Using the RACI Method to Assign Vendor Risk Management Roles

For vendor risk management (VRM) processes to be effective, clear roles and responsibilities are vital. Stakeholders can better identify, assess, mitigate, and monitor vendor risks when they understand what’s expected – driving productivity in your VRM program.  

One effective method for assigning roles and responsibilities is the RACI method. The RACI method is a simple approach for ensuring stakeholders understand their role in each VRM task.  

Let’s explore how to use the RACI method to assign and manage vendor risk management roles effectively. 

What is the RACI Method?

RACI stands for Responsible, Accountable, Consulted, and Informed. The RACI method provides a structured approach to assigning and communicating vendor risk management roles. This increases accountability and ensures each vendor risk management activity has the correct roles assigned.  

Let’s look at each specific RACI role: 

• Responsible – Responsible for carrying out the vendor risk management activity and answers to the accountable stakeholder. 
• Accountable – Has the ownership or authority to make decisions and approvals for the vendor risk management activity. This person has ultimate control over the process or task. 
• Consulted – Responsible for reviewing, approving, or providing information; two-way communication is required to be effective. 
• Informed – Doesn't have authority over the vendor risk management activity but needs to know about it. This is one-way communication – the informed stakeholder only receives information from the other stakeholders.  
  
  Related: Who Is Responsible for Vendor Risk Management? 

How to Use the RACI Method in Vendor Risk Management 

Using the RACI method to assign roles and responsibilities in vendor risk management enhances transparency, limits confusion, and streamlines communication. It provides insight into who needs to perform what task, keeping your VRM activities on track.  

Here’s 6 steps to use the RACI method in vendor risk management: 

1. Identify vendor risk management activities – Determine the activities that need a RACI matrix. Consider activities across the entire lifecycle, like inherent risk and criticality review, due diligence document collection, and residual risk scoring. These activities should be specific. You may choose to select a few tasks to begin with and add more as your organization gets accustomed to the practice.  
2. Divide activities into actionable steps – Remember to be specific with your activities. For example, the risk assessment process can include determining criticality, completing the inherent risk assessment, and assigning a risk rating. Each task requires various roles and responsibilities. Review your VRM program document to ensure the right tasks are included.  
3. Engage with other stakeholders – During the RACI process, get input from other stakeholders as needed. This offers insight into who should be assigned a RACI value for each task. Senior management and the board should approve the roles and responsibilities.  
4. Assign RACI values for each task – A “Responsible” and “Accountable” stakeholder should always be assigned to a task. It may be the same person. Not every stakeholder will have a RACI value assigned to each task. Each task can also have multiple roles with the same RACI value.  
5. Create a RACI matrix – A visual matrix is a great way to represent the roles and responsibilities for each task. Color code each RACI value and list a description of the task or process. As you can see below, for the activity “Assign Risk Rating,” the TPRM team is both Responsible and Accountable, the Vendor Owner is Consulted, the Subject Matter Expert is Consulted, the Vendor is Informed, and Senior Management is Informed.  
   
   
6. Document and update – Document your RACI matrix and store it where it’s easily accessible for stakeholders to access. Remember to update when there are changes to responsibilities or processes. The RACI matrix should be a living document for stakeholders to reference. 

Related: How to Maximize Your Third-Party Risk Management Resources 

With all the activities included in vendor risk management, it can be challenging for stakeholders to know what’s expected of them. Using a RACI matrix for VRM roles provides clarity into processes and accountability to each stakeholder.  

Use our template to create your own RACI matrix for vendor risk management.