Efficient procurement is crucial to the success of any corporate organization. Hence companies should consider strategies for effective vendor management,
Strategic vendor management (SVM) can be defined as the continuous monitoring and improvement of your vendor relationships and exchanges. Basically, if you have a vendor performing only one task, SVM asks you to have that vendor perform multiple tasks instead, allowing for cost savings and mitigated cybersecurity risks.
We should stress here that SVM refers only to vendor relationship management, and not supplier management. Both are necessary for a robust procurement function, but vendors and suppliers are not the same.
Vendors are the final step in your supply chain; they get your product to the people who want it. Suppliers are the first step, providing goods and services to you so that you can make your own products and services. You can think of vendors as sellers (hence “vending”), while suppliers as the people supplying you with what you need to be successful every day.
These crucial partnerships are fundamental to your operational ecosystem, and as such, should be given critical thought, context, and efficient procurement treatment.
Five Steps: What Is the Vendor Management Process?
First, you’ll want to do thorough market research to see who the lead players are in their industry and category. Vendors may offer scorecards showing how they compare to the competition and highlighting their best assets. Then, contact vendors for a Request for Proposal (RFP), where they’ll provide you their rate card for services or an estimate for the work needed. The right vendor will be a fit for both your needs and your budget.
It’s worth it to invest extra time in the contract management stage because your contract will guide all future interactions between you and the chosen new vendor. For cybersecurity purposes, the contract can be leveraged to mitigate risk by requiring certain best practices and NIST standards for your vendors.
Collect the paperwork needed to pay your vendor in a timely manner-and remember to always do so. This is also a good point at which to assure cybersecurity training on processes for working with your organization. (For example, asking vendors to use single-sign on (SSO) authentication.)
Pay attention to the output of your new partnerships. You’ll want to evaluate things like customer service, output, and timekeeping. Be sure to have goal KPIs that you’ve agreed on together.
Part of vendor management is deciding whether or not to renew an expiring contract, especially if it’s short-term or on a trial basis. Thorough vendor performance management can help make that decision simple.
This step is two-pronged. You’ll need to set up fail-safe procedures if the vendor fails to deliver per the terms of the contract. Additionally, you should perform a basic cyber risk assessment on your vendor and its networks to mitigate the risk of events like a data breach, lack of compliance, or instances of malware.
Remember that risk management isn’t only for your company; it’s for the vendor as well. Set this expectation as a win-win situation to help smooth things into a long-term relationship.
Make ZenGRC Part of Your Vendor Management Strategy
ZenGRC helps you manage your potential risks within your information security ecosystem, including strategic vendor management.
You can create a more efficient, less manual, risk-based approach to third- and fourth-party vendor management with questionnaires. Use ZenGRC’s tools to define actions for specific questions and assure issues are addressed for you and the stakeholders.
You can also implement business questionnaires, which are an efficient way of gathering documentation from your vendors. Use the weighing scale feature to apply a risk score to each vendor within your organization, helping you prioritize the high-risk business relationships in your supply chain.
Worry-free GRC is the Zen way! Schedule a demo of ZenGRC today.