Procurement and Third Party Risk

Introduction

Businesses are unsure how to transform their sourcing and procurement teams to reduce costs and increase value from their supplier relationships. At the same time due to increased scrutiny from multiple international regulatory bodies and internal audit, risk and controls have become a major factor when considering the over all third party relationships.

Senior management are pushing procurement to drive more controls to manage rogue spend and a lack of control of the vendors and contracts that do not drive the true value of the relationships with lack of SLAs, visibility, and penalties for performance issues.

With the drive to reduce costs and become partners with the businesses it has become imperative that senior sourcing and procurement leaders look to outside help to transform either the whole function or the areas that are considered as under performing.

Prospect 33 delivers strategic and tactical services which drives solutions for the function to make structural changes in policy and procedures, talent, technology that aid in driving the cost savings and controls the senior leaders seek. During our initial review we would work with your senior leaders to drive solutions and change to improve costs, control risk and improve efficiencies.

Procurement Review Process

Strategic review to to assess overall procurement process and procedures and to drive improvement plan

Third Party Risk Management

Policy and Process Review

Current State

Assessment of current state for policy and program to see if current regulatory requirements are met for third parties from onboarding to termination and identify deficiencies.

3rd Party Inventory

Establish a clear definition and work to produce a complete and accurate inventory of third party relationships and services.

Risk Controls

Review of how third party risk is implemented in the organization, do you have the controls in place to escalate the risk internally.

Inherent Risk

Assess the inherent risk controls and scoring to see if they met best practices and identify the risks to be assessed.

Residual Risk

Analyze the process to accept high residual risk with tier one and two vendors , do you have a documented process to accept these risks and to monitor remediation efforts.

Systems and Technology

Modifying existing solution to control third party risk or selecting new bespoke tools through a rigorous RFP process.

Databases

Assess access to external or internal databases to monitor third parties before and after onboarding and after contract has been signed.

Analytics

Analyze current risk reporting and dashboards for data quality. Work with internal teams to improve and meet senior management needs.

Summary

Prospect 33 using its network of experienced procurement leaders will work to develop strategic plans to improve and alleviate the following pressure points for your organization and any as identified through the initial review period.

Cost savings though negotiation, rationalization and volume discounts and better category management.

Increased controls for the business to manage all spending and make sure everything is pre-approved before purchase.

Technology improvements to make purchasing efficient with ever improving software environment.

Third party risk management process improvements to meet regulatory and internal audit controls.

Contract Risk and SLA management.
 
 

Policy and procedures that manage all spend and training for staff to acknowledge these processes.