Must-have Vendor Management Software Features
Vendor management software is a program that helps an institution in managing third and fourth-party vendor risk. It ensures that existing processes are running smoothly and documentation is being done. It also provides insights on how to enhance vendor relationships and policies.
To help you select the right tool to manage your suppliers, here are some vendor management software features to look for.
Vendor Management Software Feature No. 1: Looks after the entire vendor management process
Vendor management doesn’t end after signing a contract. It needs to continuously assess the risks posed by a third-party vendor and its subcontractors, and offer tools to monitor and mitigate those risks. It ensures that vendor risk exposure matches the organization’s risk appetite and sees to it that every step of the vendor management life cycle.
Vendor Management Software Feature No. 2: Promotes collaboration
Being thorough and redundant can be different when talking about vendor management. In thorough vendor management, various departments work together to efficiently monitor vendors. Meanwhile, redundant is when different teams individually check vendors, copying each other’s work.
Redundancy is common in many institutions where responsibilities are divided for critical vendors. For instance, someone in the IT department handles cybersecurity, while another takes care of compliance as well as business continuity planning. These may appear to be different tasks, but there is actually substantial overlap. It may include the following for financial institutions and security breaches:
1. Vendor management. Regulators want financial institutions to know whether important suppliers are expected to provide notification in the event of a security breach.
2. Cyber security. The FFIEC’s Cybersecurity Assessment Tool clarifies if all critical vendors are required to alert the financial institution when there is a security breach.
3. Business continuity planning. An organization needs to know how much time it will take for critical vendors to inform them when a security breach happens.
4. Compliance. Laws such as the Gramm-Leach-Bliley Act requires vendors with access to protected data to notify the financial institution of a security breach.
Vendor Management Software Feature No. 3: Analyzes critical information at every level
Vendor management focuses on identifying, assessing, monitoring, and mitigating third-party vendor risk by using policies, procedures, and documentation. A vendor management software solution should have a feature that provides oversight and insights necessary for each of these elements.
Vendor Management Software Feature No. 4: Reviews an evolving vendor environment
You must select a vendor management software solution that can enable the institution to be always updated on vendors with minimal effort on its part. The software should be able to:
1. Gather data. One of the most labor-extensive elements of vendor management is document management. With a number of documents needed including SSAE 18s, financials, insurance, licensing, audit reports, and test findings, a financial institution must have a software solution that can track and store these documents. It should also inform the institution when certain documents haven’t come yet.
2. Analyze reports. Vendor reports should not just sit on tables, rather they need to be carefully reviewed as part of an institution’s vendor management due diligence efforts. These reports make an institution understand if a vendor remains a reliable partner. Vendor management software should have features that will highlight important changes so that an institution can make informed decisions — whether it’s questioning the quality of its vendors’ cybersecurity and incident response policies or its financial situation.
3. Provide ongoing monitoring and risk assessment. If you have notifications sent by a vendor or litigation, media reports or other news that indicate a vendor is facing problems, a vendor management software solution needs to provide continuous tracking to ensure that your institution’s due diligence efforts are made known. You must show supplemental efforts that could demonstrate to regulators that your institution is proactively monitoring vendors.
Vendor Management Software Feature No. 5: Provides easy execution
The main objective of a vendor management software solution is to simplify and streamline vendor management, and lessening the workload of an already overtaxed staff. Institutions must find a solution that is tailored to their needs.
The institution should create a team that is sensitive to the emerging needs of the organization and committed to adapting the solution to its changing requirements.
Ultimate Technical Solutions, Inc.
Ultimate Technical Solutions Inc. is a dynamic Information Technology company based in Louisiana. Our team of experts works with vendors to support your organization’s current needs and future goals. From the procurement process to the recognition of pain points, we are at every step of the way. Contact us today at (504) 370-2102 for more information about the services we offer.