Involving Procurement White Paper
Building Best Practices Involving Procurement.
Business lines within a given organization share many common service needs and risk profile concerns. Tangible gains in risk posture and third party risk management (TPRM) efficiency can be achieved over the long-term by applying a standardized governance model that uses proven tools and centers around Procurement from the outset of a third party relationship. Not only does Procurement bring a body of knowledge to the table that can be leveraged; adding Procurement to the process from the outset allows stakeholders enterprise-wide to collectively establish a standard internal framework for handling third parties. An integrated approach consolidates third party onboarding processes, naturally resulting in better risk management controls, as risk ranking and negotiations take place in a consistent manner that aims to achieve common goals. This allows every department to remain advised of goals and objectives, so that they can each contribute the necessary elements to ensure that requests for proposal (RFPs) and contract negotiations include elements of good risk management hygiene throughout the process. This white paper provides guidance on building such a framework. Recommendations include:
- Business units should partner with Procurement to achieve economies of scale and risk mitigation.
- Adopting methodologies that align with industry best practices, as well as regulatory requirements, allows for the most effective evaluation of a given third party’s controls.
- To ensure the process is practical, sustainable and defendable, four guiding principles apply to developing a holistic framework of standards for vetting and onboarding third parties: consistency, objectivity, balance and management oversight.
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