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Take a Phased Approach to Kick Start a New Vendor Management Program

Launching a structured vendor management program doesn’t happen overnight.  And it can be easy to get overwhelmed with the process. That’s why it’s so important to take a risk-based, phased approach to getting a new program up and running.  It allows you to get the basics in place in short order, and get some quick wins under your belt.

When we help a client get a new program up and running, we tackle it in three phases.  Phase 1 focuses on getting the fundamentals in place – the building blocks for the program.  Phase 2 focuses on getting the program operationalized quickly by focusing on the riskiest vendors first.  And Phase 3 provides opportunities to expand and mature the program over time.

Here is an overview of each phase.

Phase 1: Establish Your Foundation

Start by establishing your fundamentals with support from senior leadership. This ensures alignment and the right tone-from-the-top.

  • Develop your policy
  • Inventory your vendors to determine who’s in scope
  • Identify stakeholders and clarify roles and responsibilities
  • Create your core assessment tools such as your inherent risk and due diligence questionnaires

Phase 2: Get Traction and Some Quick Wins

With your fundamentals in place, get traction by beginning to assess your most critical and riskiest vendors.

  • Risk assess and categorize vendors into risk tiers
  • Start conducting due diligence with your highest-risk vendors
  • Begin tracking and remediating issues you identify
  • Start with some basic monitoring activities around performance, information security, business continuity and financial health.
  • Rinse and repeat with the rest of your vendors, starting with the next riskiest group and working your way down

Phase 3: Create a Roadmap to Mature Your Program

Finally, once you are doing the basics consistently, create a path for enhancing and maturing your program. These can include:

  • Developing contingency plans for critical vendors
  • Identifying and assess 4th parties
  • Creating standards for contracting, termination and of‑boarding
  • Auditing contracts and consolidate spend with fewer vendors
  • Assessing concentration and geographic risk

If you’re committed, you can build your foundation and start managing those high-risk vendors in 90 days or less.

Getting a new program up and running?  Download our guide on How to Kick Start your Vendor Management Program.  It provides a practical guide for getting your program up and running in as little as 90 days.

 

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