With businesses and organisations relying heavily on extended enterprise to support business growth in the current economic markets, there is an increasing reliance and strain on manual resources for the management of contracts. As a contract lifecycle needs continuous monitoring and analysis of data to gain the best value and performance and improve the profitability of the contract, manual vendor risk management systems and the resources needed are often inadequate for this task. This is especially prevalent if a business is based on a strategic model that relies on a larger number of vendors for support and services and as such, has a larger number of complex contracts.
With a large extended enterprise comes an increasing amount of risk. Because there are so many variables with vendors and vendor contracts, the types of risks the relationship may have on your business can vary from financial, to security, through to operational risk. This variance can mean mitigating those different risks at various stages in the contract lifecycle is both a time and resource-consuming process.
Although business will never be risk-free, with a good strategy and the framework in place to support it, businesses can make the most of high-growth strategies and business expansion, without having to deal with a negative outcome. Therefore, to support your business, implementing a digital, automated vendor risk management solution is highly recommended to help protect key areas of your business and to minimize the risk during future growth and expansion.
With a digital solution your business can reduce the time and resources spent on dealing with the processes and substantial amounts of data associated with risk management and vendors. With automated software, you can streamline your corporate governance and vendor risk management into one easy to use system and improve the productivity and efficiency of your business overnight.
Although some businesses and organizations will be concerned about the cost of implementing VRM software, there are numerous benefits to consider, and if utilized correctly, VRM software can provide a significant ROI.
What are the key benefits of implementing VRM software?
If you are looking to implement vendor risk management software into your business, there are considerable benefits to automating the system.
Improving efficiency in your business can have positive impacts throughout your organization and business model and if you want to minimize organization risk, efficiency is the essential foundation on which to build. Base administration tasks and governance can be streamlined through use of VRM software, making the process of vendor contract management far easier and allowing you to allocate human resources elsewhere in your business and reducing the risk of human error or an accidental breach of data.
An introduction of automation to your business not only improves efficiency and gives your risk management team structure and control, but with the level of oversight of contract performance and data only automated VRM software can give you, your business can ensure that any areas of your vendor ecosystem that are higher risk can be prioritized. This data-based decision making can be the driving factor and support behind any steps taken to mitigate and minimize further risk.
Due diligence & risk assessments
Due diligence is a key aspect of vendor risk management. This can often be supported by using external data sources. These sources need to be relevant to specific elements of the industry a business is in. Different countries and contracting for specific products and services for example, will create different risks and therefore different risk profiles. By using the correct data sources, a business can reduce the overall cost of the risk assessment stage. VRM software often has connections to external data sources, so rather than manually allocating the resources to research each individual vendor, you can utilize the VRM software to automatically check and identify your potential vendors, improving productivity and reducing the time it takes to assess risk.
Once your business has the required information to make an informed risk assessment, VRM software provides the framework to compare and analyse any data gained against the available information sources. This should help determine if or where in the chain your business may be exposed by any relationship with a potential vendor and ensures that such a relationship will be good value and will not cause unnecessary risk and disruption to the running of your business.
Once your business has chosen the right vendor to form a relationship with, it is imperative that any contracts are carefully written with consideration of any risks that have been identified during the risk profiling or assessment. Content creation with VRM software can help your business make this phase run smoothly and efficiently. Without it, you risk your contracts lacking in detail due to lack of research and time management and as such, the risk of damage to your business is greatly increased. VRM software enables you to accelerate the initial stages of contract management by creating standard contract templates that can be configured to specific requirements and risk.
Proper management of risk using VRM software can prevent any gaps or delays in the extended enterprise of a business. Regular monitoring of the overall lifecycle of a vendor contract and the risks identified during the assessment process can highlight any non-compliance with regulations that may have negative and costly consequences and help reduce the damage non-compliance has on your business. It is also important that any other risks, or risk areas are continually identified so that steps can be taken quickly to avoid any damage to your business or your business reputation. And because VRM software is automated, there is a comprehensive audit trail, supporting your compliance teams and reducing the risks associated with disputes.
Another feature of VRM software helpful to compliance teams is having pre-approved contract templates that can be configurable to specific clauses and can be regularly updated to reflect changing regulations. This not only improves productivity during contract creation but helps businesses reduce compliance risk by letting legal teams create standardized clauses and language.
Efficiently managing your third parties in your extended enterprise once the onboarding process has ended does not mean the diligence and research process stops. Regular auditing and reviews protect businesses and minimizes risk. KPIs can play a large part of any vendor contract management and by negotiating and setting KPI’s in the initial stages, it can pay dividends during the monitoring phase of a contract lifecycle. Not only do they help protect both businesses and vendors from poor standards and performance, KPI’s can help identify any possible risks and ensures any strategic risk decisions are made with a basis in fact and data. VRM software allows for regular auditing and reviews of your contracts, KPI’s and vendors and can protect your business from poor performance, non-compliance and minimizes risk.
Automated monitoring of your data sources is one of the big advantages of integrating a VRM platform into your business. The combination of data analysis and the granularity of data provided by a VRM, should give businesses an accurate representation of what vendors are successfully meeting their requirements and obligations in regard to efficiency and output and reducing the operational risk from delays in the process.
VRM Software from Symfact
Here at Symfact, we believe by implementing our VRM capabilities within our Contract and Compliance Management software, you ensure your organization is adopting the best platform available that can help optimize your business potential, whilst minimizing all areas of risk, from due diligence through to off boarding a vendor.
We offer a centralized repository for all your data and contracts, creating a unified data pool from which to track specific data. You can do this using our metadata search function and data tagging. Being able to evaluate and monitor the data can help you prepare for inherent risk, rather than reacting to problems when they occur.
By having our CLM (Contract Lifecycle Management) software in place to compile the information you need from data sources that are specific to your business, using our intelligent questionnaires and our external databases, your business can have a successful contract lifecycle. Here at Symfact we offer advanced security profiling and background checking by connecting to Dow Jones, LexisNexis, Dun & Bradstreet and Refinitiv, whilst our software can design, build, and publish intelligent questionnaires to help identify risk.
Having an overview of workflows and reducing the time spent by your employees on the actual management of contracts due to the efficiency of an automated vendor risk management system, means that productivity will improve, and you can manage all types of risk effectively, which in turn will improve business growth and revenue. At Symfact we offer VRM software that includes:
- Analytics of specific information and documents relating to risk with our custom reports tool
- Track data and events to predict possible risks, be proactive instead of reactive
- Continually track and monitor the data important to your business strategy to ascertain opportunities where strategic risk may be taken in order to maximize revenue
A better risk management process can also allow your business to access potential business opportunities and development and by optimizing your vendor risk management by using the tools included with our software, you can monitor any KPI’s, allowing you to assess risk and project long-term revenue. Plus, the reporting and auditing features of our automated platform means you are always alert to compliance regarding contract terms and provisions, avoiding the financial and reputational risks associated with poor compliance with standards, regulations and internal policies and procedures. By implementing vendor risk management software, and by utilizing automated technology, you have the benefit of being fully prepared for any business expansion and growth in number of vendors, as well as helping to protect your business by assessing, monitoring, and mitigating risks that can have a detrimental effect on your relationships and business, Specific features offered by Symfact include:
- Ensure compliance with data regulations by selecting the location of your server and therefore data, depending on your legislative and jurisdictional requirements
- Due to features being automated, such as document storage, our software uses less human resource, reducing the risk of an accidental data breach
- Use our configurable access control interface to allow and restrict access as and when you need to, helping to mitigate security risk
- The incident capture and reporting capabilities ensures all incidents are stored and automatically assigned for investigation, whilst our analysis tools can assist with legal protection
Managing your vendor ecosystem and contracts, whilst assessing for risk and ensuring both your business and any vendors maintain strict adherence to regulations is a complex process when using a manual management system. Legacy systems are often unwieldy with a large number of siloed departments. Vendor risk management software is designed to make the entire process simpler and help protect your business by assessing, monitoring and mitigating risks that can have a detrimental effect on your business relationships and future, as well as ensuring compliance with internal policies and changing regulations. By optimizing your approach to vendor risk management and implementing a robust vendor management platform like the third-party risk management software offered by Symfact, you could make a positive difference to your business. Our platform can also provide you with the framework needed to drive business growth by being able to correctly assess strategic and financial risk.
So, if you feel your business or organization could benefit from using Symfact risk management capabilities as part of your broader governance and risk strategies, then please do not hesitate to contact us here at Symfact for a free demonstration. We want you to work better, not harder.