Chances are you would not only like someone to help you get the work done but also help you raise your vendor management game. Will they further your vendor management education? Are your priorities their priorities? Do they deliver what they promise...on time? Do they keep up with regulatory changes and adapt their products and services accordingly? There’s any number of questions you should ask yourself when shopping for the right vendor management provider.
Let’s dive in to a few of the most important issues you should consider...
1. Understand your own strengths and weaknesses
Build out a list of requirements. Where do you start? With your own strengths and weaknesses. Why? Ultimately, your strengths should go no higher on your priority list than “nice to have”. But your weaknesses, those fall into the “have to have” category.
Here are some examples of some strengths and weaknesses...
Example #1: You have your arms wrapped around your vendor contracts, they are neatly organized and easily accessible to anyone, you have a reliable system that notifies you when a contract is approaching a renewal date and you always negotiate for better price and terms at each renewal period, then you probably don’t need a provider who specializes in vendor contracts. But if your contracts are scattered all over the institution, you’ve missed one or more critical auto renewal dates and your last negotiation was...(well, you don’t remember the last time you negotiated with that vendor) then you should place contract management in your weakness column and place that discipline on your must have list.
Example #2: You know what the tasks are but the days are ever so busy. You have good intentions of not procrastinating this year but before you know it it’s exam time again and you’re rushing around trying to prepare. Look for a provider with a strong task management system. The right software will define the vendor oversight tasks, send you reminders and record the results. All of that work should also roll up into great reports for Senior Management and the Board.
Example #3: You are a vendor management staff of one. Just chasing down all the correct due diligence documentation from your vendors seems like an overwhelming task. Never mind finding the right resources to help you analyze it. Find a provider that not only provides a great software platform but can also help you with the tactical workload.
Example #4: Your CFO reads and analyzes 150 page 10K’s like they're the latest great novel. Check, got that covered. But when you look for someone who understands all the geek speak in a SOC report, the room quickly clears. Find a provider that is flexible. You should never have to spend precious budget dollars on things you don’t need just because it’s included in the package. The right vendor will match your needs with their resources and only ask you to pay for what you need: nothing more.
2. Set a (realistic) budget
Once you went through the cost justification exercise, you will quickly realize the necessary qualifications won’t come free. There’s every reason to believe you can get what you need at a price you can afford but you also need to be realistic and budget a fair amount for the work that will be performed and the value you will receive. But, here’s the good news. You don’t have to cover your entire wish list on day 1. Find a vendor that has everything you believe you will need today, next year and beyond. Then buy what you can afford today with the comfort of knowing the rest is available as your budget dollars allow. And don’t forget to practice good vendor management skills: NEGOTIATE!
3. What are the qualifications of the various providers?
Be sure to ask who will be performing the work and for their qualifications. Yes, anyone can “read” a SOC report (by the way, you could have done that) but are they qualified to tell you what you need to know? Remember, many times what is not in a SOC report is just as important as what is. Here’s are a few helpful tips: how much operating experience does the provider have? Have they ever sat on the other side of the table from examiners? How much capital do they dedicate to product development? Ask for examples of their work product. Show it to your auditors, heck show it to your examiners and ask for their opinion. Compare that to the work product of other providers. You’re hiring expertise. Be sure you get it.
4. What do others (including examiners) have to say about them?
Of course you’ll ask for references. We all do that. But no provider is going to give you a bad reference. You want to talk to the clients they didn’t tell you about. Check with your connections on Linkedin or call a few folks in a peer group to see if any of them have experience with a particular provider. Also, ask your examiners if they have seen the work products from various providers. By law, they can’t recommend one provider over another but I feel sure they will give you an opinion if you ask about a specific provider. After all, they really do want to see you succeed. And you’ll make their life easier if you hire the right help.
5. Do Proper Due Diligence
Finally, don’t forget to do the rest of your proper due diligence on your vendor management provider. The right provider will not only have a due diligence package ready pre-contract but should set the example for good vendor behavior throughout the life of your relationship.