Given that third party vendors and affiliations have become part of day-to-day operations. In this blog post our partners, MetricStream recommends to strengthen your third party management program. This post originally appeared on the MetricStream blog and was published here with permission.
For one of the world’s largest automotive manufacturers, the year 2016 starts off on a less than a note, when the company produces millions of cars every year, a shortage of components. The incident a reminder of just how much companies have come to rely on their third parties, and how much a single supply chain can affect a company’s performance.
A third-party-related regulations, a robust third-party management program can make all the difference. Here are five best practices for taking your third-party management program to the next level:
Effectively Assess and Monitor Third-Party Risks
Third-party risks can have a direct impact on company profits and brand value. It is imperative, therefore, to identify these risks in a timely manner, and to implement the appropriate controls and control testing processes. So, the contracts and responsibilities that outline the roles and responsibilities of all parties in risk mitigation. If there are any fourth parties involved, make sure you are informed about them, and include them in the scope of screening and risk management processes. Dow Jones and D & B, which can be invaluable in flagging high-risk third parties before they cause a failure.
Conduct Third-Party Screening, Onboarding, and Due Diligence
While conducting initial third-party screening, a good approach to third party by risk factors on various factors, and then to define and prioritize screening and due diligence processes accordingly. On-boarding is another critical step in ensuring that you have all the necessary third-party data to begin the relationship. Many organizations also set up real-time third-party data feeds, and monitor their third parties against global sanctions lists, adverse media reports, and other data to identify areas of concern.
Integrate and Streamline Third-Party Management Processes
Often, each department in a company manages their third parties differently from other departments. This siloed approach can lead to redundancies. To avoid these issues, you want to standardize and streamline your third-party management processes across departments and functions. Also, make third-party information available to facilitate oversight and accountability, and to ensure that nothing falls through the cracks.
Evaluate the Effectiveness of Your Third-Party Management Program
If so, what are you going to do? Make sure that all third-party management resources are available, have their responsibilities defined, and are working as planned. A 360-degree view of the third-party ecosystem is a must.
A scalable and integrated GRC technology platform can help you manage multiple third parties efficiently, and provide greater visibility into issues and compliance issues. Technology can thus streamline and automate third-party management processes, and consolidate and roll up third-party risk intelligence to support decision-making. Some solutions integrate with industry sources and validate third-party data. Some provide assessment and assessment capabilities for due-diligence, compliance monitoring, and control evaluations.