Business owners in the past could issue payments, update contact details, and successfully manage their vendors. Times have changed; business owners today must consider risk management, regulatory compliance, and cybersecurity when handling vendors. They need a vendor management strategy that can adapt to emerging threats, new technologies, and expectations.
Preparing for the Future
To strategically prepare for the future, every business needs a vendor management system. This system should address emerging risks and adapt to changing requirements without the need for continuous rebuilding. The system establishes a foundation that can adapt over time. When the system is in place, the correct technologies and people will be in place to support risk-aware practices.
People First
Any vendor management strategy won’t be successful if a team is not in place to implement and oversee it. Onboarding and managing vendors requires the help of several departments. The procurement team, accounts payable staff, compliance department, IT specialists, and legal team all play a role in the strategy. However, they can’t do their job successfully if they don’t understand which tasks are owned by whom. Every person in the department needs clear ownership of their responsibilities.
A vendor management system assigns specific roles and responsibilities across all aspects of the vendor life cycle. Cross-functional stakeholders must be aligned for a robust risk profile. Furthermore, when these roles and responsibilities are understood, there is less friction in the workplace, so all roles and responsibilities must be documented and available for employees to refer to,
Risk Awareness Culture
Every business owner is concerned about human error. They understand that their employees may fall victim to a social engineering attack or an invoice fraud scheme. To reduce the risk of this happening, employers must ensure all workers undergo regular training and participate in awareness programs. This training is designed to ensure they understand the importance of each step in a workflow and the risks associated with not following it. With this knowledge, employees can recognize anomalies and inform the appropriate members of the management team about what they have observed.
Internal Communication
Internal communication is also essential, as vendors often interact with multiple departments. Shared communication channels ensure everyone is on the same page. Workers in different departments learn to trust one another. Furthermore, when two individuals handle the same task, it can lead to waste and decreased productivity.
Vendor Partnerships
Vendors should be treated as partners. They will not appreciate redundant paperwork, delays, and miscommunications. The business owner must streamline the experience and establish clear expectations for all parties. Doing so builds trust with vendors.
See also: Amazon Alexa June Aipowered Businessinsider
Creating Effective Workflows
When the right people are in place, the focus turns to improving vendor management processes. To do so, the business owner must audit their current workflow and determine where problems lie. They must create a standardized and consistent vendor management policy that integrates risk controls.
Regulatory Compliance
Every business must comply with regulations regarding vendor relationships. Every step of the vendor management process must be documented in detail, and logs must be kept. When records are centralized, a company has no concerns when they are audited. They have everything they need to support the actions that have been taken.
Vendor management is an ongoing process. Every organization must continuously fine-tune its vendor management strategy and system to ensure that all components continue to meet the company’s needs. Business owners find technology to be of great help in managing vendors, as it reduces the number of manual tasks that must be completed and allows employees to focus on tasks that drive business growth. Now is the time to prepare for the future, as being proactive helps businesses stay one step ahead of the competition.
