7 Key Components of a Good Vendor Management Program

Video Transcript

Welcome to this week’s Third Party Thursday! My name is Branan Cooper and I’m the Chief Risk Officer here at Venminder.

In this segment, we’re going to cover the 7 components of a good vendor management program. Here we go...

1. Recognition that vendor management is NOT a check box activity. You have to take on the lifecycle approach. While you can use checklists to help you, the process of each stage of the lifecycle should be ongoing.
2. Board approved vendor management policy. You should have a detailed and thorough vendor management policy, program and procedures. We have a great resource to help you write those too, find our Umbrella infographic series in our Resources Library.
3. Executive staff who understand the importance of assessing and managing risk. It's key that senior management and the board are involved and support the quest of managing third party risk.
4. Execution of well-defined processes to onboard new vendors and manage existing vendors. Make sure you're on the same page with your vendors and catch them if they do things you don't like.
5. Adequate budget relevant to size to do the job. It's very common that teams aren't given enough budget for vendor management. It's not good. Vendor management is very important to the safety and success of the financial institution or company so skimping on resources will not end well.
6. Software tools to organize, manage, track and report. Having tools, better yet automated tools, can make a world of difference to your vendor management program. It will save time and make everything much more efficient to manage.
7. Software tools to organize, manage, track and report. Having tools, better yet automated tools, can make a world of difference to your vendor management program. It will save time and make everything much more efficient to manage.

So, to recap… don't treat vendor management purely as check the box activity, get your policy approved by the board, make sure executive staff understand and updated, document onboarding processes, obtain adequate budget, software tools and access to qualified resources.

Again, I'm Branan and thank you for watching! If you haven’t already, please subscribe to the Third Party Thursday series.