compliance—Ensures the organization adheres to laws, industry regulations, and internal policies, reducing legal exposure and reputational damage.

An effective GRC strategy fosters accountability, efficiency, and resilience by bringing together diverse stakeholders for better collaboration and enabling a proactive approach to possible risks. It also ensures regulatory integrity.

Overview: Third-Party Risk Management

TPRM is the process of identifying, assessing, monitoring, and mitigating risks associated with external entities such as vendors, suppliers, service providers, and partners. Since organizations increasingly rely on third parties for critical business operations, TPRM ensures that these relationships do not introduce undue risks to security, compliance, financial stability, or reputation.

Effective TPRM involves:

Risk assessment and due diligence—Evaluates third parties before engagement to understand potential risks related to security, compliance, financial health, and operational resilience.
Ongoing monitoring—Continuously tracks vendors for emerging risks, cybersecurity threats, regulatory changes, and performance issues that could impact business continuity.
Remediation and risk mitigation—Addresses identified risks through contractual controls, policy enforcement, and corrective action plans to maintain a secure and compliant third-party ecosystem.

A well-executed TPRM strategy has many of the same outcomes as GRC, except through the specific lens of your vendor landscape. It strengthens business resilience, ensures regulatory compliance, and protects sensitive data, reducing the likelihood of disruptions, security breaches, or financial losses caused by third-party failures.

Advantages and Disadvantage of GRC Software

Now that we’ve outlined the distinctions between the practices of GRC and TPRM, let’s take a deeper dive into how each kind of software solution helps you manage vendor risks. We’ll begin with looking at the pros and cons of GRC tools.

Advantages

One system for enterprise-wide risk and regulatory compliance—GRC platforms cover a broad range of risk areas, from regulatory compliance to internal security policies. They help unify and centralize risk oversight across an entire organization, including third-party relationships.
Automation for Standardized Risk Processes—Many GRC tools offer automation for audits, reporting, and monitoring, reducing manual work and improving consistency across risk programs.
Seamless integration of third-party risk with other risk domains—The discipline of GRC is responsible for handling a wide range of risk domains, such as IT risk, operational risk, financial risk, and reputational risk. By handling third-party risk activity within your GRC platform, it makes it easier to synthesize the full range of risk intelligence into a single view of overall risk.

Disadvantages

Not purpose-built for TPRM—While GRC platforms can manage third-party risk, they weren't designed specifically for vendor management, so they often require customization to fit TPRM needs. You may also lose out on some of the advanced features of a TPRM solution, such as AI-first capabilities for automation.
More complex implementation—Because they handle multiple risk areas, setting up a GRC system can take time and significant resources, requiring alignment with existing processes. This can be a time-consuming and costly process. It may also require specialized roles to maintain your system in the long term.
Data integration challenges—If a GRC platform isn’t configured properly, third-party risk data might not sync well with other risk categories, leading to fragmented insights. This can hinder some of the natural advantages you might otherwise get from a centralized system by preventing a synthesis of risk intelligence.
User adoption can be slow—Employees unfamiliar with broad risk management software may find GRC platforms difficult to navigate, slowing down adoption. The complexity of the system may also impact user experience, further slowing adoption.

Advantages and Disadvantages of TPRM Software

Now, let's take a closer look at the pros and cons of using a purpose-built TPRM solution for vendor risk.

Advantages

Designed specifically for third-party risk—TPRM solutions are tailored to assess, monitor, and mitigate risks that arise specifically from third-party engagements. This specialization ensures that the tools address the unique challenges of third-party risk management, providing features such as vendor onboarding assessments, continuous monitoring, detailed risk reporting, and automated assessments.
Enhanced risk visibility and control: By concentrating on third-party relationships, TPRM platforms offer in-depth visibility into the risk profiles of external partners. This focus allows organizations to implement more effective risk mitigation strategies and maintain tighter control over third-party interactions, reducing the likelihood of supply chain disruptions or compliance breaches.
Operational efficiency: TPRM tools often come equipped with automation capabilities that streamline processes such as vendor assessments, due diligence, and continuous monitoring. This automation reduces the administrative burden on internal teams, allowing them to focus on strategic decision-making and risk mitigation efforts.
Regulatory compliance support: Specialized TPRM software is designed to keep pace with evolving regulatory requirements related to third-party engagements. Many platforms give assessors access to a library of standard frameworks designed to address regulatory needs. These tools assist organizations in ensuring that their third-party relationships comply with relevant laws and standards, thereby reducing the risk of penalties.
Faster implementation and easier use—Since TPRM platforms focus solely on vendors, they are often easier to deploy than GRC systems, requiring less customization. You may also realize cost savings by eliminating the need for system administrators. And the purpose-built nature of the solutions means they are built with TPRM end-users in mind, accelerating adoption and speed-to-value.

Disadvantages

Limited Scope: While TPRM solutions excel in managing third-party risks, their narrow focus means they may not adequately address internal risks or broader governance and compliance activities. Organizations seeking an all-encompassing risk management solution might find TPRM tools lacking in this regard.
Integration Challenges: Implementing a standalone TPRM system may require integration with existing GRC platforms or other internal systems to achieve a comprehensive risk management framework. This integration can be complex and resource-intensive, potentially leading to data silos if not managed effectively.
May not be a fit for smaller companies: Deploying and maintaining a dedicated TPRM solution demands financial and human resources. Smaller organizations with limited budgets and personnel might find it challenging to justify the investment, especially if their third-party network is not extensive.
Potential Redundancy: For organizations that already utilize comprehensive GRC platforms, adding a separate TPRM tool might lead to overlapping functionalities. In such cases, it is crucial to assess whether the specialized features of the TPRM software provide sufficient additional value to warrant its adoption alongside existing systems.

When to Use GRC and TPRM Solutions (or Both) for Your Business

The relative strengths and weaknesses of each type of software can make a choice between the two a close one for many companies. There are also good reasons that your business may select both types of software to better meet your needs. To close out, let’s take a look at some of the decision-making that goes into your choice.

When to choose a GRC platform

If you’re a large, complex organization, you’ll need a holistic risk and compliance program that covers a wide range of risk domains across all aspects of your business. In this instance, you’ll likely need either a single GRC solution, or separate solutions for each domain of risk—including third-party risk.

A GRC tool is a good fit for your business if you don’t rely heavily on a huge vendor inventory for business-critical operations; if your vendors don’t interact with or have access to critical data sources and systems; or if you’re not strictly regulated.

When to choose a TPRM platform

If you rely on a large number of third parties and vendors for business-critical operations, you may need the more advanced, specialized, user-friendly capabilities found within a purpose-built TPRM solution. It makes sense to go this route if your TPRM program is currently resource-intense and time-consuming, as a TPRM platform can lead to greater efficiencies, better resource allocation, and reduced costs.

When to choose both

The truth is that the vendor risk modules found in most GRC tools aren’t as sophisticated as purpose-built TPRM software. If you have a complex environment, you likely face a broad range of risk domains AND heightened risk factors for your vendors. In this case, it makes sense to have the best tools available to thoroughly address both needs.

As we all know, cost is always a factor when making choices like these. That’s why it’s very important to take a value-based approach to your decision. A TPRM and GRC solution will both come with some costs, but choosing one or the other alone may also incur costs: more time, less efficiency, less insight to make the best choices, and—utimately—more risk.

Look for the features of both solutions that amplify their value. Does your TPRM solution integrate well with your GRC? Are there features of your TPRM solution (like AI automation and continuous monitoring) that increase the output of your team without adding headcount? These factors can reduce the overall costs of your risk management program, more than offsetting the additional price of the software.

Whistic TPRM: Purpose-Built to Support Enterprise Risk Management

We understand how important it is to get it right when it comes to selecting your approach to third-party risk. That’s why we’ve built the industry’s leading TPRM platform to support and enhance your overall risk management goals.

The Whistic Platform does this by being AI-first, modernizing TPRM so you can increase the speed and depth of your vendor assessments while reducing costs. Whistic solutions:

Work with existing TPRM workflows, adding automation at every step. It works the way you do, so there’s very little change-management. And the user experience makes it easy to see value quickly.
Integrates with critical systems you already use, making it feel like an organic extension of your GRC tool instead of grafted-on widget.
Leverages industry-best AI. Whistic’s Assessment Copilot suite of capabilities allow you to summarize and assess vendor security intelligence; summarize complex audit reports like SOC 2 according to your controls; and query your entire vendor inventory simultaneously to surface global risks—all in a fraction of the time and in just a few clicks.

If you’re in the process of evaluating third-party risk solutions and considering a purpose-built TPRM platform, let our experts show you how AI-first TPRM can give you the advantages you need. Schedule some time to see it in action for yourself.