Regardless of industry, with increasing complexity of meeting regulatory and policy compliances in a multi-vendor environment, an opportunity exists for VMO/Supplier governance teams to grab. They can step toward strategic role by aiding the management of risk and compliance aspect of outsourcing deals. It does make sense because,
- Vendor management in matured organization is a team which works across functions; So, they should be assisting corporate compliance team in manging compliance deliverable applicable to their vendors
- Vendor management team is not only responsible for service delivery but end to end vendor relationship; Adherence to regulatory and policy compliance is integral part of most contact and hence vendor management team should be playing active role in ensuring compliance from vendors in their scope.
- Vendor management team has a cross functional view of the contract making them the first choice to assess any risk in the outsourcing deals. This makes them ideal candidate to share responsibility of mitigating risk and ensure compliance.
- Increasing trend in automation of VMO activities and available managed services option can help VMO to move from tactical activities of data collection, monitoring and oversight to strategic role of standardization, vendor portfolio management, minimizing outsourcing risk etc.
This does not happen in most of the organization because the charter for VMO has traditionally being to manage service level/ KPI, and control the spend. What will it take to make a successful transition of VMO from tactical to strategic role,
- Organizations should clearly define the policy and regulatory compliance parameter and carve out a role to be played by VMO team to assist in managing risk and compliance.
- VMO team is typically staffed with personnel from delivery organization; the corporate team needs to sensitize VMO folks on risk and compliance deliverables. Few training will help VMO deliver better results.
- Organizations should also look at options to engage the VMO team during pre-contracting stage to make VMO team aware about intent of compliance and risk obligations given in the contract.
- Use technology to create bandwidth within existing team to assist in risk and compliance matters.