Today, financial institutions are adopting more new technology solutions to provide better services to customers — and credit unions are not exempt from this growing trend. However, the process of vetting and officially onboarding the right technology vendor can be a lengthy and cumbersome one, creating challenges for employees, customers, and vendors alike. To ensure satisfaction and seamless service, credit unions must intelligently and consistently streamline and automate their vendor management process with the right digital tools.
Current challenges in vendor management
Credit unions face several challenges in vendor management, primarily driven by the growing necessity to onboard new vendors for technological advancements while concurrently managing existing vendor relationships. The manual and repetitive nature of purchasing offices’ processes can quickly reach maximum capacity, hindering efficiency. The onboarding of new vendors is further complicated by an arduous, lengthy, and inconsistent procedure encompassing stages such as research, vetting, review, and approval. Additionally, the management of vendor contracts poses difficulties, requiring streamlined processes to ensure effective oversight and compliance.
Digitize the vendor management process in a smart and strategic way
To digitize the vendor management process most effectively, start by utilizing electronic forms as a comprehensive platform for capturing vendor information digitally. This includes requesting information changes and progressing through stages like vendor research, vetting, risk classification, due diligence, vendor comparison, contract generation, and official onboarding. Enable vendors to submit registration forms through a public portal and securely share documentation using external information-sharing tools.
Implement risk classification with conditional logics, automate workflows for verification and analysis, and streamline tasks, reviews, and approvals through process automation within the organization. Set automatic notifications at different vendor stages, such as renewal dates, to prompt reviews, contract generation, and ensure the continuous lifecycle. Enhance connectivity by integrating with the vendor management system through APIs, simplifying the creation of new vendor profiles, updates, and status management.
Centralize vendor documentation in a secure, reliable location
To centralize all vendor documentation securely and consistently, begin by generating vendor contracts and onboarding packets using predefined workflows and templates. Make sure to store all resulting documents and supporting information in a dedicated document repository. Apply records retention policies to ensure compliance with regulations and legal requirements, systematically managing document lifecycles.
Then, improve search-ability, team collaboration, and document processing by applying metadata to categorize and organize documents. Lastly, prioritize data security by implementing granular access rights for various stakeholders at different stages, ensuring that sensitive information is protected throughout the vendor document management process. This comprehensive approach establishes a centralized, organized, and secure repository for vendor documentation.
Optimize operational costs and create more effective processes
To optimize operational costs and enhance efficiency, first, eliminate paper-based vendor management to reduce expenses associated with physical storage, printing, and transportation. Shift towards a digital approach for capturing, storing, and managing vendor information intelligently to ensure the amount paid/invoiced is aligned with the signed contract. Next, establish a transparent and accountable vendor management process, fostering trust and minimizing the risk of human errors — such as forgetting contract dates or auto-renewals — or disputes.
Implementing an analytic reporting dashboard allows for real-time monitoring of processes and identification of bottlenecks. This data-driven approach enables more informed decision-making to clear roadblocks and streamline workflows. Lastly, meet the increasing demand to onboard more vendors without the need for additional resources by leveraging intelligent and automated processes, ensuring scalability without a proportional increase in costs.
Enhance accuracy and satisfaction while driving productivity
Enhancing accuracy and driving productivity in vendor management involves minimizing errors from the outset. To achieve this, avoid inappropriate or inaccurate information entry during the forms process, eliminating the need for subsequent reviews. Additionally, ensure that the latest version of contracts and documentation is consistently used, mitigating the risk of discrepancies or outdated information.
Furthermore, to enhance both employee and vendor satisfaction, reduce manual and repetitive steps in vendor management processes. This not only allows employees to allocate their time more effectively to other priorities but also creates automated and streamlined procedures within the purchasing department. These improvements contribute to maintaining vendor relationships more efficiently and providing vendors with transparent status updates throughout the partnership, fostering better communication and satisfaction.
As financial institutions increasingly adopt new solutions to better serve customers, the imperative to streamline and automate vendor management processes becomes crucial. The challenges faced by credit unions in managing vendors, from the onboarding process to contract management, underscore the need for a digital transformation in this area. By approaching the vendor management process strategically, credit union leaders can not only overcome current challenges but also position themselves to meet the evolving demands of the financial landscape.
This article was written in collaboration with CDP, a Laserfiche solution provider.