You’ve finished your due diligence reviews – now what?

If you’re not doing anything in between reviews, you could be making the decision and contract negotiation process harder and more stressful than it needs to be. At Maple Street, we highly recommend doing some formal monitoring of key vendors during these periods.

Monitoring is as simple as making a note for later reference to use when you’re ready to perform an action, follow up on recurring issues or make a contract decision.

 Our team has put together a few guidelines to efficiently and effectively do ongoing monitoring that will lead to better risk management and definitely better outcomes in your vendors’ performance.

Key vendor relationship risk areas to monitor

To avoid the frustration of trying to watch too many occurrences, stay focused on select areas or events when monitoring your vendors. For example, you should focus your attention on:

• Ongoing performance issues: member or customer complaints, uptime or access issues, response time and issue resolution
• Financial concerns: unexpected price increases, overbilling or repeated back billing
• Past due diligence review findings: insufficient documentation, financial health, insurance coverage concerns
• Vendor changes or formal notifications: new ownership, mergers, new support services structure, new billing or invoice payment systems
• News about the vendor: data breach, bankruptcy, legal issues
  
  

How to use ongoing monitoring actions to get better vendor performance

• Stay focused on the most critical vendors, the repeat offenders and troublemakers, not every single vendor (unless you have the resources to do so).
• Be consistent and find a monitoring cadence that works for you so you can stick to it.
• Be concise and clear when making notes.
• Use ongoing monitoring to build the case for your decision to renew, renegotiate or replace the vendor’s contract to your leadership team and stakeholders.
• Use ongoing monitoring as evidence when going to your vendor to demand change, either now or as part of a renegotiation strategy.
• Use ongoing monitoring as “must haves” when shopping for a new vendor, the list of problems that must be resolved in a new relationship.
• Use ongoing monitoring in your new contract negotiations. The new vendor must assure you in clear contract language (not just in sales presentations) that it has an obligation to perform better than the vendor it’s replacing.
  
  

To learn more about ongoing monitoring and how Maple Street’s Vendor Advantage System® will reduce expenses, improve vendor performance and manage risk, give us a call at 800-513-6839, email mssales@maplestreetinc.com or visit www.maplestreet.com/learn.

Article by Maple Street Inc., a California and Nevada Credit Union Leagues business partner.