What to Know About Vendor Management Policy

Having a vendor management policy ensures that you have a strong foundation for your vendor management practice and vendor risk management software.  An outline of at least five of the key steps to your vendor management process will highlight your current process and may open up areas where more steps are needed or the process needs to be tweaked.  Once you have the series of steps you take in your current vendor management process, you are able to add in fillers to the steps and create your policy.  The policy will become a procedural document that explains each step clearly in detail that can be used as a formal process for all future vendor management users to follow as a consistent company standard.

A risk management program must be methodical and organized to be effective, and having a vendor management policy in place will go a long way to making sure your risk management software is what your company needs.  Risk management allows the design of new business processes with adequate built in risk control and containment measures.  As well, risk management is constantly evolving, so all of your policies and procedures revolving around your vendor management process should also be ever changing.  This allows for the increase in complexity and to continue to challenge business to develop strong, fully comprehensive risk management solutions.

 

Risk Management

Risk management in business refers to the forecasting and evaluation of financial, legal and other negative factors together that could harm your business while identifying potential solutions or procedures to avoid or minimize their impact.  Having a risk management software that can evaluate and track third-party relationships and review the risk compliance and risk assessments for your third-party risk management framework is crucial.

Risk management software allows the design of new business processes with adequate built in risk control and containment measures.  Risk Management software is constantly evolving, so policies and procedures should be ever changing to allow for the increase in complexity and to continue to challenge businesses to develop strong, fully comprehensive risk management solutions.  It should be a way for everyone to be able to avoid detrimental business risks all together and create strong compliance management controls.

 

Risk Assessment

A risk assessment or a risk review will help you evaluate the potential risks that could arise from using a product or service from a specific company.  It is a crucial process to your ongoing monitoring and due diligence processes.  The risk assessments will give you a better understanding of each vendor and their potential vendor risk to your business.  Risk assessments give a company the ability to sort their vendors into groups based on the types of services they provide (e.g. processors, marketing, maintenance, cloud storage, etc.).  This will also provide an opportune time to get a list of all vendors from the Accounts Payable department to make sure a vendor is not missed or you are not looking into someone who is no longer providing services for your company.  Through creating a risk assessment process and evaluating risk and compliance management, each vendor is given a rating and a full assessment template has now been created for them for future assessments and compliance controls.  This creates a great foundation for all future relationships and automation into risk management solutions, ongoing risk monitoring and security controls

 

Share the Policy

The vendor management policy should be shared with everyone in the company.  This is a way to make sure that everyone is following the same policy requirements and procedures to reduce the risk of inaccurate data and duplication of services.  It will also provide a platform for everyone to know their roles when it comes to compliance and risk management.  As well, getting input from all of the subject matter experts involved in working directly with your vendors will help ensure that the policy is accurate and sets the framework for continued implementation through your risk management software.

 

Learn More

VendorInsight® is the comprehensive resource for improving your VRM program.  With its monitoring and evaluation features, outsourced vendor risk management solution in VRM Pro ™, and industry-leading automation of processes, policies and workflows, VendorInsight® provides the tools to face any risk management hurdle.  Request a demo today to learn more about how VendorInsight® VRM solution can help you manage your third-party vendor relationships, maintain compliance with regulations and meet your business objective.

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