What is Vendor Onboarding Software?

Vendor onboarding is a critical activity in vendor risk management (VRM). It lays the foundation for a successful partnership and protects your organization from unnecessary risks.  

Onboarding a vendor involves many steps, like performing due diligence, assigning a risk rating, conducting a vendor risk assessment, and negotiating the contract. There’s often a sense of urgency to onboard vendors quickly. This can be stressful and overwhelming for VRM employees to navigate.  

Vendor onboarding software helps organizations streamline the process while effectively identifying, assessing, and mitigating vendor risks. 

What is Vendor Onboarding Software? 

Vendor onboarding software is a tool that streamlines the onboarding process. It allows organizations to more effectively perform and collect due diligence, conduct initial risk and criticality assessments, and collect and store contracts.  

Most vendor onboarding software offers key functionalities, including: 

• Documentation collection 
• Customizable due diligence requirements 
• Centralized storage for contracts and other documentation 
• Automation for onboarding tasks, like sending questionnaires and approvals 
• Risk rating reports 
• Questionnaire templates 
• Reporting and analytics 

Related: Best Third-Party Risk Management Platform Features 

How Vendor Onboarding Software Eases the Process 

Investing in vendor onboarding software takes the burden off organizations to perform each manual process. Your organization can focus on finding the right vendor partnership rather than worrying about tracking down documents and creating workflows. 

Here are 7 benefits of vendor onboarding software: 

• Streamlines the onboarding process – Automation is a powerful tool in vendor onboarding software. Automating onboarding processes allows your organization to reduce the time and effort needed to onboard each vendor. Tasks like due diligence document collection, risk ratings, and setting up vendor profiles can be automated. This frees up time for employees to focus on more strategic activities.  
• Compares vendors – Selecting the right vendor for your organization is important. With vendor onboarding software, you can compare multiple vendors to ensure you select the right product or service. You can also centralize new vendor requests and approvals in the software.
• Improves compliance – Regulators across industries have different expectations for the vendor onboarding process. Your organization needs to consider requirements around data protection, due diligence, contracting, etc. Use vendor onboarding software to set up vendor profiles, perform initial risk and criticality assessments, and review due diligence documents. Vendor onboarding software is configurable to your organization’s compliance needs.  
• Identifies vendor risks – Vendors pose many risks to your organization, which are important to identify at the beginning of the relationship. Vendor onboarding software offers configurable risk assessments and questionnaires with clear risk rating reports. This helps identify and assess each potential vendor’s risk before signing the contract.  
• Improves contract management – Instead of using manual spreadsheets, store vendor contracts within the vendor onboarding software. Each new vendor’s contract can be tracked to avoid missing key dates. You can also track and monitor each service level agreement (SLA).  
• Provides reporting and analytics – It’s important to collect insights on the vendor onboarding process. Software offers reporting on key metrics like time taken to onboard a new vendor, the number of risk assessments currently completed and active, and vendor issue statuses. Quickly identify any potential vendor onboarding issues and make more informed decisions and improvements.
• Saves time and costs – There’s significant time and cost savings with vendor onboarding software. Manual processes are time-consuming and labor-intensive. Vendor onboarding software limits the need for manual work and prevents costly errors and delays, providing cost savings.  

Related: Vendor Onboarding 

Efficient vendor onboarding processes help your organization select the right partnership and product or service. Vendor onboarding software is a comprehensive solution to streamline this process, transforming the vendor onboarding process to better protect your organization from vendor risks. 

Learn how outsourcing and vendor onboarding software can benefit both new and mature third-party risk management programs.