Tech Time: 10 best practices for better vendor management

It’s 2019, and your credit union’s procedures and policies are more important than ever to ensure security compliance and meet industry standards. As a vendor or procurement manager, your department may face the challenge of improving your organization’s technology vendor and supplier management best practices and procedures.

Regulatory Challenges and Resources

The pressure of adhering to vendor management industry best practices stems from many areas. Fraud is a big concern within supplier management, and such corruption as kickbacks and bribes are a significant risk. Ensuring that your organization is using the best value supplier and products can also be difficult—working with weak or underperforming vendors is another ongoing risk.

To provide guidance on better vendor management and financial control, many federal, state and local government agencies have published procedures and policies for fair vendor management and procurement. For example, the United States Government Accountability Office recently issued updated guidance and improvement practices. The Office of the Comptroller General of the United States also issued guidance for management to implement controls for oversight and establish internal control standards in the Standards for Internal Control in the Federal Government in September 2014. The publication discusses establishing an effective internal control system that includes risk assessment, monitoring and reporting processes. When applied to third parties, these control processes aim to prevent such issues as unauthorized modifications to software or accepting inaccurate or fraudulent information from vendors.

 

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