Leveraging Existing Investments to Mitigate Vendor Onboarding Risk
Today’s challenging economy makes finding efficiencies more important than ever, and vendor onboarding and relationship management are great places to start. The challenge is streamlining without adding potential compliance issues and risk to your organization.
One straightforward way to achieve both objectives is to leverage the parallels between vendor and employee onboarding. Taking advantage of best practices from other areas of your business can help you maximize the value of prior investments in process and technology while mitigating the risk of breaches and noncompliance.
Like employees, vendors have access to systems or portals that integrate with sensitive data and technology, yet companies often fail to communicate security standards or ensure visibility into vendor data access. As a result, third-party vendors are a frequent source of security breaches. And digital transformations often increase the number of vendors companies work with, further exacerbating these security risks.
During vendor onboarding, your company collects all of the information needed to approve a supplier. One of the most important aspects, of this process, is ensuring prospective suppliers comply with your organization’s regulations and standards as well as local, state, and federal laws.
Vendor Management, Meet Employee Onboarding
Many organizations have prioritized their employee onboarding experience, making process and technology improvements that can offer a head start for vendor management upgrades. Relevant examples include background and reference checks, confirming employee data, and training new hires based on roles and responsibilities. The challenge is unlocking those capabilities in a different part of the business.
Making The Most Of Your Employee Onboarding Investment
There are many ways to assess existing employee tools and determine which ones can be used to strengthen vendor management policies and procedures and establish effective vendor relationships. Examples include:
Employees: Do you provide distinct levels of access for your temporary contractors vs. employees?
Vendors: Should you deploy the same access principles for vendors who are serving a one-time need for a single project vs. vendors who are on-going business partners?
Employees: How do you collect and validate reference checks, testing, etc. required for employees?
Vendors: Should you have the same documentation for vendors?
Policies & Procedures
Employees: What type of policy and procedure training do you require for your employees?
Vendors: What sections of the training could you retool for vendors?
Security & Compliance
Employees: Do you require security and compliance training for employees?
Vendors: Organizations with high levels of sensitive data wouldn’t provide badges to new employees until they pass a security tests. Should you also require this training for vendors?
Don't Stop At Onboarding
Vendor risks don’t go away once the onboarding process is complete. As the nature of their work evolves or new processes are introduced, risks often increase. Vendor risk management should be conducted throughout the entire lifecycle of the relationship. Offboarding poses new risks as well, like failing to ensure that vendors no longer have access to company data and systems.
As with onboarding, here are some areas where Human Resource (“HR”) and Procurement departments can find synergies:
- Relationship management: Similar to employees, vendors should be able to easily share a change of address, update contact information, and inform the company of other relevant changes. Regular check-ins and reviews can help head off issues before they arise and decrease duplications in your database and reports.
- Offboarding: HR and Procurement can collaborate to design policies and procedures to reduce the security risk when employees and vendors are offboarded. Companies rarely have a fully automated employee offboarding process and often fail to terminate access for former employees. Likewise, 60% of organizations don’t consider third-party risk when offboarding a vendor.
By combining efforts across employee and vendor offboarding policies and procedures, businesses can significantly reduce risks – especially in high turnover environments.
How To Get Started
- ASSESS what you already have and consider how it can be leveraged.
- DETERMINE gaps and decide what needs to be created, along with the resources and time required to implement.
- PRIORITIZE based on areas that represent the greatest exposure and lowest implementation costs.
- GAIN an independent perspective based on best practices and current trends.
The Bottom Line
While it’s critical to plan and prepare for the risks vendors can introduce through their entire lifecycle, starting with the knowledge and tools your organization already has in place can help you cut costs and gain efficiencies.
Independent third-party risk assessments are often beneficial and sometimes mandated. Through assessments of your policies, procedures, and technologies, we can help your business identify the gap between where you are and where you need to be.
We welcome your questions and look forward to providing helpful solutions that add value with less investment and more expertise.