10 Signs That You Need to Outsource or Augment Vendor Management Staff

Managing vendor risks is an intricate process involving many interdependent processes, stakeholders, and activities. The vendor management team is crucial in ensuring that all stakeholders meet their obligations on time and with quality. This must all be done while managing a whole portfolio of vendors, onboarding new ones, executing vendor risk assessments, accurately scoping due diligence, and resolving all issues within the required deadlines. Add to that the many administrative details of vendor management, like requesting and collecting vendor due diligence documents, and it's no wonder even the most experienced managers can feel overwhelmed.

Overworking and overwhelming your vendor management team can lead to employee dissatisfaction and low morale, but it can also create a low-value environment. This is especially true if you have experienced vendor risk managers who are stuck doing administrative tasks that don't require high-level skills. These managers are better utilized when they’re actually managing risks, consulting with vendor owners, and ensuring processes are fully optimized for maximum productivity, risk reduction, and regulatory compliance.

10 Signs to Outsource or Augment Vendor Management Staff  

Outsourcing part of your vendor management work can be a viable strategy to make sure you’re getting the most out of your vendor management team, while still meeting requirements and managing costs. But how do you know it's time to consider outsourcing as a solution?

Here are 10 signs that it might be time to outsource or augment vendor management processes or staff:

1. Longer onboarding times. The time to onboard a new vendor is getting much longer due to an ever-growing queue of vendors in due diligence waiting on vendor risk reviews. 
2. The backlog is growing. More essential vendor management work is at risk or already past due and there doesn't seem to be light at the end of the tunnel.
3. Deadlines are missed. Essential processes like annual vendor risk reviews are consistently late, increasing the likelihood of regulatory exam or audit findings.
4. Inconsistent work product. Vendor management work may be getting done but the quality is decreasing or inconsistent.
5. No time for improvement. Getting the bare basics done is next to impossible, so there is no bandwidth for optimization efforts.
6. Increased vendor issues. The frequency and severity of vendor issues is increasing. The lack of proactive vendor management and oversight is growing.
7. Internal compliance is slipping. There’s lower adherence to policies that nobody has the time or energy to enforce. 
8. The organization is frustrated and looking for workarounds. There’s an increase in requested process exceptions or refusal to follow the process because vendor opportunities are being lost while waiting to get through long vendor management queues.
9. Employees are grumbling. The workload is unmanageable, no time for vacations or sick time, and escalated tensions between teammates and stakeholders. Nobody is happy.
10. Turnover is mounting. Employees are actively leaving the organization and internal vendor management knowledge is lost, recruiting costs increase, and there are bigger productivity gaps and delays while new team members are brought up to speed.

If your organization has a few of these signs or all of them, it’s probably time to think about doing something different, like outsourcing vendor management processes. It might be tempting to assume that adding internal full-time employees (FTEs) is the answer, but outsourcing vendor management functions to a qualified provider can be a great way to get caught up, add expertise, and augment staff.

Vendor Management Outsourcing and Staff Augmentation Solutions  

Let’s explore how tools and services offered by qualified providers can ease your vendor management burden.

• Dedicated vendor risk management SaaS tools: Managing your vendor management workload through manual processes, such as multiple spreadsheets and emails, can be inefficient and prone to errors. These outdated methods require constant updating, reconciliation, and auditing, which can take up valuable time and resources.
  
  You can streamline your entire process and boost productivity with a dedicated vendor risk management tool. Your data is captured in a single place, standardizing and automating key processes and communications, while ensuring that reporting is accurate and up to date. 
  
  With a vendor risk management SaaS tool, you can configure access and permissions for all stakeholders, including vendor owners, vendors, subject matter experts (SMEs), and the vendor management team. Each stakeholder can access and input the data they’re responsible for, ensuring that everyone is on the same page and that communication is seamless. These tools also help your team accomplish more work in less time.
• Outsourced administrative tasks: Collecting and organizing vendor due diligence documentation can be a time-consuming task. It often requires multiple follow-up communications before the documentation is ready for review. This becomes more challenging with an increasing number of vendors. While absolutely necessary, collecting vendor due diligence documentation is mostly an administrative task that can consume a lot of precious time. Outsourcing your administrative vendor management tasks, like due diligence document collection, to a qualified and professional vendor risk management services company can significantly increase your team's bandwidth, allowing them to focus on higher-value activities.
• Subject matter expertise: Due diligence backlogs often occur because internal SMEs have no bandwidth to execute the ever-growing queue of vendor risk reviews. Even worse, the organization might not have the right internal expertise to effectively evaluate the vendor’s risk practices and controls. By outsourcing this function to qualified SMEs, you’re ensuring vendor risk control reviews are performed by certified professionals. Most vendor risk management service companies have multiple SMEs on hand to ensure vendor risk reviews and control assessments are completed within a specific timeframe, eliminating the backlog.
• Risk intelligence: When time is limited, monitoring is often the first thing to go by the wayside. Who wants to read through tons of internet news alerts only to find the information is out-of-date or irrelevant? Using vendor risk management tools to access targeted, real-time vendor risk alerts is a fantastic way to ensure your organization is made aware of changing vendor risk profiles, financial health, mergers and acquisitions, cybersecurity breaches, and more. Point-in-time risk intelligence reporting can also provide an easy way to narrow a list of potential vendors before due diligence is even necessary, saving your staff time and energy.  

It's important to keep in mind that your organization is ultimately responsible for managing any vendor risks, whether you use vendor risk management tools and services or not. So, it’s essential to conduct thorough research on tools, ensure external SMEs have relevant professional certifications and credentials, and verify that cost structures and fees are transparent and reasonable. It’s also crucial to understand that outsourcing your entire vendor management function is not recommended. You’ll always need a certain level of institutional knowledge, internal influence, and accountability to ensure that your organization's vendor management processes and functions are meeting expectations and managing risks appropriately. This is expected by customers, auditors, and regulatory authorities.

Using professional vendor risk management tools and services is a great way to help your organization make the most of its internal resources without the need to hire additional FTEs. In many ways, outsourcing can also be a scalable and cost-effective solution that easily addresses fluctuating workloads. Most importantly, they can help ensure your vendor management workload is manageable and team members are adding maximum value to your risk management program.