Vendor management is changing faster than most organizations expected. 
AI vendors are now embedded across procurement, operations, cybersecurity, HR, finance, and customer experience. 
 
Vendor management in 2026 is no longer just about onboarding and due diligence. It is about resilience. 
 
Here are some key shifts we are seeing across industries: 
1. AI vendors are introducing new risk categories 
Organizations are now assessing risks that did not exist a few years ago: 
• model reliability and explainability 
• training data exposure 
• intellectual property leakage 
• hidden fourth-party dependencies 
• vendor AI governance maturity 
Many AI vendors rely on multiple external data providers, open-source libraries, APIs, and cloud providers, creating layered dependencies that are often not visible during procurement. 
 
2. Regulators are raising expectations for third-party oversight 
Regulations such as DORA, NIS2, the EU AI Act, SEC cyber disclosure rules, and global operational resilience frameworks are increasing accountability at the board level. 
Regulators are expecting organizations to demonstrate: 
• clear vendor criticality tiering 
• incident reporting capabilities 
• operational resilience testing 
• visibility into subcontractors 
• stronger contractual protections 
 
3. Continuous monitoring is replacing periodic vendor reviews 
Annual questionnaires are no longer sufficient. 
Organizations are moving toward: 
• real-time risk intelligence 
• external cyber monitoring 
• continuous control validation 
• automated vendor scoring 
• dynamic risk tiering 
Risk exposure can change quickly when vendors introduce new technologies, subcontractors, or infrastructure changes. 
 
4. Supply chain risk is increasingly influenced by geopolitical developments 
Organizations are evaluating vendor risk through lenses such as: 
• regional instability 
• sanctions exposure 
• data residency requirements 
• concentration risk 
• cross-border regulatory conflicts 
Vendor location and ownership structure now matter more than ever. 
 
5. Fourth-party risk visibility is becoming essential 
Many organizations still struggle to identify dependencies beyond their direct vendors. However, disruptions often originate deeper in the supply chain. 
 
Example: Cloud provider → SaaS provider → AI provider → open-source components → data aggregators 
 
Without visibility across this ecosystem, resilience planning becomes difficult. 
 
Vendor management is evolving into a strategic discipline that sits at the intersection of risk management, cybersecurity, procurement, and compliance. 

By Kiran Viswanatha 

LinkedIn: https://www.linkedin.com/in/kiran-v-79a09630/