6 Things to Watch Out for With Your Vendor Management Software

Choosing a new product or service is not a quick and easy task for any organization. It’s an important decision and takes thoughtful consideration and time. That same thoughtful consideration should be given when choosing the vendor management software that will provide the foundation for your organization's vendor management program. 

The 6 Vendor Management Software Things to Watch Out for

When selecting a vendor management software, keep these 6 factors in mind:

1. Expertise. It’s important the software provider has real world expertise in third-party risk management. A good provider will not only know the ins and outs of third-party risk management across industries, but they should also have qualified subject matter experts on staff who can assist with questions and/or perform due diligence reviews at your request. To ensure you’re dealing with true subject matter experts, it’s important to confirm that the providers experts have relevant industry certifications or extensive experience. For example, certified public accountants are qualified to review vendor financials, and someone with a CISSP certification is likely qualified for information security-related reviews.
2. Exclusivity. Ask yourself if it seems like the software was designed to fit well with your industry and organization’s expectations, as well as your organization’s strategic goals. You want to make sure you can accomplish what you need.
3. Training. When it comes to Software as a Service (SaaS) providers, you need to know what the implementation looks like and how users will be trained. What kind of training will you get, how much training, and at what cost? Is training included or an additional element of the services? What additional resources are available for users? Is there a library of FAQs or instructions a user can access after their initial training?
4. System Uptime. Ask to see the system uptime results. It’s a given that software will experience temporary downtime for routine system maintenance, but outside of that, you’ll want to see that the downtime is at a minimum.
5. System Configurability. How configurable is the system? How easy is it to make changes if you need them? You want software that can accommodate your needs, is compliant with regulatory requirements and best practices, and can produce reports for your stakeholders, including the board, auditors, and regulatory examiners.
6. Pricing.  Ensure the pricing is fair for the quality of software and services you’ll be receiving. Explore how they price their services. Is the price based on a fixed number of vendors and users? Is it tiered pricing based on your organization’s size and revenue? Does pricing only include bare minimum functionality but additional components and functionality priced a la carte?

3 Tips to Optimize Your Vendor Management Software

Once you’ve selected the best vendor management software for your needs, don’t assume this is the final step of the process. It’s important to continually evaluate your provider and the software itself to ensure that both are working as expected for your organization’s vendor management program. 

Consider these three tips to optimize your software:

1. Customize to your needs. Your organization has unique needs that may change over time, so you’ll want to configure and customize the software to make sure it continues to work for your program and processes.
2. Communicate. It’s important to regularly communicate with your software provider by sharing any feedback or concerns. A good provider will maintain reliable communication and offer solutions to your issues. 
3. Review your expectations. Your contract and SLA (service level agreement) should clearly outline your expectations around the software provider’s duties. Remember to review these documents and identify any issues so you can take action as needed.

Overall, if the software requires you to adapt too much, or change your basic workflow to meet a predetermined workflow embedded in the software, then you need to consider a system with more flexibility. Or if the software is priced to look like a good value in the beginning, but becomes substantially more expensive as you add the functionality you really need, think about different providers who can offer more transparent pricing. When doing your research, remember to keep these considerations in mind to help you select the best vendor management software for your organization at the right price.