What are vendor reviews and why are they important
Vendor review is a process by which a business can evaluate the quality of the vendor performance while also understanding any potential changes that the vendor may have when providing the product or service for the business. A vendor review process will assess a vendor’s capacity to maintain effective and appropriate security practices and other performance elements critical to an organization’s business.
If your business uses vendors for key services, it is important to schedule periodic vendor reviews as part of your vendor management process. When a business entrusts a vendor with the safety and integrity of critical business or customer data, the business must monitor that vendor to verify that the data will be both protected and available. A business can outsource specific activities and functions, but they cannot outsource the responsibility for any risks associated with those actions.
Vendor reviews start by measuring the vendor’s performance, making sure that the vendor is meeting the goals established by key performance indicators (KPIs) and service level agreements (SLAs) in the contract that you have with the vendor. During contracting it’s important to have KPIs and SLAs mutually agreed upon as benchmarks against which to measure the vendor’s performance. It is important to know what kind of professional characteristics that are important in your vendor relationship. You want to make sure that the vendor can respond to the business needs and have the employee capable to supply the service to you and answer questions when needed. Also, you may want to know what changes have taken place at the vendor, how does the vendor monitor their suppliers and make sure that the vendor does not have any compliance issues or defects.
Establishing and maintaining regular vendor review processes will help ensure that a business is effectively monitoring their vendors while also help with reducing risk and liability.