In today’s digital and interconnected world, vendors and partners are more important than ever – and the vendor / third party risk management software used to manage those relationships is critical.

The consequences of not being on top of managing your risk can be enormous. Consider this: A semiconductor chip shortage is expected to cost the auto industry $110 billion this year alone. The right software can help you identify that kind of supplier risk in advance so you can better prepare and minimize the impact. The point is to help your business be more successful on a shifting stage.

What to Do Before You Jump into the RFP Process

Get your ducks in a row with some upfront preparation. Here are five tips to help you get ready for new vendor risk management software.

1. Get the team together.

You’ll be much more successful in the long run if you start by involving all the right people within the organization.

You may already know what today’s vendor risk management software can contribute to your organization’s success. But there are plenty of others who can offer valuable insight into what the company needs.

Solicit input from those who will be working with the system on a daily basis. Engaged frontline users can provide valuable insights from a practical standpoint. And it’s far better to incorporate their perspectives at the start than after the fact.

It also helps to include those holding the purse strings. Get leadership’s buy-in at the beginning by demonstrating the value of vendor risk management software to your business. When you make a convincing upfront business case to the powers that be, your journey becomes much smoother.

vendor risk management software graph2. Streamline current practices.

There is nothing to be gained by making a broken process more efficient at being broken. Resist falling into the trap of continuing the status quo simply because things have always been done that way. Before you start your search for new software, take time to reexamine your current practices to make sure they work – and are efficient. If not, this is your chance to make changes.

Simply put, if things aren’t currently working the way they should, remedy the situation before adding automation or implementing new software. And that includes correcting any data quality issues. Bad data will still be bad data in a new system – which will negate the value of your investment.

Any improvements you make now will pay off later with greater and faster impact from your new VRM software.

3. Assess what you need.

As you streamline your current practices, ask yourself what else is needed to effectively manage third-party suppliers.

· What information are you missing? What can’t you do with your current technology that you’d like to do? What are your daily pain points?

· Do you know what vendors are in compliance? How easy is it to track when a vendor will be falling out of compliance?

· Are notifications automated?

Automatic notifications are especially critical for high-risk vendors that have access to your systems and/or that provide resources critical to your operations. These vendors also need to be evaluated with greater frequency and in greater detail.

If you’re relying on too many manual processes, important information can easily fall through the cracks. And the more vendors you depend on, the greater the risk.

vendor risk management software4. Have a plan.

Now that you better understand what you need, map out a plan for moving forward and making effective use of team member time commitments.

Establish a project-management schedule for the entire process to ensure that you stay on track. Build a timeline starting with your initial assessments, followed by crafting an RFP, reviewing submissions, and scheduling demos all the way through implementation and adoption. Be sure to include adequate time for data clean-up, system testing, and user-acceptance testing. And allow time to make any needed adjustments before go-live.

5. Prepare for resistance.

Human nature is to resist change. Change is especially hard for those who are happy with the way things are. Such resistance can certainly be overcome – if you are prepared.

One way to overcome resistance is to include likely naysayers on the team. Not only will that help them feel their input is valued, but their skepticism can illuminate potential problems and raise important points early on.

To encourage broader user acceptance, develop a thoughtful training program. The more prepared you are to demonstrate the value of the software and how it can free up time for more interesting work, the better able you will be to overcome any resistance.

As the use of third parties continues to grow, organizations need to pay strict attention to the way these relationships and related risks are managed. And vendor risk management software that automates processes, standardizes assessments, proactively sends alerts is increasingly essential for long-term success. All it takes is a little preparation.

For more on how to get ready for new risk management software, download OCEG’s e-book, “Preparing for a Change in TPRM Technology,” or learn more about Riskonnect’s Third-Party Risk Management software.