IT Vendor Management – Achieving Risk Transparency and Collaboration
The goal of digitalisation, automation and cost-reduction lead many organisations to outsource IT services, resulting in the next hurdle: how to effectively manage these vendors and associated vendor risk. This article looks at the obligations organisation’s face in the management of these suppliers, and ways in which Alyne can assist in making your vendor management processes more transparent, collaborative and efficient, all within a centralised platform.
Digitised vendor management processes for successful outsourced IT services
Digitisation, automation and cost reduction – three prevailing buzz words used across most companies today irrespective of size – and they aren’t showing signs of stopping. There is no doubt that these goals are baked into many organisations’ strategies for the short to medium term, however in many cases, in order to accelerate their development usually comes the important question: “to make or to buy?” For most companies however, the decision of whether you “make or buy” (another popular buzz phrase), is increasingly being made in favour of “buy” – and for good reason. The market offers solutions with many razor-sharp defined fields of application. In order to be able to use these tools and to realise their positive benefits on processes and service delivery quickly, IT services are often outsourced.
A benefit of outsourcing your IT services is that it eliminates the risk of manoeuvring into a dead end – something you might easily encounter with in-house development. However, on the contrary, it also does not come without inherent risk to your business and requires effective IT vendor risk management.
In addition to the challenge of actually using and integrating the newly purchased IT services, companies also face further obligations, such as:
- The ongoing assurance of compliance with regulatory requirements (e.g. EBA Guidelines, MaRisk), especially since auditors and supervisory authorities are placing more and more importance on these topics
- Identifying, assessing and managing the risks associated with the use of IT services and IT service providers
- The continuous management of services
- The establishment and maintenance of a central directory for IT services and relevant IT service providers
Furthermore, in a multi-vendor environment, transparency and traceability are becoming increasingly more important in order to create a common working platform for procurement, service users, risk managers and management roles. Solutions that offer a focussed third party risk management framework can enhance not only the transparency aspect, but provide greater business security through assurance of vendor compliance. Managing vendors, related data and potential risk is a critical component to your organisation’s overall management and risk management success. Shortfalls can pose a series of risks spanning reputational damage, as well as financial, compliance and regulatory risks. At the least, an effective vendor management program will enable you to secure operational and financial efficiencies, allowing you to focus on your core business function.
Why vendor management processes must work
One thing is surprising when you look at the maturity of the IT services purchased and the complexity of the problems they have to solve, and that is: The means by which they are managed.
Even in some DAX or Fortune 500 companies, vendor (and vendor risk) management is still conducted across distributed office software and the often (and rightly) berated Excel spreadsheet. Risk Management conducts the assessment process of their IT service vendors through questionnaires that are sent back and forth over email. From this, the provided answers and the risks that were identified during the process are consolidated in an “island” type solution within the office software at hand. Procurement then collects the meta and contract data from there to keep within its own separate island solution. With setups like these, it is hard not to see the obvious challenges. Teams have a tremendous task to link their findings identify potential risks. Above all, processes such as these make it difficult to collaborate – something that is particularly necessary, but failure of which is often evident in the regular merging of deliveries and consolidations for management reporting. At this point, we don’t even have to start with the sustainability issues it poses for audit procedures.
Management for outsourced IT service providers, made simple
I would not have written this blog post if I did not think that Alyne has the vendor management capability to address and resolve the IT outsourcing challenges described above.
Alyne makes the decision to “buy” outsourced IT services easier, by providing a solution to effectively manage IT service provider data and potential risk, through:
- Collaborative creation and maintenance of a central IT service directory and associated service providers, with the ability for integration into the existing system landscape
- Modelling and visualisation of vendor relationships and dependencies
- Risk classification for greater risk understanding, segmentation and control
- The ability to perform compliance and risk assessments at scale across your vendor base, where results are displayed intuitively, all within a closed platform
- Risk identification that indicate key areas that require focus, with collaborative in-app mitigation plans
- A single source of truth for management reporting, where data is taken from one source and lives within one platform
Looking to achieve greater risk transparency and collaboration?
These are some of the key features in Alyne that can assist in making your vendor management process more transparent, collaborative and efficient.
Are you Interested in learning how Alyne’s supplier risk management capabilities can replace your isolated solutions and make your IT service provider management resilient? Schedule a meeting with an Alyne Expert.