Your time is valuable and chasing down vendor information is time consuming, expensive, and often never gets done. With increased in outsourcing of critical business functions, the chances are your institution shares critical vendors with other institutions. Regulators and auditors are increasingly focusing more on how vendors and contracts are managed and maintained by institutions. This means that every institution is bearing the full brunt of the cost to meet regulatory requirements for vendor’s due diligence. It is more critical than ever to make your vendor management implementations easier, faster, more secure and cost effective. What are some of the things to look for in choosing comprehensive VM software? Below are a few tips that will guide you in choosing the right solutions for your organization.
1. Centralized Vendor Information
Managing vendors’ information (contact information, financials, contracts, insurance certificates, etc.) is important in the success of your organization. Many organizations simply rely on filing cabinets, spreadsheets, and word processing software to manage their vendor relationships. However, these methods are time consuming and no longer meet growing requirements from auditors, government agencies, customers, and investors. Look for a solution that can provide a comprehensive and centralized application. This will help your organization to avoid data redundancy as well as providing easier access to the data.
2. User-friendly and Customizable
Managing multiple vendors can be overwhelming and add to that, each vendor is unique. Keep in mind that no one-size-fits-all. Recognize that vendor management models vary in terms of resources and structure, and to match the vendor’s management model to meet organizational needs. Choosing the right VM solution can play a big part in ensuring success. Having a user-friendly and customizable platform can give you not only at-a-glance information but also the ability to modify the solution to fit each vendor’s needs.
3. Ability to Manage Vendor Risk Efficiently
Due diligence requires investigation into a vendor’s ability to meet the requirements of the proposed service and an inquiry into the vendor’s financial ability to deliver its promise. On-going due diligence process for existing vendors considers the following areas: financial, information security, business continuity, human resources, legal, compliance, operational performance, and reputation. A good VM solution should give you the ability to perform due diligence and score each vendors by using multiple variables to determine the overall risk of each vendor.
4. Integrating Business Continuity and Enterprise Risk Management
Integrating data across the platform can be very beneficial for the organization, as it reduces unnecessary redundancy as well as more time-efficient.
5. Comply With All Regulatory Requirements
There are many contract management and vendor management software programs available from ad-hoc software tools (MS Word and MS Excel) to robust, fully-integrated solutions provided by dedicated software vendors. However, few are designed to meet specific regulatory requirements (NCUA/FDIC/OTS/OCC). Good VM software should be able to organize and generate management reports for review and compliance examinations.