Automating Vendor Risk Mitigation in a World Reshaped by COVID-19
April 2, 2021
By Stacie Mosley, Market Development Manager
Making the business case to outsource is rarely easy. Among the concerns leaders and their boards often have is the level of risk that gets introduced to the business when partnering with a third-party.
A great deal of the risk assessment involved with third-party engagements happens at the front end, when the business is evaluating multiple vendors for a particular service. Prior to presenting the best option to final decision-makers, leaders performing the evaluation must answer a long (and growing) list of questions internally.
These include things like how much of an investment the partnership will entail, if and how the prospective partner will handle personally identifiable information (PII) and whether the partner has a good reputation with various stakeholder groups.
It’s a lengthy, often overly complicated, ordeal. But, here’s the great news for the professionals charged with evaluating potential vendors. The entire process can be made much simpler through the use of robust vendor management technology.
Tech Empowers Pros to Organize, Compare and Choose Vendors with Confidence
Particularly when it’s configurable to an organization’s specific needs, vendor management software helps organize the findings of an organization’s vendor pre-screening. With all the answers from multiple vendors in one place, organizations have a simple, visual way to compare the options.
What’s more, automation software like the ViClarity platform ensures consistency across vendor evaluations, making sure no inquiries are overlooked. This allows for true apples-to-apples comparisons and a way to show (rather than simply tell) the board and other decision-makers that a comprehensive internal evaluation was performed prior to making the ultimate vendor recommendation.
Accepting Risk is Only the Beginning. Then Comes Managing It.
Getting decision-makers to approve a new partner is merely the start of vendor management. Once the risks of the new partnership are fully communicated and accepted, the business must then manage that risk. Here again, technology can be an invaluable asset.
Beginning with onboarding of an approved service provider, cloud-based vendor management software can make tasks like completed due diligence questionnaires much smoother.
Anyone who’s led a project like this will recognize the painstaking traditional process:
- Find and email the spreadsheet-based questionnaire to the vendor.
- Wait for the vendor to complete the 800-line item document, a task made harder by the fact that typing long-form answers into an Excel field is far from intuitive.
- Download multiple attachments when the questionnaire comes back along with myriad supporting documents in a variety of formats.
- Digest, upload, organize and share all the files for storage internally.
- Set a calendar reminder to do it all again in 12 months.
Now multiply that process by every vendor the organization relies on to provide a terrific experience for its employees and customers. When you consider that 70 percent of organizations utilize vendors for at least a third of their business critical services, you can imagine how sizable that number can get, even for smaller organizations.
With the assistance of a cloud-based tool, each of the above steps is automated. And, all documentation is kept in one place, findable by users on both sides of the relationship based on customizable access levels. The results are far fewer headaches, a much more efficient and smarter workflow, and importantly, a dramatically shortened onboarding window.
Vendor Risk Mitigation is More Important Today than Ever
The world is a much different place than it was just over a year ago. A huge part of knowing your business can continue through the next inevitable period of disruption is having a robust vendor management program as part of your overall business continuity strategy.
Ultimately, the use of technology to improve the various aspects of vendor management is all about effective risk mitigation and preparation for the future.
If you’d like to learn more, check out our webinar, which shows how automation software can help your teams navigate a business environment forever altered by COVID-19. Although this particular event was hosted for insurance professionals, the takeaways apply to any organization looking to improve its vendor risk mitigation capabilities for the new world.
Services performed by ViClarity are compliance and not legal in nature, and do not form an attorney-client relationship or any of the protections attendant to the attorney-client relationship.