He’s making a list, he’s checking it twice, is your vendor naughty or nice? The regulators are comin’ to town…
You probably don’t want me singing Christmas carols, but I can offer a few ideas on how to tell if your vendors are naughty or nice.
Vendors You May Want to Replace
Naughty vendors come in all shapes and sizes. You may want to give them a lump of coal if any of these descriptions are appropriate for your vendor:
- Their business decisions clash with your company’s strategic goals — This will hold you back and disrupt those goals.
- They “push back” on even routine requests — By refusing to provide appropriate documentation, such as financial reports, business continuity plans, etc., you aren’t going to know where they stand and, therefore, how much ongoing risk they are posing. They may be trying to hide something or don’t care to respect your business relationship.
- They’ve grown non-responsive — You can’t sit around waiting for something bad to happen.
- They miss deadlines — If they miss their deadlines, it makes it harder for you to meet yours and causing unneeded stress.
- They fail to provide regular reports or updates — Again, you need to know where you stand otherwise you’re left in the dark and waiting for something bad to happen.
- They have a poor reputation and lots of complaints — If other people question their operation, you should too.
With these vendors, you may want to explore potential replacements. If they are difficult to work with, they will negatively affect your day-to-day business and expose you to additional risk.
Vendors to Keep
Nice vendors meanwhile also have some routine characteristics:
- Their business decisions are in line with your strategic goals — Allows for your goals to be met and success achieved.
- Happy to hear from you or at least pleasant to interact with — You receive what you need and can stay on the same page.
- Promptly respond to concerns — They value your business relationship and keep you in the loop so you can properly handle situations.
- Meet their contractual obligations — You’re getting what you agreed upon.
- Provide due diligence items in a timely manner — You’re able to keep your records up-to-date and their risk standing in check without additional stress.
- They have a good reputation — In addition to everything else, if there's no negative press or lots of complaints about them then they're likely running a good operation and there are no immediate concerns of whether you'll run into issues with them.
These vendors positively affect your vendor management program and allow you to effectively manage your risk.
We hope your holidays are happy and healthy with lots of nice vendors to be thankful for.
For information on how to classify your vendors, download our helpful infographic.