Without appropriate infrastructure in place, managing third-party processes can be a hassle
From hirings and onboardings to compliance correction and document tracking, each vendor is accompanied by myriad moving parts.
However, a robust vendor management strategy and investment in modernized software are proven antidotes to liabilities, deficits, and negligence, among other risks.
Vendor management involves mitigating risks, maintaining compliance, and managing every stage of the third-party life cycles—from onboarding to project completion—to maximize value and form safe business connections.
This typically involves the following processes:
Some software platforms enable you to manage all these facets in one place, with secure document storage, automated hiring, AI-powered compliance correction, and so much more.
Certificates of insurance (COI) are abridged documents reflecting the most pertinent details of an insurance policy.
Rather than carrying around a stack of documents, businesses and third parties often use COIs to verify insurance status when doing business.
COIs usually contain the following information:
However, COIs are not only convenient; they are essential for maintaining compliance and mitigating third-party risks.
Valid insurance coverage ensures appropriate loss transfer from the responsibility of the insured to the insurer in the event of damage, injury, and other claims.
Doing business with vendors that present active and valid COIs streamlines vendor management, mitigates associated risks, and facilitates better partnerships from the start.
To expertly manage third-party relationships and build safer connections, we recommend adhering to three key pillars as a guide to vendor management.
As a rule of thumb, hiring verified third parties from the beginning is the best way to proactively stave off risk, non-compliance, and unwanted third-party actions. This, alone, empowers your business to establish trust and complete projects with minimal risk and oversight.
When maintaining a third-party relationship, there are a number of ways to monitor and address potential risks before they manifest as liabilities, fines, legal action, reputational damage, and more.
We recommend considering the following when devising a robust risk management strategy:
While it might be tempting to rely on a habitual, manual protocol for COI tracking and upkeep, recent research demonstrates antiquated systems frequently cost more than they save, and render businesses vulnerable to risks such as cyber threats, lost productivity, and obsolescence.
Facing human error, squandered time, and numerous other vulnerabilities often associated with manual documentation tracking, it is prudent businesses consider the long-term payoffs of mitigating liabilities through modernized, real-time COI tracking software.
Sophisticated platforms enable you to easily pinpoint any COI and compliance deficiencies before they manifest as liabilities and expirations, empowering you to bring wayward vendors back into compliance with a few clicks.
Rather than risk hefty fines, reputational damage, or legal action often accompanying prolonged non-compliance, automated tracking curbs human errors and oversight—immediately flagging and highlighting deficiencies and expirations as they occur, for painless correction.
Although third parties are an inherent risk and necessity for businesses, those liabilities can be mitigated from the beginning of a supplier relationship with thorough risk assessments, reviews, background checks, licenses, and COI verification—all of which inform about the vendor’s unique stature.
By transparently collecting and assessing relevant information before entering into a contractual bind with the supplier, your organization gains vital, full visibility into potential threats and impacts the hiring may have on your project and business.
As each vendor possesses a unique stature, it is a good idea to align contractual standards with the specific risk posture of every tenant.
While it might be tempting to utilize pre-drafted contract templates, individualizing contract stipulations ultimately protects your business—enabling you to not only specify the terms of the relationship upon hiring, but instill accountability and expectations for the project’s scope.
Businesses might choose to utilize some portions of contract templates as long as they are unrelated to the supplier, such as company descriptions and other consistent variables across projects.
Once expectations and standard protocols are contractually outlined, businesses should continually collect and report ongoing risk data to ensure vendor compliance, and follow through.
Through real-time tracking updates and messaging via streamlined software, organizations can continually monitor timeline progress, supplier accountability, and instantly rectify any non-compliance, expirations, negligence, or other risks.
In the event of non-compliance, companies can correct documentation fairly easily, especially with certain self-service tracking software that offers instant insight and correction.
However, third-party challenges such as negligence or other liabilities require swift auditing, reporting, and potentially, legal action. Failure to address significant risks in a timely manner ultimately reflects poorly on the organization.
To avoid such liabilities, it is best practice for businesses to invest in modernized document tracking solutions that not only proactively address compliance deficiencies as they occur, but easily organize third-party information and nix communication silos.
Alongside efficient hiring from the start, establishing open communication is another guidepost for effective vendor management and cultivating goodsupplier relationships.
According to a study by the Canadian Center for Science and Education (CCSE), “true feelings of good communication amongst participants, including managers” breeds trust, crucial for any business relationship.
We recommend considering the following avenues when establishing healthy communication practices with contracted third parties:
Once you have selected the suppliers for your project needs, it is time to onboard their information into your system.
While some businesses conduct manual onboarding processes, some software enables easy onboarding through a vendor mobile app.
Regardless of whether your processes are digital or manual, it is equally necessary to ensure you collect all vital records, including individual and affiliated business information; safety, health, and financial screenings; COIs; and other related documentation.
By beginning the supplier relationship with thorough documentation, you facilitate convenient recall and transparency throughout the project timeline.
Interested in learning more? Read about how the BCS App streamlines vendor onboarding and compliance.
During day-to-day project processes, it is often convenient for organizations and suppliers to ask questions and clarify information via a streamlined messaging portal rather than sift through emails or other lengthier correspondence to address the minutiae of business operations.
By investing in messaging-enabled software, you not only ensure your vendor records, COIs, and other necessary information is in a centralized database, but that you can clarify pertinent details about those records or other concerns in a timely manner.
In regular communication with third parties, it is also best practice for businesses to maintain detailed accounts of information, affording full visibility of third-party records, activity, accounts payable, stakeholder assessments, and more—all within a streamlined vendor list.
These databases are the most current representation of your third-party suppliers, shedding light on active tenants, relevant documentation, accounts payable balances, and stakeholder assessments.
By continuously updating this information, you can repeatedly select ideal candidates and build safer, lasting relationships.
Along with prioritizing the above, businesses should also implement risk management in these avenues of communication—setting clear expectations from the beginning of the relationship, maintaining contact about project progress, and more.
Of course, modernizing your vendor management system aids significantly in both communication and risk management, as well as in streamlining nearly all business processes—from hiring and onboarding to COI tracking and document reference.
Although manual vendor management is habitual and, at times, comfortable for many businesses, recent studies demonstrate the transformational impacts of investing in modernized software systems.
Antiquated third-party processes tend to cost more money than they save, according to an account from the Phoenix Business Journal—rendering businesses more prone to security threats, at risk of wasting productivity, and losing customers to the competition.
While a modernized vendor management software typically requires more upfront investment, it will likely save your business money in the long term.
The vendor management software landscape offers myriad benefits, and we recommend implementing the right solution for you to streamline vendor management in the following areas:
Modernized software facilitates a seamless hiring process, from job posting to onboarding.
Whereas manual processes might rely on traditional servers, job sites, and so on, automated RFP capabilities add a layer of unprecedented efficiency and employee verification to the hiring process. By broadcasting RFPs to vetted software networks, businesses can effortlessly find and procure new vendors, make selections from a pool of pre-qualified applicants, and conveniently onboard new hires through a vendor mobile app.
While assessing applicants, it is also best practice for companies to utilize vendor screenings for full visibility into third-party liabilities and assets. U.S. Office of Foreign Assets Control (OFAC) debarment screening; environment, health, and safety (EHS) screening; and financial and legal screenings significantly mitigate risks of undesirable litigation history, claims, bankruptcy filings, and more—empowering your business to build healthier, more informed supplier relationships.
Rather than relying on manual COI filing, tracking, and documentation management, modernized systems negate human error potential with instantaneous alerts on deficiencies, expirations, and other liabilities for an easy return to compliance.
Whether accessing vendor records or correcting documentation expiration, these sophisticated platforms streamline communication, COI updates, tracking, and so much more—protecting valuable time, money, and peace of mind through automation.
Interested in learning more about COI tracking? Check out our explainer on self- and full-service tracking options.
From vendor portals to document databases, modernized software not only provides automatic tracking and upkeep, but serves as a vast repository for storage and document reference, negating the need for mountains of spreadsheets and manual filing.
Cutting-edge software grants instant access and recall for vital information, all safely protected within a secure server.
To learn more, read our comprehensive piece on vendor portals.
In maintaining safe and strong vendor connections, it is crucial organizations pay suppliers equitably and explore possibilities for API (application programming interface) integrations—connections between two or more applications that facilitate data sharing.
These enhance the streamlined capabilities of modern tracking solutions by seamlessly linking information between application servers.
The sheer innovation of these cutting-edge software systems enables the integration of risk management and communication best practices, ultimately saving your business money, protecting from liabilities and oversight, and streamlining vendor management.
By investing in these crucial third-party management guideposts, you can ensure your organization cultivates safe vendor relationships, fulfills project expectations, and runs optimally.
When optimizing your vendor management process through these guideposts, there are numerous facets to consider—especially if migrating your vendor management processes from manual to automated tracking.
However, in the sea of available third-party management software, few possess the unparalleled tracking, automation, and streamlining capabilities of BCS—fulfilling and exceeding every facet of the above pillars.
The platform’s self-service and full-service offerings feature not only in-app messaging and a vendor portal, but instantaneous compliance flagging and correction capabilities, automated RFPs, notices, and much, much more.
The comprehensive software suite is uniquely equipped to empower you with unparalleled insight into all of your third-party management processes, from hiring and communications to risk mitigation and COI tracking—all with just a few clicks.
Businesses empowered to embrace the full benefits of modernization can revolutionize their vendor management process today, by investing in an asset that centralizes workflow, fosters safer connections, and most importantly, streamlines your most vital third-party processes so you can get back to focusing on what you do best: running your business.
To learn more, utilize our free software demo.
BCS is one of the leading COI management solutions on the market, offering self-service and full-service tracking, and facilitating streamlined onboarding via the BCS App, automated request for proposal (RFP) broadcasting, integrated communication tools, and more. Contact us today.
Among other features, it provides real-time compliance status updates and is easily customized to reflect your company’s unique compliance requirements, no matter how complex.
Beyond just tracking certificates, BCS delves into the real details of insurance coverage to unmask exclusions that could otherwise put your organization at risk.
Most solutions try to put a cap on this, but our compliance analysts handle all the inbound/outbound vendor support necessary to get them compliant.
Our advanced analytics tools provide the insight you need to make the best risk management decisions in real time.