What mechanism helps mitigate risks from using a third-party vendor for critical applications?

A software escrow agreement serves as a mechanism to mitigate risks associated with relying on a third-party vendor for critical applications because it ensures that the source code and other essential components of the software are held by a neutral third party. In the event that the vendor fails to maintain the software, goes out of business, or becomes otherwise unavailable, the organization can access the source code and continue to operate or modify the application as needed. This reduces the risk of vendor lock-in and provides a safety net for maintaining business continuity.

While confidentiality agreements, viability studies, and performance evaluations are valuable risk management practices, they primarily address aspects related to trust, vendor reliability, and performance outcomes rather than ensuring access to the necessary software to continue operations. A software escrow agreement provides a tangible remedy in case a critical dependency on the vendor becomes untenable, making it the most relevant mechanism for managing risks in this context.