SIG University Certified Supplier Management Professional (CSMP) program graduate Daniel Koumides shares how the governance program, when jointly established and managed, increases the supplier's engagement with the business.

SIG University Certified Supplier Management Professional (CSMP) program graduate Megan Moore shares her experience of the direct application of the training material in real life and how important it is to understand your company's governance program.

SIG University Certified Third-Party Risk Management Professional (C3PRMP) program graduate Jai Chinnakonda shares why every organization should adopt integrated third-party risk governance and management into their team structure.

Organizations increasingly depend on third-party service providers of varying sizes, including start-ups, to meet the digital age challenges of technological innovation and heightened competition. In a quest to succeed, organizations involved in digital transformation initiatives partner with more innovative start-ups, thereby increasing third-party risk. There is a progressive shift from a traditional 'cost' focus to a 'shared risk' and 'value-driven partnership.

This is also a growing reflection of organizational recognition that third parties can create strategic win-win opportunities. These new-age partnerships require a different approach to managing third-party risks. Organizations that can continuously monitor and take on calculated risks with their engagement with third parties are the ones that will be able to Stay Ahead. This article reflects on how technology can help support a new Integrated third-party governance and risk management approach.

Traditional Third-Party Risk Management Approach – the challenges 

Traditionally, organizations had relied on total upfront due diligence for risk mitigation. This approach attempts to identify potential third-party risks upfront before contracting, resulting in longer onboarding time. Typically, this involves sharing due-diligence questionnaires and collating responses from third parties. This only provides a point-in-time assessment – a highly ineffective approach prone to failures.

SIG University Certified Supplier Management Professional (CSMP) program graduate Grzegorz A. Pioruński shares a different perspective on how to implement modern governance into a supplier-vendor relationship.

Some years ago, I heard someone who had not been exposed to significant processes and had no chance to consider all industry connections of a business event say: “Why must present-day everything be a project? This is just a task to do.” These words are the opposite of how I see modern governance in business and risk management.

If you take a closer look, anything we do is a kind of project, smaller or larger, but on nearly every occasion, we plan action, steps, workflow, risk, and expected outcome. Whether or not we are aware of this, this is a fact. Even such a simple task as going to a store to purchase a loaf of bread can be described as a project.

We do plan when to go (the store must be open), what to wear outdoors (depending on weather conditions), we do plan to have some money in our pocket (enough to pay, and not too much “just in case”), we do try crossing roads safely, we do expect to return home with the said bread. The deeper you consider it, the more details and sub-tasks you can recognize. Sometimes you do this on your own; on other occasions, you may like involving other stakeholders, whomever it may mean.

The same strategy we shall apply in business. The more critical the process or, the more significant business it is, the more risky your operation may be, and the more carefully you should prepare, perform and govern the project.

SIG University Certified Supplier Management Professional (CSMP) program graduate Adrienne Westerfield outlines how supplier governance programs and relationships are extremely beneficial to all stakeholders involved and can help drive business success.

What is a governance program? During the SIG University Certified Supplier Management Professional (CSMP) program, while learning unfamiliar governance terminology, I realized I had been involved with creating and establishing various types of governance throughout my career. Supplier governance is a relationship or framework that is mutually agreed upon. Both the company and the supplier benefit from this relationship. The framework can be at a corporate, business unit or contract level depending on the needs and value sought by both parties.

If it is an established relationship that has never been formalized, adding governance will ensure contract compliance. It will mitigate risks for both parties while making sure the objectives of the relationship are met. Over time, the goals for each company may change so that the structure can be re-evaluated accordingly and adjustments made to align with a new direction or specific initiatives. A more structured governance framework will also define the roles and responsibilities for teams, departments and individuals at each company, which will mitigate the risk of any tasks remaining incomplete or done incorrectly.