Drop 90 percent of the drudge work, keep 100 percent of an effective assessment
Written by Josh Layne, Vice President of Vendor Management & Compliance
With the Covid-19 pandemic continuing to affect organizations across the world and the Great Resignation causing labor shortages like we’ve never seen, one non-renewable resource continues to be the highest in demand – Time.
With less people doing more work, there’s simply no time to stay competitive in this merger market, exceed customer’s or member’s expectations and conduct tedious due diligence reviews as thoroughly as expected.
Examiners, auditors and risk specialists know this, but will all tell you that you need to make time. Vendor management experts, including us, will recommend you make some time.
Examiners expect you to:
- Deep dive into each of the different documents you have in hand, like 100+ page SOC reports full of Klingon jargon, densely-formatted BCPs, vague security statements, complex financial statements and outdated insurance statements
- Assess every potential risk from every angle
- Make a decision about your “appetite” for risk and how you’ll “significantly reduce” and “effectively mitigate” each of the unlikely, though possible, risks you uncover
- Make detailed notes about your findings and decision so you can prove to everyone you did it and did it well
You have to follow each of these tedious steps five, 10 or 20 more times for every vendor, and are expected to do it again year over year.
You can try to make time to collect and review mountains of documents and data for all of your vendors, but with the competitive market and labor shortages, you’ll soon fine it’s not possible to handle these reviews completely and still have enough time to serve your customers or members.
So, what do you do? You can’t simply skip reviews. For a well-run and effective vendor management program to work, you need to identify risk and proactively manage potentially big risks when you uncover them. You need to know the big risks when making the hard decisions to renew, replace or renegotiate vendor contracts.
Maple Street has a solution for you – Order Street Smart Vendor Review Kits for your critical vendors.
Included in a Street Smart Vendor Review Kit
Each SSVRK includes the following items:
- SSAE-18 SOC Review Summary(ies)– for all relevant, received SOC reports
- Favorable/unfavorable auditor opinion
- Description of vendor’s system verification
- Controls testing, failures and vendor’s mitigating actions listed
- 4th parties and related vendor controls descriptions
- UCC’s/Complimentary User Entity Controls list + validation tools
- Financial Summary – includes 3 years of data, if available
- Assets, Liabilities, Net Worth, Income, and Cash Flow data captured, if reported
- Current Ratio, debt-to-equity, ROA, net profit margin, operating margin, AP-to-sales ratios calculated, if data is available
- Includes general guidance on interpreting ratios
- Insurance Review Summary – includes list of existing policy and coverage amounts
- Recommended policy types for your relevant contracted services listed
- Standard definitions of policy types and use cases listed for reference
- OFAC Pull – verifies vendor is not on the OFAC list and sanctioned by US Treasury Dept
SSVRKs remove the need for you to spend your time carefully reading, sifting, documenting and analyzing the documents. You instead spend your time reviewing the big risks we uncover and deciding if the risk is acceptable, and if it’s not, how you will stay in front of it.
How to order a Street Smart Vendor Review Kit
Maple Street’s Vendor Advantage System® clients can easily order a SSVRK by following these steps:
- Log into CADi
- Navigate to Vendors from the left-hand green pane
- Select Purchase Review Kit(s) button in upper right
- Using tool select:
- Year – current or immediate past years
- Vendor – any 1-Critical or opted-in 2-Important vendors
- Subscribe – if you want a kit annually (1-Critical vendors only)
- Select Request Review Kit in lower right, click OK in warning pop
Street Smart Vendor Review Kit order deadline
Maple Street gathers due diligence at set times twice each year, with dedicated “campaigns” in the spring and fall. For the upcoming spring campaign, SSVRKs orders must be placed by Tuesday, March 1, 2022, to receive in June. The next opportunity to order kits will be in July to receive in November. We’ve implemented these timeframes for resourcing purposes. This aligns with Maple Street’s due diligence collection cycles and most importantly, keeps costs down for you!
If you’re looking to cut down 90 percent of the drudge work, while still keeping 100 percent of an effective assessment, our Street Smart Vendor Review Kits can help. To learn more, call 800-513-6839 or email VendorCompliance@maplestreetinc.com.