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4 Tips for Choosing a Third-party Vendor

procurement and vendor managementWe have already discussed the risks of third-party vendors. However, it is something which is becoming quite crucial to your business success. No matter the challenges, outsourcing services through experienced third-party vendors allows you to:

  • Advance the quality of your services
  • Augment the operational and financial efficiencies
  • Lower your costs
  • Increase the availability of your services
  • Accelerate service delivery
  • Help you focus on the core business functions

Nevertheless, as we have raised the concerns, we will also layout strategies to work with a third-party vendor, so you can collaborate your efforts and build relationship which can help you in long-term to achieve your business objectives.

In this blog, we will walk through different tips for identifying and profiling vendors and what things evaluate when choosing third-party vendors carefully. 

Evaluate their Cybersecurity Policies

cybersecurity complianceWhile paying attention to the experience and reputation of your third-party vendor is really crucial, it is also crucial to request their cybersecurity policies and examine those policies in-depth.

In particular, we would ask you to take a closer look at their security practices and find an answer to these questions:

  • Does your third-party vendor comply with the same regulations that you need to comply with?
  • What security policies and disaster recovery plans your vendor have in place?
  • Which person in their team is responsible for ensuring data protection and preventing data breaches?
  • Do they perform data and server backups regularly?
  • How do they monitor who exactly can access your sensitive data?

We will insist on comparing their cybersecurity practices to match your organization’s and make sure that there are no weak spots or hidden risks. Also, make sure to meet your potential subcontractors in person and see how they work and discuss their security practices in person.

Performing Due Diligence

Before your company can partner with any third-party vendor, we recommend that you identify your needs. The two most common reasons for choosing a third-party provider are:

  • In-house employees are not able to meet the opportunity
  • Outsourcing is a more cost-effective option

Once you identify your specific needs, you can accordingly to establish your relationship with the third-party vendor. However, we also need to do due diligence before we can enter into a contract. 

In this respect, businesses should perform an in-depth assessment of the vendor’s abilities. A firm can start by asking about the necessary licenses and audits.

Also, review the financial condition of the vendors. This can be determined by reviewing its audited financial statement. Any business would want to partner with a vendor who is in good financial health and which can offer uninterrupted service.

Analyzing Service-Level Agreements

service level agreementsNext thing in the list, be extra attentive to SLAs with your third-party vendors. Ensure that they make your security part of their deal. You will need to take into account everything. For instance, what kind of sensitive information your third-party vendor can access and store, what security precautions they make to ensure data protection, what compliance regulations they need to follow and how often they perform audits. Think of every detail relevant to your business and make sure everything is mentioned in your SLA.

Cost Control and Savings

Possibly the most significant driver when choosing a third-party vendor is cost. If you consider the overheads associated with in-house technicians, expenses can go really high, especially, with the cost of staffing, training, asset and inventory management, etc.

Third-party vendors typically can spread these costs out. Try and get prices from different vendors and decide on who can give your organization the best value for money. However, also consider the array of services the vendor offers in a particular package. Sometimes a vendor may provide more services than what your firm needs and charge more; or other providers may not offer as many functions or services and consequently, charge less.

If you are managing your I.T. vendors on your own, the responsibility of handling risks falls on you too. To protect your business from issues associated with profitability, reputation, and regulation, work with an experienced third-party vendor management service. At GRIP I.T., we offer you experienced and well-rounded vendor management services along with complete risk management. 

If you want to know more, how we do this, get in touch with our team