M B Taylor Associates: Risk Management Services

Test Image Risk Management Services
Do your vendors create value?

It is a simple question. Unfortunately, vendors are sometimes taken for granted and become part of the fabric of an organization. As your people are periodically evaluated, do you do the same with your vendors/consultants?

One simple way to do so is to conduct a risk evaluation of your vendors. It will help clarify those vendors who have strategic impact to your organization, those who are important to effectively leverage resources and support the desired direction of the organization, and those who are bottlenecks to effectiveness – or at least have you question their effectiveness.

For example, a review with one organization showed that they had multiple vendors doing the same service. The subject area was considered critical to employee development and yet upon review was found to be a bottleneck in producing the desired results. The program was inconsistent due to having a variety of vendors, with varied service level expectations and pricing. This was not a vendor issue. The vendors were doing what the person who engaged them to do wanted them to do. This was an organization issue, because staff members at different locations were told they needed the service, and were left to their own desires as to what that meant in terms of service level and cost of service. The organization was losing the opportunity to insure a consistent program, and message, was being delivered across the organization - let alone loss of leverage to negotiate a volume of service.

The remedy, in this instance, was that the work was bid and the list of approved vendors was reduced to two – a preferred provider and a back-up. The result was a more consistent program, a more satisfied line management, and a lower total organization cost. It eliminated both the confusion over which vendor should be used and it also eliminated the “my vendor is better than your vendor” syndrome. In this case, neither the lowest nor the highest cost provider was selected. The lowest cost provider could not provide some of the critical services deemed necessary, and the highest cost provider was, well, high cost.

This is a long story to say that when an orderly approach was taken to prudently spend money on a service, the service level increased and the overall cost of the program decreased.

We can assist you in the risk evaluation process to insure that the money you are spending on your vendors/consultants is resulting in cost effective, and successful, services in line with your organizations needs.