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7 Things That Can Happen If You Don't Prioritize Vendor Management

Mar 3, 2020 by Branan Cooper

Many things can happen if you don’t prioritize vendor risk management. Unfortunately, none of the things that can happen to your organization and program due to lack of prioritization are positive. There are real negative consequences.

7 Reasons Why You Need to Prioritize Vendor Risk Management

Here are seven reasons that you should be aware of:

  1. You invite peril into your organization by increasing the likelihood of data breaches, lack of preparation for disasters, reputational hits because of customer complaints and more.

  2. You create inconsistencies across the organization as no one will be on the same page since vendor risk management isn’t a priority. Confusion on processes will arise often.

  3. Auditors and examiners will notice there’s a problem as it doesn’t take much to be able to see when an organization is simply checking the box instead of thoroughly analyzing their vendors.

  4. You’re increasing the chances that significant vendor risk will go unnoticed for much longer than it should – or worse, until it’s too late or indefinitely.

  5. The teams who you rely on will follow suit and won’t prioritize managing their vendors either as if there’s no emphasis on the importance of vendor risk management then no one will realize that they need to prioritize it. And, this will lead to inadequate support.

  6. You’ll miss critical vendor dates like contract renewals which can cause your organization to spend a lot of money that they weren’t planning to spend. This will result in a frustrated senior management team and board.

  7. Your vendor due diligence will go stale because vendor risk management is a constant responsibility that needs to be maintained. If it’s not a priority, it’s inevitable that due diligence will fall out of compliance and become outdated.

As you can see, there’s a lot that can quickly go wrong if you push vendor risk management to the side. Once you start digging that hole, it’s very difficult to get out. Don’t wait another day or even another minute. Now is the time to prioritize vendor risk management.

Learn if your vendor management program is adequate and has the right elements. Download the eBook. vendor management program adequacy

Branan Cooper

Written by Branan Cooper

Branan Cooper is the Chief Risk Officer at Venminder. Branan has nearly 30 years of experience in the financial services industry with a focus on the management of operational and regulatory processes and controls—most notably in the area of third party risk and operational compliance. Branan leads the Venminder delivery team as the third party risk management subject matter expert in residence. Branan also serves as an industry thought leader. He's a member of InfraGard and the Professional Risk Management Industry Association (PRMIA). And, he was selected in 2018 as an advisor to the Center for Financial Professionals (CEFPro) and board member for the Global Sourcing Resource Network (GSRN).

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