Your time is valuable, and chasing down vendor information is time consuming, expensive, and often never gets done. With increased outsourcing of critical business functions, 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. This means that every institution is bearing the full brunt of the cost to meet regulatory requirements for vendor 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 capabilities to consider 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 and provide easier access to the data.
2. User-Friendly and Customizable
Managing multiple vendors can be overwhelming and each vendor is unique. Keep in mind that there is no one-size-fits-all approach to third-party risk management. Recognize that vendor management solutions vary in terms of resources and structure and their ability to match management models 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. Ongoing due diligence processes for existing vendors consider 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 vendor by using multiple variables to determine overall risk.
4. Integration Between Business Continuity and Enterprise Risk Management
Integrating data across your risk management platform can be very beneficial, as it reduces redundancy and increases efficiency.
5. Compliance With All Regulatory Requirements
There are many contract management and vendor management software programs available, from ad-hoc software (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.