With what feels like exponential growth in the number of cloud-based solutions available over the past 5 – 10 years, organizations are now better than ever to automate business processes. Automation in some functional areas of business may seem like a no-brainer. But are there use cases for introducing automation into the process when it comes to vendor management? The answer is yes!


This article will explore the 4 vendor management activities you should automate in your vendor risk management program. Still, there are certainly many other ways in which automation improves your vendor management process.

1. Implicit Risk Level

This is one of the first things to do in the vendor risk management process. That determines the underlying risk of your vendor relationship is key to understanding how that vendor will be assessed and managed. If this risk level process is subjective, you may end up disproportionately eliminating your vendors. If the process is manual, you can waste valuable time specifying risk levels when automation can do it for you.

Vendor Risk Management System enables you to standardize your underlying risk assessment process and build automation. For example, suppose you are using a point-based question and answering an implicit risk assessment.

In that case, you can set point thresholds in your system to automatically assign an underlying risk level according to the final score of the assessment.

Even better, you can set up logic that automatically triggers a particular underlying risk level based on the answer to a question. That is, any time a vendor has access to PHI, protected health information).

2. Due Diligence Scoping

Many organizations do not have a good way to expand the scope of their due diligence questionnaire. Scoping means “right-sizing” the questionnaire according to the particular vendor that is being evaluated (that is, you would not send the 300-question information security questionnaire to your landscaping vendor).


Best-in-class vendor management systems allow you to set up workflow rules that are automated when certain questionnaires need to be launched. For example, let’s say your organization maintains three separate vendor questionnaires:
1) a corporate health assessment,
2) an information security assessment, and
3) a business continuity assessment.
Automation will allow you to enforce rules such as “Always send our Business Continuity Assessments to any vendor classified as ‘critical'”.

3. Vendor Feedback Evaluation

Evaluation process vendor responses to due diligence questionnaires can be one of the most time-intensive activities associated with vendor management. But it doesn’t have to be! If you scope out your questionnaire and send vendors only the questions, they require (#2 above) and if you introduce automation into the evaluation process, you save hours of precious time.


The best-in-class vendor management system allows you to configure “preferred responses” within your questionnaire. This means that when a seller submits a questionnaire, you will quickly identify how the seller’s response to each question corresponds to how you wanted them to answer those questions.

Some systems take this automation process a step further and automatically add pre-defined risks to queries that do not meet your organization’s response standards.

4. Continuous Monitoring of Vendors

Continuous monitoring is critical to effectively managing vendor relationships. Your job as a vendor risk manager does not stop once the vendor’s initial due diligence is complete. You should keep monitoring your vendors to identify if any new risks exist on their own.

Automation can make this a more efficient and manageable process. Many online tools, such as Argos Risk or Prevalent, constantly scan for emerging threats that you may not know. For example, you can configure this type of system to send you automatic alerts when a particular event occurs that may increase your organization’s risk exposure (such as alerts on a falling vendor financial position, vendor lawsuits, etc.)

Working on these automated alerts into your overall vendor risk management process greatly improves your ability to hedge risks.
Automation is no longer only available to large organizations with large budgets. You can start automating your vendor risk management process today. Use the tips in this article to start your automation journey!

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