An organization plans to engage a third-party vendor to offload the maintenance of a non-core business application, intending to reduce its burden of patch management and system upgrades. To ensure the organizational risk is appropriately managed, which of the following is the BEST approach?
Renegotiate existing service contracts with the third-party vendor to emphasize risk management.
Enter into an outsourcing agreement with the third-party vendor that includes service level agreements (SLAs) specifically covering security patching and system upgrades.
Purchase cyber insurance to cover potential financial losses due to system vulnerabilities in the business application.
Procure additional security solutions to protect the business application instead of offloading maintenance.
The correct approach is to transfer the operational risk associated with maintaining and patching the application to a third-party vendor. This is achieved through an outsourcing agreement that includes specific Service Level Agreements (SLAs). The SLAs are a critical part of the contract that defines the vendor's responsibilities for security patching, system upgrades, and performance metrics, thereby formally transferring that operational risk. While cyber insurance also transfers risk, it primarily covers financial losses from security incidents, not the operational duties of maintenance. Procuring additional security solutions is an example of risk mitigation, not transference. Renegotiating an existing contract is less appropriate as the scenario implies a new engagement.
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