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Vendor Management: A Successful Recipe for a Critical Vendor Review

Jul 18, 2013 by C. Michael Bowers

As I talk to financial institution management I find that most adopt my old habit of quick not great. The amount of time most vendor managers spend on their annual reviews of critical vendors is less than one hour. (You can’t marinate a steak in that short of time!)

The examiners take vendor management seriously (see previous blogs) and as the leader in your organization for due diligence, I know you realize this as well. There is nothing more daunting than a group of hungry guests (ready examiners) just waiting to critique your culinary skills.

It does take time and effort to thoroughly understand and evaluate your critical vendors. Don’t short change your organization’s health and image by just throwing something on the grill.

Recipe: Critical Vendor

This is perfect for any Critical Vendor Chef (a.k.a. manager) even if you don’t have a lot of experience.

Prep Time: 3 hours
Cook Time: 45 minutes
Total Time: 3 hours and 45 minutes
Yield: Serves 1 thousand plus customers
Utensils needed: Knowledgeable team members

Ingredients:

  • Current contract plus amendments
  • Contract terms
  • Gather and review notes from conversations with vendor during previous 12 months
  • Did they deliver on their promises
  • Were there any product upgrades in the last 12 months
  • What has the vendor done well
  • Where is there room for improvement
  • Were there any service issues
  • How have they performed against contractual SLAs
  • Gather opinions from others within my organization
  • Financial statement review
  • IT audit review
  • Disaster recovery test review
  • Regulatory action review
  • Policy review
  • Insurance coverage
  • 1/4 teaspoon salt and black pepper (just to spice things up)


Bon Appetite!

Critical Risk Vendors What to Review Infographic

C. Michael Bowers

Written by C. Michael Bowers

Starting his career as a commercial banker he developed a clear perception for the financial requirements that drive performance and an appreciation for the nuances of management teams.

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