Every organization will require intermediaries to tie hands with them in order to carry out their daily business operations successfully. These intermediaries could be merchants or service providers who exist across the economy and they could be in goods and manufacture, retail servicing, internet hosting or any other trade one could think of. It’s almost impossible to survive without partnering with them.
Nevertheless, dealing with them is never easy and various aspects need to be looked into before and after you venture out with such parties.
Therefore, an organization needs to handle the third party vendor administration process carefully so that it might have a lasting impact on the business as well as the business relationships with the contractors.
How do these intermediaries impact a business organization?
They play a vital role in the organization’s daily operations.
They have a critical impact on the success of the business strategic projects
The contracts made are usually long-term
They have potential for significant financial implications. Could have a direct impact on the profits or losses in an organization.
They cannot be changed overnight due to clauses in the agreements that they have come to terms with.
The organization will require frequent interaction and collaboration for disputes or the intermediary may be offering complex problem-resolution mechanisms.
They may have access to or manage substantial, critical or sensitive data pertaining to the organization.
We find that there are inherent risks too involved while partnering with these intermediaries. Hence, a thorough risk assessment process should also be incorporated in the third party vendor management scenario.
Plan to administer the relationship
Discussing the risks, outlining the strategic purposes, assessing the complexity of arrangements, prior to signing the agreement.
Due diligence and intermediary selection
Reviewing intermediary’s overall business strategy and goals, evaluating their legal and regulatory compliance program, assessing the financial condition, evaluating their depth of resources and previous experience.
Negotiating the contract
Nature and scope of the arrangement, performance measures which define expectations and responsibilities, compliance with specific laws, regulations, guidance, and self-regulatory standards, describe compensation, fees, and calculations for base services etc.,
Business strategies and reputation, insurance coverage, ability to mitigate risks, processes for adjusting policies, procedures, ability to appropriately remediate customer complaints.
Terminating the relationship
In the event of the expiry of the contract, desiring to seek an alternate intermediary, breach of contract or reputational risks, the contract may be terminated efficiently.
Documenting and reporting
Proper documentation of processes, contracts, terms and conditions and reporting facilitates the accountability, monitoring and the management of risk.
Conducting independent reviews
Periodic independent reviews should be conducted. The Internal auditor of the organization or an independent party may perform the reviews and should ensure that the results are reported to the board.
Careful analyzing of important factors will always help handling the intermediaries. Therefore an organization must ensure proper administration to leave out discontinuation. If you want to know more about anti corruption compliance certificate just click this link http://ethixbase.com/anti-corruption-certification/ for more information.