In a Deloitte study about third party governance and risk management, 94% of executives interviewed expressed low confidence in their current tools used to manage third party risk.
When you start your search for a new car, chances are you’re not buying the first one you see. You read about best gas mileage, reliability, safety features, and accessories. You take your time talking to friends and family. You even go as far as to ask that random person in the grocery store parking lot about the car you’re interested in. Because at the end of the day, this vehicle will be tasked with keeping everyone safe, as well as reliably getting you from point A to point B and delivering great value for its price.
If this much research goes into the purchase of a car, why should your evaluation of potential and current suppliers be any less?
In the modern world of purchase to pay, your organisation has access to a world of suppliers thanks to open business networks. Connecting with suppliers across the globe opens up the door to finding the perfect supplier for your needs. But it also opens up the door to something not quite as pleasant—risk.
Failing to thoroughly get a handle on managing supplier risk could lead to:
Supply interruptions or discontinuities
Critical technology failures
Cyber attacks
Vendor fraud
Financial failure and cash flow issues
Environmental incidents
The last thing you want to have happen, particularly in a climate where social media moves news at the speed of light, is deal with a PR blow-up due to one of the above issues. Especially when it could’ve been controlled by ensuring supplier compliancy and risk management.
In order to take charge of supplier risk and ensure you have full visibility into your suppliers, we recommend taking these three important steps.
Enable “always-on” risk management: Know your suppliers. Know when change happens and provide timely notification to enable early action. When you provide continuous monitoring and timely notifications to your Procurement and AP teams, they’ll be empowered to better control their purchasing and payment processes.
Automate risk management: Automated risk management will free up time for strategic initiatives. So, instead of spending hours gathering supplier information and obsessively checking regulatory compliance mandates, you can leave these tedious processes to automation. Then, your time can be better allocated evaluating potential risk and taking preventative actions if the time arises.
Enable a systematic approach to supplier monitoring: Through automation, you can extend monitoring beyond your current top suppliers to reach new suppliers and eventually, give more visibility into your long-tail of suppliers.
Through Basware Vendor Manager, buyers can move the supplier information management responsibility to suppliers and use an external data service provider to improve supplier master data. Buyers can invite suppliers to join the Basware Network and further enrich supplier information against both Dun & Bradstreet and Mastercard Track global databases.
And now, Basware has partnered up with Mastercard to offer customers Mastercard Track DirectoryTMinformation through the Basware Source-to-Pay platform. Mastercard Track Trade Directory is a secure repository integrated directly into the Vendor Management process, that includes information such as:
Credit scores for 150 million companies worldwide
Sanctions lists (OFAC, HMT, UN & EU major lists)
Law enforcement
Financial regulator
PEP (Politically exposed persons)
Adverse media
Learn more about how data affects every facet of the S2P process in our whitepaper. Questions? Contact us!