How to Develop an Effective Vendor Onboarding Process
Onboarding a new vendor is a crucial first step to building a lasting business relationship. It can mitigate risk by standardizing multiple industry- or corporate-specific compliance, vetting, and validation steps that help bypass problematic vendors.
The process involves a series of complex tasks spread across the entire enterprise. How can you ensure a prospective vendor is compliant with laws, regulations, and corporate standards?
Understanding the complexities of onboarding a vendor
Vendor onboarding can be a complicated process. It’s crucial to think through all of the steps necessary to ensure the vendor takes off smoothly — compliant, with proper security measures and clear expectations.
Various departments are involved in the collaboration, review, and approval process:
- Risk management
- Accounts payable
- Human resources
The enterprise-wide goal is to evaluate vendor cost, risk, and capabilities.
It can be laborious to develop efficient workflows and communication. However, without a structured process and plan you risk losing vital business and profit margins. Establishing a consistent checklist prepares you for potential obstacles and ensures that the right vendors are brought onboard.
A designated point person within your company can overcome mistakes that stem from miscommunication. It’s their responsibility to verify each item on the checklist. Automating processes when possible can make for a less overwhelming experience. The point person can also make sure an onboarding checklist has enough flexibility to adapt to individual vendors and the services they provide.
Choosing a robust onboarding review package
You need a vendor risk management (VRM) software solution that aids customers in performing comprehensive due diligence reviews of a new vendor. Often, this is time-critical and must be completed quickly.
Utilize a VRM solution that streamlines the collection and assessment of necessary data in a timely fashion with reviews, analyses, and reports. Robust systems include includes a one-page vendor summary in addition to reports.
Some VRM solutions offer the option of outsourcing your organization’s onboarding process. An outsourcing service can provide your project team with the required documentation to quickly review and approve or reject potential vendors.
Download our infographic to learn how VendorInsight®, part of Mitratech’s Enterprise Compliance Suite (ECS), helps ensure vendors are healthy and in compliance with your organization’s requirements.