The Importance of Educating Your Vendor Managers

An effective third-party risk management program involves more than a policy or framework. It requires the knowledge and participation of all relevant stakeholders, especially vendor managers. For an organization to successfully manage its third-party risk, vendor managers must first understand the importance of third-party risk management and be adequately trained to execute the necessary processes.

The Importance of Vendor Managers

Expertise is crucial to managing third-party risk effectively. Managing these risks requires insight and understanding of the modern third-party risk landscape while simultaneously identifying each vendor's risks to your organization. Still, attaining the right knowledge to manage these risks can sometimes seem daunting.

Vendor managers, also known as third-party owners or vendor owners, are indispensable in third-party risk management due to their position as influential leaders and subject matter experts. Vendor managers maintain key knowledge of the vendor's inner workings, including habits, performance, contractual terms, and history. Vendor managers can use this knowledge to provide an important perspective regarding their vendors. Their insider knowledge will help to identify the right business goals and objectives and anticipate possible risks.

To build a strong working relationship with your vendor managers, it's important to maintain regular communication and educate them. Proactive collaboration with your vendor managers enables the setting of clear goals while building trust and increasing efficiency, reducing stress for your organization and your vendors.

Why Educating Your Vendor Managers Is a Must

Like your policies and software, your vendor manager is yet another essential tool in your framework for managing vendor risk. However, unlike other tools, you need to build trust with your vendor manager to be able to fully realize your working relationship.
Vendor managers may seem difficult to work with sometimes, but this is because you aren't on the same page. Without proper communication, the relationship won't succeed – and that's where education comes into play.

Education is essential to find common ground. Without proper explanations, your vendor manager may not understand why they're being asked to perform certain tasks or how to execute them. This could lead to misunderstandings and an even greater sense of disorganization.

When working with your vendor managers, you should communicate the following points:

• Why third-party risk management is so important to your organization. Educate your vendor managers about the value of third-party risk management not only for the organization but also for their own professional success. This can be achieved by explaining different vendor risks, the vendor manager's role in maintaining the program, and the processes used in the TPRM framework. By breaking down the key concepts and opening a discussion about the importance of mitigating risks, you and your vendor managers can take a more strategic approach to risk management.
• How you perform third-party risk management tasks. There are many third-party risk management tasks to be performed. Your vendor managers will feel more confident in their ability to execute these activities if you provide them with detailed instructions, including the order of activities, inputs, outputs, timing, and quality expectations. To do this, you should help your vendor manager understand each step of the third-party risk management lifecycle and provide examples of key tasks they will need to perform during each stage. Communication and responsiveness will be enhanced if the vendor manager clearly understands how products and services are evaluated and their role in that process.
  
  

To achieve success for your organization, you must keep in mind that third-party risk management is all part of a coordinated effort. When it comes to third-party risk management, bolstering communication, educating vendor managers, and providing assistance are worthwhile investments for long-term success.