Intro: This piece is from a three-part series by guest blogger Michelle Middendorf, workers’ compensation manager at Stanley Steemer. The series focuses on how the company’s streamlined process for managing certificates of insurance evolved into addressing even bigger initiatives like vendor management as a whole, and ultimately allowed the company to expand its commercial business with more value-added services.
If you rely heavily on third party vendors, you know the importance of making sure their business and risk management practices align with those at your organization. You also know it’s no easy feat.
For Stanley Steemer, it actually proved nearly impossible until we discovered we could streamline the entire vendor management process using our risk management information system — a realization we had while trying to automate the more basic process of managing certificates of insurance for our approximately 200 franchisees and their vendors.
To our amazement, we converted a formerly resource-intensive process into a low-touch experience for both our team and our vendors. We’ve automated everything from vendor quality assessments to contract and certificate management. The days of back and forth emails, phone calls and faxes regarding missing information or signatures have become distant memories.
Tips of the Trade
If vendor management is a pain point for your organization, here are three tips for successfully managing vendors, and how risk and insurance technology can help:
- Know your vendors: Ensure your list of active vendors is up-to-date and comprehensive, including accurate profiles highlighting what they do, and any potential risks and insurance requirements that might accompany their business models. Because our risk management information system is cloud-based, we were able to set up an online vendor management portal that vendors can easily and securely access without additional license fees. The portal contains the most up-to-date and accurate background data — input directly by the vendors themselves, or automatically updated by the application itself.
- Assess your vendors: Knowing your vendors, their businesses and their inherent risks will require some due diligence. Provide vendors with questionnaires that assess their operational protocols when it comes to issues that might affect your organization. Aim for simple and objective questions that elicit complete, but not cumbersome, responses. To achieve this electronically, we established metrics and “conditional logic” (or “if this, then that”) questions that are now housed in our risk management information system. A link to the questionnaire is automatically emailed to any potential vendor flagged as needing to be assessed. We can even flex the system if we desire to automatically approve vendors based on their responses. All this functionality has sped up the entire vendor assessment process and improved the quality of survey responses because vendors are no longer burdened with answering duplicative or irrelevant questions.
- Don’t forget the details: When it comes to vendor assessments, approvals, agreements and certificates of insurance, the devil is the details. Have an organized system in place to keep tabs on the status of all these items. Make sure all documentation is compliant with appropriate signatures and documentation. Thanks to our online vendor portal, we’re no longer drowning in vendor management details. Vendor data and relevant documentation can now be stored and updated in a single environment by multiple stakeholders — without version or status confusion. Our system’s ability to trigger automatic vendor communications cut down on manually chasing data. Finally, preparing, sending and getting contracts signed electronically from within our system has accelerated workflows and reduced legal risks.
Why Great Vendor Management Matters
Converting to an electronic vendor management process ended up being transformative for Stanley Steemer: It allowed us to shift from primarily focusing on residential business to more aggressively pursuing certain commercial lines of business — a priority that had been cumbersome, but is now streamlined because we have adequate resources to appropriately manage our vendors.
Don’t let the many details associated with vendor management hamstring your organization. Take steps to streamline your vendor management processes, and you’ll quickly realize the value goes far beyond controlling the madness.
Latest posts by Michelle Middendorf (see all)
- The ROI of Integrated Risk Management - May 18, 2017
- 3 Tips for Successfully Managing Vendors - April 18, 2017
- Manage Certificates of Insurance so They Don’t Manage You - April 11, 2017