This applies as you consider what you really want from your overall Vendor Management Plan. To illustrate the point, I will use a comparison of building a house and building your Vendor Management Plan.
Much the way an architect draws up a plan for a house, you will need to detail the type of program you want for Vendor Management. The plan can be complex or simple based on your needs and the “end you have in mind”. Ask yourself a very basic question to get things started. “Do I want to manage my vendors more effectively?” or “Do I just want to be compliant and satisfy the NCUA and State Regulators?” or is it a blend of the two answers? Hopefully you will understand that properly vetting and managing your vendors will pay dividends and reduce risk for your credit union. In the long run it is wise to build a strong Vendor Management Program which just happens to make you compliant with regulators.
Building a house requires a good foundation. The foundation of Vendor Management starts with implementing the vision and goals you have for the program. It also contains several business decisions including outsourcing versus using internal resources. It also includes adoption of a vendor management policy by the Board. Keep in mind the NCUA will review what you do in practice compared to the policy adopted by the credit union. As you refine your plan be sure to carefully follow the dynamics contained in the NCUA’s Supervisory Letter 07-01.
SUPPORT COLUMNS / WALLS
Supporting structure for your Vendor Management plan is critical, as are support columns for a house. As detailed in the NCUA’s Supervisory Letter, there are three major components to a vendor management plan.
Another untapped aspect of a vendor management plan is to hold “Accountability Meetings” with vendors. This regular Accountability Meeting allows you to measure their performance to expectations and make corrective changes to meet program goals. You can develop templates for these meetings which put the onus on the vendor for reporting on accountability to established objectives stated in the sales process. Someone said, “What gets measured gets done!”