Vendor’s corporate health has never been more important than now. With the crushing blow of the global pandemic, all companies are facing supply chain challenges to ensure the viability of their vendors ability to meet contracted service requirements. The world of existing on annual “point in time” due diligence is gone forever.
Enter a new era of continuous monitoring as a critical component of the due diligence process. Mixing questionnaire based assessments and ongoing monitoring tools like that of our partner, Argos Risk, a leading provider of corporate health monitoring solutions, is the new norm the industry is adapting to. We are actively helping our clients to migrate their programs to include data intelligence monitoring tools. This ensures you have the most current actionable intelligence to proactively mitigate risk and optimize performance of your vendors.
When looking a assessing your vendor to mitigate risk, your vendor’s corporate health is a vital component along with InfoSec and regulatory compliance. As the old adage goes, “A day is a week, a week is a month and a month is a year”, the corporate health of a vendor can change in a day, a week or a month so just completing one annual assessment puts your company at undue risk of vendor disruptions and failures.
Here are 3 Key Performance Indicators of Corporate Health that all vendor management programs should include:
1. Credit and Financial Viability
Ongoing monitoring of critical financial health metrics like:
- Credit information such as high credit offered, avg credit offered, # of trade experiences with slow/short pay
- Likelihood of consistent payment
- Estimated days beyond terms
- Industry days beyond terms (Comparative metric to see how your vendor is performing vs their industry
2. Material Event Alerts
Receiving daily alerts about the material events that have occurred with your vendors such as:
- Public filings like lawsuits, liens or judgements
- Regulatory compliance checks like OFAC and FinCen
- Events like mergers/acquisitions, corporate layoffs, sale of assets or FEMA notices
3. Geographical Risk Factors
Monitoring individual vendors and your entire vendor portfolio for important risk factors like:
- Regional Population levels
- Regional Unemployment rates
- Regional Personal Income
- Regional Natural Disasters
Adding this important corporate health monitoring to your due diligence process would be very time consuming and challenging to implement and maintain if you were to attempt to do it yourself. That is why the emergence of new web-based data intelligence tools, like our technology partner, Argos Risk
One of our technology partners, Argos Risk, has created a very cost-effective and streamlined solution that incorporates some very important things to consider when selecting a corporate health monitoring solution such as:
32 Million+ Businesses Actively Monitored
Access to information for publicly traded, privately held and over 20 million SMB’s.
Daily Monitoring of Material Events
Automated daily alerts on material events that can negatively impact the corporate health and viability of your vendors.
AR Surveillance™ DASHBOARD
The central hub for monitored companies.
- Easily monitor your third-party portfolio
- Access your third-party relationships with color-coded risk scores
- Stay informed of material events with daily alerts
- Daily updates provide the equivalent of 365 credit reports each year
- Quadrant Risk Analysis provides a visual overview of your portfolio risk
Individual Company Report
- Key Metrics related to a company’s overall viability
- 180-day trending information in key financial performance metrics
- Public Information on judgments, liens, suits and CFPB Complaints
- Validated vendor diversity information including minority and woman owned indicators
- Company demographic information
Geographic Risk Factors for use in your Business Continuity Planning
- Gross Metro Product
- Natural Disasters
As you look to mature your due diligence process and consider adding corporate health monitoring, here are the third-party risk and due diligence services we can offer you, https://vendorcentric.com/services/third-party-risk-management/. We are here to help!!
Author: Paul Schrantz
Job Title: Director of Business Development & Client Success
Organization: Vendor Centric