3 Solutions for Updating Your Vendor Management After Going Remote or Hybrid

The shift to remote work has affected every aspect of how businesses operate, including how they work with vendors. If your company has gone fully or partially remote and hasn’t reevaluated its vendor management processes, it’s time to start.

Remote working

According to Pew Research Center, more than half of professionals who worked from home during the pandemic want to continue the practice, meaning remote work isn’t going anywhere. Even if your business can’t have a fully remote team, you might wind up allowing staff members to enjoy flexible, hybrid arrangements that combine in-person and remote work.

Remote work has some serious advantages for small businesses. It allows them to reduce office space, which can save on regular operating costs. It also helps them retain more of their best employees and attract great new hires looking for modern, adaptable work cultures.

However, remote work can put a strain on your vendor relationships if you’re not careful.

Changing Your Vendor Management Strategies for Remote Work Realities

As a small business leader, you rely on vendors to operate. Research shows that 30% of companies have agreements with anywhere from 500 to 4,999 third-party vendors at a given time. That’s a lot of paperwork, project management, and risk.

Vendors can expose your organization to a number of risks. Let’s say your remote employees regularly communicate via a third-party app. They discuss, exchange, and store customer information on the app. If the app vendor hasn’t taken the right security measures — and you haven’t either — your company could wind up the victim of a data breach or cyberattack. That type of major issue can cost, on average, around $200,000 to fix.

Data breaches aren’t the only reason to revisit your vendor management protocols in a remote-work world. Finding better ways to evaluate each vendor’s performance, pay them quickly, and maintain consistent communication with them can streamline and optimize your internal processes.

Business partnerships with vendors

Here are some ways to overcome vendor management risks related to remote work:

1. Conduct vendor assessments for all third-party partners

Performing vendor assessments allows you to quickly gauge which vendors might be riskier than others. You can assign vendors risk ratings according to different criteria, like whether they comply with regulations such as the General Data Protection Regulation. Then, you can work with your vendors to mitigate glaring risks and close gaps in security — or look for alternative vendors.

Your vendor assessments don’t have to include in-person assessments, especially if a vendor has moved to remote operations. Yet, you should still be able to “inspect” your vendor’s procedures remotely. For instance, you’ll want to know what your vendor is doing to keep your information safe.

Never assume that a vendor is protecting your data. Be sure to identify and address any areas where compliance violations could arise, especially if you’re in a highly regulated field such as finance or healthcare.

2. Watch for unauthorized testing of new vendor products

Be vigilant about preventing workers from downloading and testing third-party software, systems, and apps without permission and guidance. Although they might think they’re doing everyone a favor by trying out a potential tech stack add-on, they could be exposing your company to risk.

The same problem can occur when workers use vendor products on unsecured personal devices (such as tablets and laptops) or use public Wi-Fi to access vendor domains and portals. Set out straightforward rules for your remote work teams on how to protect corporate information.

3. Strengthen vendor communication

Responsible vendor management in the remote work era involves consistent, open dialogue with all your vendors. It’s much easier to talk with a vendor about challenges or questions (such as a questionably high invoice or desire to renegotiate your contract) if you’ve been speaking regularly.

Staying in touch with vendors takes time. That’s why larger companies have whole teams devoted to vendor management. Consider it part of overall due diligence, and remember that being proactive is ultimately more cost-effective than cleaning up preventable messes.

You rely on your vendors to help you run your business effectively and wow your customers. So, if your team members have migrated to all-remote work or a hybrid schedule, protect your company by refreshing your vendor management processes, too. In time, you’ll reap the financial benefits of proactively addressing cyberthreats and compliance issues.

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