Does your company rely on multiple third party vendors to achieve maximum efficiency in its day-to-day operations? How would you rate your company’s diligence in accepting and monitoring your third party vendors?
Dean Dorton can assess your risks around third party vendor management. One recent client project identified substantial overspending, which was corrected with significant savings. We’ve found that all companies should rate their vendors to allow for appropriate monitoring programs, as well as employ data analytics to monitor third party performance.
Fundamental vendor questions that your company should address
- Have the key vendors been identified?
- Does a complete inventory of all third party agreements exist?
- Are the key terms of each third party agreement being followed?
- Does an internal contact person exist for each agreement?
- How often does the contact person visit the third party?
- Has management reviewed the vendor master file and updatedit accordingly?
- Does a vendor acceptance policy exist and is it being followed?
- Do any of the third parties have access to the company’s network?
- Do any of the third parties spend time on company property?
- Do any vendors have access to company systems?
Common outsourced business operations that increase risk
- Payroll and employee benefits
- Legal support
- Call center operations
- Data center
- Cloud services
- Software or hardware partners
- Offshore manufacturing
- Offsite storage
- Software development
Benefits of an active vendor management program
- Regulatory compliance
- Safeguarding of data
- Adherence to contract terms
- Timely identification of potential conflicts of interest
- Effective bidding
- Fraud reduction
- Protect reputation
- Effective use of data analytics to identify trends and help with vendor selection
- Identify opportunities to consolidate vendors
- Procurement cost reductions
- Enhanced vendor performance by the regular reviews
Please contact Bill Kohm at email@example.com if you would like to establish a VMP.