The importance of ongoing monitoring of vendor relationships

A crucial aspect of the Third-Party Relationship Life Cycle that is often overlooked is ongoing monitoring. Regularly monitoring vendors is vital for managing external risks and making sure that third parties adhere to compliance and performance standards throughout the duration of the relationship. The frequency of monitoring your vendor management program depends on various factors, such as the type of business relationship, vendor risk rating, vendor performance, and regulatory obligations.

To effectively monitor your vendors, begin with a risk assessment to evaluate the inherent risks they pose when introduced to your operations. This assessment will pinpoint areas that need careful oversight and establish how often you should conduct reviews, depending on the vendor’s associated risk levels. Next, define your monitoring criteria according to the vendor’s risk level. Establish thresholds and alert mechanisms within your monitoring system to identify any deviations from these criteria, enabling you to respond quickly to potential issues.

When establishing a monitoring process, choosing the appropriate third-party monitoring solution is crucial for supporting continuous oversight. Strunk’s Vendor
Manager software enables you to tailor your ongoing monitoring categories according to risk levels, automating the entire process. This improves efficiency and minimizes missed opportunities. Strunk’s software also helps track deviations and gives feedback on the vendor’s performance.

Ongoing monitoring is crucial for managing vendor risks, ensuring that vendors fulfill their contractual obligations, and adhering to regulatory standards. An effective vendor monitoring process enhances your overall vendor management program. Additionally, it serves as one of your most valuable tools to address minor issues before they escalate into major ones. Click here for more information.