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.


Share This Article

Stay Connected

Level Up Your Game
Build stronger vendor relationships, reduce risk, and improve your bottom line.

More on This Topic

Related Posts