It is something that we all end up leaning on after a while. Using third parties or external resources can improve our productivity, improve our time-to-market, and give us an advantage, not to mention decrease our budget. But working with external resources is not just handing over the reins to them. It’s about making sure that when we are working with these external resources, that we use the best practices. With this in mind, what are the best practices to enhance our third-party management approach?

 

Conduct Due Diligence

It is your responsibility to properly onboard and screen third parties. Doing this gives you a far better understanding of the firm you want to work with. Part of the onboarding process should consist of you identifying the various risks associated with the product or the service. In addition to this, you should consider the location and other key components. For example, companies like Brunel provide third-party inspections and you can work with a company such as this, but they also conduct their own due diligence. They are a company that recommends other firms near to you to work on the act of inspecting your equipment. But the due diligence process doesn’t end when you onboard them, you still need to continue to identify risk areas.

 

Guarantee Appropriate Investment

You are naturally putting your investments into an external party where you hope that productivity and efficiency are increased exponentially. Ideally, the investment should focus on ensuring a multitude of compliance. For example, regulatory compliance is something that needs touching upon, but when you are managing third-party risk and improving their performance, you’ve got to incorporate the appropriate levels of staffing. This could mean getting hired help on your side of the process. But in addition to this, you need to work hard at guaranteeing sufficient communication. Investing in a third party is not just about throwing money in someone’s general direction.

 

Making the Most of Technology

Everybody has relied more on technology in the last twelve months to keep their business afloat than at any time during its operation. When it comes to working with an external supplier or provider, technology will strengthen the risk assessments, as well as improved monitoring, management, and compliance. It also helps to streamline the due diligence processes, while also incorporating automation when necessary. Technology becomes invaluable when working with an external party because this becomes the main source of communication. Using advanced technology solutions can encourage you to identify the risks better, but also keeps risks in check. 

The modern environment is complex, and when it comes to outsourcing, it is vital that you build up the appropriate initiatives to protect your business and your revenue. Be proactive, be diligent, but also make sure that you are transparent. Working with any external party is primarily about communication. We can run the risk of becoming complacent when we find a great third party, where we leave them to it. But this does not set both sides up for a fruitful working relationship.