Boy, this theme seems to be coming up a lot these days. We are constantly talking with some percentage of our customers who are suddenly struggling with how to make their vendor management program work. By the time we finish asking them a series of questions, we are glad to know it is not because of our system but rather because their organization hasn’t yet embraced the fact that change management techniques are critical success factors for vendor management.
A common scenario is that they began to run into trouble when vendor management got passed off to a successor (an individual or a department) who is left to try and figure out how the program was originally designed to work (i.e., who is supposed to do what) and when the policies either are not clear, or aren’t being followed and no one seems to be enforcing them. Another scenario is that they find themselves struggling because vendor management is not overseen by the risk management office and is left to finance, IT or another group who does not have true enterprise authority.
Updating your vendor management program requires good change management which means not only updating your policy but communication, training, accountability, enforcement (especially when contract owners instead of a central VMO group are tasked with completing activities), and executive support. Overlooking these five essential ingredients and not giving vendor management the resources it needs (and the resources the regulators are demanding it have), is setting a course for failure.
Of course, we don’t want that to happen! If you find yourself in this situation, come and talk with us. We have a number of process diagrams, policy templates, and some really good advice and counsel from having worked with hundreds of companies that will get you back on track.