As we continue to work in uncertain times, each company needs to continually assess its overall operations to find out how best to prepare for both best-case and worst-case outcomes. This is especially true for your vendor management program.
Many companies invest 50% or more of their capital with external vendors and third parties. Thus it’s necessary to have a correctly structured and resourceful vendor management program to reduce risk and ensure regulatory compliance.
As you think of how best to operate a vendor management program, it is essential to find out whether it makes sense to resource your program internally or consider some or all of your vendor management program as a proven Outsources provider with an approach and dedicated subject matter experts.
When used effectively, outsourcing can be a way to optimize your cost and operational performance. You also need to access dedicated subject matter experts who provide best practice approaches to vendor management.
There are a few key things your retail business should consider. Especially when determining whether an outsourced managed service solution can bring value for your company:
Does the solution fit the needs of your team and resources? The proposed managed solution allows you to free up your employees by:
That allows them to handle other activities while trusting that the managed service provider will provide you with the necessary service and will provide the result.
subject matter expertise
You need to ensure that the managed solution is designed and resourced by a team of subject matter experts with an appropriate mix of technical expertise and industry expertise. They’ll help provide you with the results and best practice recommendations you need to achieve your objectives. Can go
Does your solution let the provider operate efficiently and effectively? Can you integrate your existing systems with the provider’s systems? Are you looking to gain access to the data and report you need to maintain your monitoring responsibilities?
Can the vendor meet your unexpected demands and align with your business growth plans?
If you’re not clear whether outsourcing is right for you, consider the following as key indicators that outsourcing some of your vendor management plans is something you should consider:
If reducing costs is a priority for your company, in many cases outsourcing your due diligence, such as vendor risk management activity. That can save you on costs because you are paying a fee for the specific work that is complete. The loaded overhead may not be fully utilized.
Streamline your vendor management functions, freeing your internal employees. That helps them focus on their core capabilities rather than being distracted by a series of ancillary activities that may not align with their skill set.
Working with an external managed service vendor enables you to work with a resource that specializes in specific things such as due diligence, procurement, or contract management. That way, your team can focus on day-to-day, more strategic activities.
Outsourcing is an excellent idea when you want to update your program and implement industry best practices. You get all the other benefits we discussed above. You have constant access to industry best practices because your provider can actively bring you the trends they are experiencing in their work with their other clients.
Finally, outsourcing some aspects of your vendor management program can be worthwhile on several fronts. It can send a message to your employees, executives, board members, and investors.
This way you take your responsibilities seriously to reduce third-party risk, optimize your operating costs, ensure regulatory compliance, and strive for excellence.