Insecure and mismanaged third parties like vendors, cloud companies providing software applications or infrastructure, and supply chain partners are directly correlated with many data breaches and hacks. In fact, recent research revealed that 59% of data breaches were related to a third party.
Amongst all, one of the most crucial aspects of managing third-party risk is having good onboarding processes when giving these entities access. That includes smooth and secure vendor onboarding as well as offboarding. Each vendor in your company’s supply chain has a lifecycle that starts with the initial review and onboarding and ends with the termination of the vendor’s contract. Be it a SaaS vendor or tech vendor, a vendor who has been onboarded incorrectly may have far too much access, insufficient access, or even be prohibited by their employers. A similarly significant yet often neglected aspect is robust offboarding policies. When terminating the vendor, an organization needs to immediately remove any dormant or discontinued representatives to safeguard your organization from security threats and eliminate any vulnerability from those shared credentials.
Best Practices for Vendor Onboarding
No two organizations are identical, so your vendor onboarding process might not be similar to your industry or even direct competitors. Nevertheless, one of the most critical aspects of the vendor onboarding process is making sure the prospective supplier complies with the laws, regulations, and standards required by your organization.
- Involve your C-suite in the onboarding process for seamless supplier onboarding
- Assign a person in your organization to manage the vendor onboarding checklist, verify each item, and ensure all steps are completed
- Create a proper plan for each vendor you shortlist and follow up accordingly
- Be flexible and adapt your onboarding process to each vendor’s uniqueness
- Ensure your vendors know what’s expected of them regarding approval time, documents required, certifications, and compliance standards
- Invest in technology and automate paper-based mundane, error-prone processes
Following the award of a vendor and the start of a vendor contract, you must check that they adhere to your standards and comply with all agreed-upon norms. Not only will a vendor onboarding process strengthen your business relationships, it will also help your organization to mitigate risks, boost compliance, increase ROI, and streamline processes and increase efficiency.
Best Practices for Vendor Offboarding
Vendor onboarding and vendor offboarding are equally crucial for any organization. While vendor offboarding may be a lower priority than negotiation and onboarding, the offboarding policy has value. It can save time, money, and frustration at the end of a vendor contract and ensure a smooth transition for users.
When it comes to wrapping up a vendor contract, there should be a systematic approach consisting of many checks and double-checks.
- Ensure nothing is missed as per vendor contract and full compliance is achieved
- Ensure stipulated notice period of termination (30 days or 60 days or any other as mentioned in the contract) has been met
- Disable the vendor or vendor employee access to any crucial information, IT systems, or other resources
- Ensure all your intellectual property, and physical property is returned back to your organization, very much like terminating an employee
- Document the condition of the equipment (if any) when the vendor returns it
- Finalize and settle all payments so that nothing remains outstanding or unresolved
- At times, the scope of an engagement can change and might divert from the original agreement. If there is any divergence from the original contract, sort out the differences and document the related processes from either end
- When a vendor’s relationship ends at the end of the contract, you should update the vendor’s profile, your database, and credentials
To remain competitive and get more out of your vendor relationships, you must adopt new technologies to streamline your vendor lifecycle management processes – including offboarding. Automate vendor lifecycle management to build better vendor relationships by improving engagement and transparency and by reducing risks. You can source preferred vendors using sourcing management solutions, manage vendor contracts, and ensure contract compliance with contract lifecycle management solutions. The intelligent source-to-contract workflows help measure and evaluate vendors removing the guesswork for you and make your vendor lifecycle management much smoother.