7 Reasons Why You Shouldn’t Use Spreadsheets for Vendor Risk Management
Spreadsheets just don't cut it anymore.
With the increase in regulations and vendor oversight requirements, managing your vendors with a spreadsheet will prove to be very inefficient. Here are 7 reasons why spreadsheets will not cut it anymore, especially in 2019.
Welcome to this week’s Third Party Thursday! My name is Kelly Vick and I’m the President here at Venminder.
In today’s session, we’re going to discuss the reasons why Excel spreadsheets will no longer suffice in 2019.
It’s safe to say that spreadsheets – and Word documents and Access databases, for that matter – became an archaic approach to vendor management long before this year. With the increase in regulations and vendor oversight requirements, managing your vendors with a spreadsheet will prove to be very inefficient. Here are 7 reasons why spreadsheets will not cut it anymore, especially in 2019.
- First and foremost, automation. Spreadsheets are stagnant, making it difficult to create the automation that your vendor management team needs in order to effectively manage their vendor relationships. Examiners are looking for a program that has the following in place:
- Automated contract management and due diligence alerting when documents are nearing expiration and need updated
- The ability to assign tasks and monitor the progress
- And comprehensive assessments, such as risk and performance assessments
- There is more room for error. It’s easy to miss a key date – like a contract renewal – when only utilizing spreadsheets to manage vendors.
- It’s challenging to produce high quality and board level reports. With Excel, you’re likely relying on ad-hoc reports. With a more automated approach, you can create customized and robust reports that accurately show concerns and results. This will help you meet your board and examiner’s reporting expectations.
- At this point, your regulator is expecting to see a more organized vendor management program. Consider OCC Bulletin 2013-29 – the gold standard. Even if the OCC is not your prudential regulator, it’s likely that you’ve reviewed and begun implementing their recommendations and lifecycle approach into your vendor management program. It’s difficult to effectively take a vendor from the initial planning phase, then through vetting, negotiation, ongoing monitoring and, ultimately, to termination or renewal, with only a spreadsheet.
- There is a lack in efficiency. With spreadsheets there is often no workflow or a streamlined process.
- It’s difficult to oversee and make mass vendor changes. When you’re managing hundreds, maybe even thousands, of vendors it’s a very labor-intensive process to have to manually comb through each vendor in the spreadsheet one-by-one to simply implement a policy change.
- You’ll need more staff. With the many Excel limitations, you likely need to hire more vendor management staff to actively manage your program. This can become more costly than budgeting for a software to assist with efficiency.
It’s our hope that in 2019 your organization is considering your vendor management program processes and the effectiveness. If the process doesn’t seem as seamless as it should, now is the time to seek out other options.
Again, I’m Kelly Vick and thanks for tuning in to this week’s Third Party Thursday; if you haven’t already done so, please subscribe to our series.
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