Hurry, Get Your Vendor Risk Management Platform ASAP
Are you still relying on spreadsheets and a mess of files as your risk management process?
If so, we have some bad news: you’re making the whole process harder for yourself. Worse, that inefficiency means that essential information is slipping through the cracks.
What if we said there’s a better way to manage risks with your vendors? A vendor risk management platform isn’t just another software–it’s a tool that strengthens your entire vendor relationship. Here’s why it’s time to stop doing things the old fashioned way and invest in a successful vendor relationship.
What is Vendor Risk Management?
Vendor risk management involves managing and monitoring risks attached to third-party vendors. The premise is simple: to ensure that your vendors don’t cause disruption to your business.
Sounds simple enough, right? But implementation is where things get tricky, as many companies struggle to understand their own obligations, never mind the obligations their vendors need to uphold.
Vendor risk management is a multi-level process that involves an understanding of the risks your vendors pose, as well as what you can do to keep track of those risks and, in turn, what you can do to mitigate them.
The Life Cycle of Vendor Relationships
This is partially connected to understanding the life cycle of the vendor-client relationship. If you know where you are in the process (and where you may fall short) you can easily identify risks attached to it.
First, you identify a need for your organization. Let’s say you need database software to manage your invoices. You seek out vendors based on that need.
Next, you establish rules for the relationship, including what you both hope to get out of it.
This shifts slowly into negotiation and due diligence, the process of deciding whether a vendor is worth the trouble. Once you decide they are, you have to continue to monitor performance to ensure you’re getting what you bargained for.
While it’s easy to think risk management only comes in at the end, once the relationship is already active, the truth is that risk management is necessary at all stages. Once the relationship is active, risk management is about continuing to minimize risks and assess whether continuing the relationship is worth your while.
The Need for Better Risk Management
When a business partner is integral to your work, you want to keep track of what they do. There’s just one problem with that: many small businesses (and even some not so small businesses) rely on outdated methods to manage risk.
Stop us if this sounds familiar: endless spreadsheets, checklists, a million audit documents, one massive headache, and details lost in the cracks despite all your best efforts.
If this is the way you manage risk, you’re missing critical details. So when a vendor winds up presenting a huge risk (like the SolarWinds hack) you’re blindsided and unprepared to deal with the fallout.
Benefits of a Vendor Risk Management Platform
There’s a better way to handle vendor risk management. It starts with a basic investment to simplify your process: a single centralized platform.
You see, successful risk management is also the process of successfully managing your vendor relationships. To do that, you have to know all the relevant details, have a complete picture, and be ready to respond when the situation evolves.
Here’s how a vendor risk management platform can change your entire approach to your vendor relationship and make it that much easier to manage risk.
Single Point of Access
Picture all those disparate spreadsheets, checklists, and files. The problem with all those sources of information is that they’re all jumbled, with no way of knowing what information resides where, which version you need, or how to access it.
A vendor risk management system removes all the guesswork from your vendor relationship. Instead of wading through documents to hunt down the right version, you can instead see the whole picture from one location. That way, you can find the information you’re looking for and additional relevant information with ease.
Track Your Vendor-Client Relationship
Once all your information is centralized, it’s that much easier to keep track of the vendor-client relationship.
A business relationship like this is not intangible. That’s essential for risk management since it allows you to track a vendor’s performance through all things vendor-related. Invoices, policy agreements, legal documentation, project paperwork, deadlines–all of these things spell out how your vendor is upholding their end of the bargain.
Not only that, but they spell out your vendor’s performance over time, which is why it’s essential to view them holistically. A vendor risk management system makes it easy to highlight problem areas and identify recurring patterns to make informed decisions.
A More Disciplined Approach
Last but not least, a vendor risk management platform makes it easy to take a disciplined approach to risk management.
When you rely on scattershot risk management methods, the reality is that you’re relying on guesswork. If you never have the complete picture of your vendor relationship and the risk it poses, you’ll never be able to make informed risk decisions.
A vendor risk management system changes the game. It streamlines and centralizes the entire process so that you always know where you stand. You can easily identify errors and recurring patterns, and if a problem suddenly arises, you’ll have all the tools you need to respond quickly.
In the end, it benefits your whole business, not just your risk process but your relationship with your vendor. You’ll have the tools to communicate clearly and the essential information necessary to know what needs to be done.
The Smarter Approach to Vendor Risk Management
No business does it alone. Your work often relies on the work of other businesses to make everything run. But when those other businesses pose a risk, it can harm everything you’ve built.
Why take the chance when you could make an investment in your success? We know the power of vendor risk management, and we’re here to make the process easier than ever. Get in touch today to find out what we can do to minimize risk at your organization.