Sourcing and vendor management (SVM) clients are telling Forrester Research that vendor risk is becoming a critical issue.
Most firms have intense due diligence processes when hiring providers, but those processes have two flaws — they are one-time activities and they focus almost exclusively on deal risk rather than the vendor’s impact on corporate risk.
Now the business’ focus on growth and emerging technologies is introducing even more vendors into the mix. This stretches already resource-limited teams by adding to the volume of risk reviews but also changing the answers to key risk questions.
Smart SVM teams will start with assessing the impact of vendors on key corporate risks, then incorporating risk management into all phases of the sourcing life cycle, with specific questions and plans to address risks that do occur.
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