Playbook for Incident Response to Third-party Service Provider Failure

Action Steps for Threats against a Third-party Service Provider (TSP) Failure

Description of Crisis

This section details specific actions to take before, during, and after a third-party service provider (TSP) failure.

This playbook is a training aid for Module 2 Session 2 of the CM-300/ 5000 Implementer/ Expert Implementer Course participants to attempt the CM plan development assignment.

Scenario: A third-party service provider has encountered a disaster and cannot provide its critical services, disrupting your organisation

Action Steps for Pre-Crisis

Before the crisis, proactive measures are essential: conduct risk assessments to identify critical services and their vulnerabilities, negotiate robust SLAs with clear communication protocols and recovery plans, and establish a dedicated Incident Response Team (IRT) with defined roles.

Risk Assessment (Preparation)

Identify Critical Services

• Conduct a thorough review of all services provided by third parties.
• Categorize these services based on their criticality to your daily operations.

Analyze Failure Scenarios

• Research common failure scenarios associated with each critical service.
• Estimate each scenario's potential impact (downtime, data loss, financial) on your business.

Contractual Safeguards (Preparation)

Negotiate Robust SLAs

1.  Ensure your Service Level Agreements (SLAs) with TSPs clearly define:

• Uptime guarantees for critical services.
• Maximum acceptable response times during outages.
• Communication protocols for notifying you of service disruptions.

Review Disaster Recovery Plans

• Request access to the TSP's disaster recovery plan to understand their outage response protocols.
• Negotiate provisions within your SLA that hold the TSP accountable for maintaining and testing their recovery plan.

Incident Response Team (Preparation)

Establish a Dedicated Team

1.  Form an Incident Response Team (IRT) comprised of representatives from:

• IT Operations
• Business Operations
• Legal Department
• Public Relations/Communications
  
  

3.  Develop a clear Response Playbook that outlines:

• Roles and responsibilities for each IRT member during a crisis.
• Communication protocols within the team and with external parties.

Alternative Solutions (Preparation)

Identify Backup Options

• Research and maintain a list of potential backup solutions or alternative service providers for critical services.
• This may involve pre-negotiating terms with alternative providers for faster onboarding in an emergency.

Communication Plan (Preparation)

Develop Communication Strategy

• Define internal and external communication protocols for crisis situations.
• Identify key stakeholders to be informed during a service outage (e.g., employees, customers, partners).

Prepare Messaging

• Develop clear and concise messages for different levels of service disruption, considering the potential impact on stakeholders.

Action Steps for During-Crisis

During the crisis, rapid detection and assessment are crucial. The IRT takes charge, prioritizing critical functions and implementing contingency plans. Clear communication with stakeholders and the TSP is essential. Leverage your SLA to hold the TSP accountable while exploring alternative solutions to minimize downtime. Detailed documentation throughout the response is vital for post-incident review.

Rapid Detection and Assessment

Monitor Service Status

• Establish clear communication channels with the TSP to receive immediate notification of any service disruption.
• Implement monitoring tools to detect service outages promptly.

Assess Impact

• Quickly assess the impact of the failure on your critical functionalities.
• Prioritize affected services based on their importance to core operations.

Activate IRT

Convene the Team

• Immediately assemble the IRT to initiate a coordinated response based on the pre-defined plan.

Establish Communication

• Designate a single point of contact within the IRT to manage all communication with the TSP and stakeholders.

Communication and Transparency

Internal Communication

• Communicate the situation promptly and transparently to internal stakeholders.
• Update staff regularly on the progress and potential impact on their work.

External Communication

• Craft clear messages for external communication, informing customers and partners about the outage and expected recovery timeline.
• Utilize appropriate communication channels (e.g., website, social media) to keep stakeholders informed.

Engage with TSP

Establish Direct Communication

• Open a direct communication channel with the TSP to understand the cause and estimate the recovery timeline.

Leverage SLAs

• Refer to your SLA to hold the TSP accountable for upholding their service guarantees.
• Negotiate with the TSP for resolution timelines and potential service credits (if applicable).

Execute Alternative Solutions

Implement Backups

• Implement pre-identified backup solutions or engage alternative service providers to minimize downtime if necessary.

Prioritize Functionality

• Focus on restoring critical functionalities first to ensure core business operations continue.

Documentation

Maintain Detailed Records

• Meticulously document all actions taken, communication exchanged, and decisions made throughout the crisis response.
• This record will be crucial for post-incident review and future improvement.

Action Steps for Post-Crisis

After service restoration, the focus shifts to recovery and future prevention. Conduct a thorough IRT debriefing to identify lessons learned and update your response playbook. Evaluate the TSP's performance based on the SLA and consider renegotiating terms or diversifying services across multiple providers. Finally, address any potential cybersecurity vulnerabilities and ensure compliance with relevant regulations. 

Following a third-party service provider (TSP) failure, the focus shifts to recovery, evaluation, and future prevention. Here are the detailed steps to take:

Service Restoration

Monitor Recovery Efforts

• Closely track the progress of the TSP's efforts to restore service.
• Maintain open communication with the TSP to receive updates and estimated timelines.

Test Functionality

• Once service is restored, thoroughly test all functionalities to ensure complete recovery.
• Identify any lingering issues and address them promptly with the TSP.

Transition Back to Normal Operations

• Develop a clear plan for transitioning back to normal operations.
• Ensure a smooth handoff from backup solutions or alternative providers (if used).

Post-Incident Review

Conduct IRT Debrief

• Convene the Incident Response Team (IRT) for a comprehensive debriefing session.
• Discuss the incident timeline, response actions taken, and areas for improvement.

Identify Lessons Learned

• Analyze the events to identify key learnings and areas for strengthening your response plan.
  
  Consider questions like:
  
  
• Was the initial detection and assessment prompt enough?
• Did the communication plan effectively reach all stakeholders?
• Were alternative solutions readily available and effective?

Update Response Playbook

• Revise your crisis management plan and response protocols based on the debriefing and lessons learned.
• Ensure the plan is updated with any changes identified during the review.

Third-Party Evaluation

Review TSP Performance

• Evaluate the TSP's performance during the outage based on the agreed-upon Service Level Agreement (SLA).
  
  Consider factors like:
  
  
• Timeliness of notification
• Communication throughout the outage
• Effectiveness of their recovery efforts

Negotiate with TSP

• Based on the evaluation, determine necessary actions regarding your relationship with the TSP.
  
  Options may include:
  
  
• Renegotiating the SLA for stricter performance guarantees.
• Terminating the service agreement if performance was deemed unacceptable.
• Diversification of Services:
• Consider diversifying your reliance on critical services by utilizing multiple providers.
  
  This can help mitigate risk and ensure redundancy in case of future outages.

Summing Up ...

By following these detailed steps after a service provider failure, you can ensure a smooth recovery, identify areas for improvement, and strengthen your organization's preparedness for future incidents.

Remember, continuous evaluation and adaptation are crucial for building resilience against third-party service disruptions.

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Reference Guide

Goh, M. H. (2016). A Manager’s Guide to Implement Your Crisis Management Plan. Business Continuity Management Specialist Series (1st ed., p. 192). Singapore: GMH Pte Ltd.

More Information About Crisis Management Blended/ Hybrid Learning Courses

To learn more about the course and schedule, click the buttons below for the  CM-300 Crisis Management Implementer [CM-3] and the CM-5000 Crisis Management Expert Implementer [CM-5].

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