Organizations are overwhelmed by the proliferation of contractual agreements that they’ve signed with vendors like niche software providers, spurring them to push for vendor consolidation (reducing the number of vendors or services a company uses) and its supposed benefits — a trend that is giving risk management technology an opportunity to shine because of its broad capabilities to address so many business challenges.
The Rewards and Risks of Vendor Consolidation
Executive leaders and procurement departments are finding that consolidating services among vendors can cut costs and inefficiencies; increase their purchasing power; and improve their relationships with the vendors they actually keep.
And when it comes to consolidating technology and data services, the added benefits of fewer interfaces and more data transparency certainly come into play.
However, vendor consolidation is not without challenges: Namely, most vendors or platforms only bring a narrow group of solutions to the table — meaning stakeholders and their business problems might be ignored if they don’t get priority when cleansing the organization’s list of preferred vendors and platforms.
What Have You Done for Me Lately?
More and more, technology and data service vendors are being asked, “what can you replace?” — meaning what products and solutions are available to address multiple user groups’ needs so an organization can go from four vendors to three, three vendors to two, and so on.
Vendors with a narrow set of solutions often struggle with such a request — either with answering the question or delivering on their promises.
And just as vendors need to be equipped to survive this wave of consolidation, internal stakeholders need to be equally prepared with well-researched and well-prepared defenses for how a desired technology or data service will benefit not only a single department, but other departments as well, and even the entire organization. Being ill-equipped could leave you treading water without a float, and that’s no way to work.
Consolidate These Vendor Services/Solutions with Risk Management Technology
If you’re charged with seeking ways to consolidate vendor services — particularly technology or data services — at your organization, risk management technology can oftentimes replace the following solutions (and more) that are singular offerings from some vendors:
- Business Intelligence Analytics
- Enterprise Risk Management Systems
- Internal and Operational Audit Systems
- Health and Safety Management Systems
- Compliance and Regulatory Management Systems
- Vendor Risk Management Systems
- Business Continuity Systems
How Can Risk Management Technology Effectively Consolidate So Many Vendor Solutions?
Risk management technology by its very nature is built to span across a variety of departments and business challenges. Just as organizational risk is broad, so are the solutions housed within a risk management information system.
After all, truly integrated risk management technology serves to be a single source of truth that offers critical insight into all the strategic and operational risks across the enterprise and the actions being taken to manage those risks — ensuring they align with the risk tolerance of the organization
Therefore, it’s easy to see why technology committed to enterprise wide risk can serve as an enterprise wide solution — even if the business challenges that need to be solved are not necessarily within the traditional realm of risk management.