A little over 13 years ago, I was leaving MBNA America following an acquisition by Bank of America.
I really hadn’t searched for a job in nearly 20 years, so I wasn’t quite sure where to start.
I was discussing the job search process with a trusted colleague and longtime friend of mine. He gave me some of the best advice ever:
“Do your due diligence on whatever company you’re going with."
That advice has run through my head thousands of times, not just from the job search standpoint but also has been applied to my field of work.
Why That Advice for Due Diligence Is So Great
Seems like straightforward advice, right? It's perfectly simple enough for so many reasons. It helped me find the right job, and it has always helped me with vendor management. So, let's now look specifically at why due diligence is important and keep in mind how it relates to your vendor management program:
- Decision Making: Learning all that you can about a company leads to making informed choices early on. The last thing you want to do in your career or in onboarding a new vendor is to find out you really didn’t do enough homework on what the company is all about.
- Continuous Reviews: Due diligence shouldn’t be a one-time static event as it should be revisited at least on a periodic basis – or annually for your critical/high risk vendors – and, at the very minimum, well before the contract comes back up for renewal. Make sure things haven’t changed; make sure you know as much about the company now as you did way back when the contract was first negotiated. New risks can, and do, arise.
- Informed Choices: As you complete your risk assessment or learn more about the vendor, use it to better inform your next round or ongoing due diligence. Ask yourself questions like:
- What have they done well?
- What can they do better?
- Where are they falling short of your expectations?
- What have you seen about them in the news?
- Teaches you to Think Outside-the-Box: Are there things you haven't found to be to your organization’s satisfaction? Or, are you requesting specific documents with no luck? Keep requesting them and get creative on other things that can help to supplement your analysis.
Due diligence is one of the fundamentals of vendor management – along with risk assessment, ongoing monitoring, contracts and reporting – and one in which you need to excel.
Get a complete breakdown of the different vendor due diligence reports. Download the eBook.