How to Automate Your Vendor Risk Management Program

Every organization has vendors. Some require only a handful, and others need hundreds or thousands to operate. The way these vendors are managed varies greatly and vendor risk management programs tend to evolve over time. No matter the organization's size or vendor risk management maturity, automation makes a huge difference in saving time and money and improves consistency for repetitive tasks.

Categories of Automation

Using a specialized software platform is the best way to automate your vendor risk management tasks. Use your platform to pinpoint the most repetitive processes and help automate and streamline your vendor risk management program as much as possible.

What can you automate? For starters:

1. Vendor selection. The process of selecting vendors is unique to every organization. However, most organizations can benefit from automating the routing and review of the documents used in vendor selection, including proposals, pricing and completed vendor questionnaires.
2. Risk assessments. Keeping up with periodic risk reviews is essential. Knowing how often to review and when those reviews are due is an important part of vendor risk management, especially for critical and high-risk vendors who must be risk assessed at least once a year. Periodic risk assessments often involve multiple stakeholders, including the business line, the vendor management team and subject matter experts (SMEs). Use automation to alert the stakeholders to upcoming risk assessments and route the risk assessment tasks to the right task owner. You can also automate late reminders for those tasks that aren't completed on time.
3. Due diligence. Using the database from your vendor selection process, automate the selection and delivery of the due diligence questionnaire, so you don't have to manually perform the same task every year. When the questionnaires come back, automate the routing and review of the vendor responses.
4. Contract management. Use your workflow to push the contract review to all stakeholders who are actively involved in the deal.
5. Reporting. Use your platform's reporting feature to fill in a predefined report template.
6.  Ongoing monitoring. Any repetitive document request can be automated as the document requests can be generated and distributed using automation. Your vendor risk management platform can collect all vendor responses and automated routing can direct those responses to the correct reviewer or approver.

While automation isn't the be-all and end-all answer to every vendor management process or procedure, you'll be surprised at how much you can automate once you get started. Consequently, you may start a quest to see how much you can automate. The purpose of any vendor management platform is to save you time and money. Suppose the vendor risk management platform is static and doesn't have reminders or the ability to route reviews, tasks or approvals. In that case, your efficiency is only as good as your platform, and it may be a good time to consider a change.