Tag: risk assessment

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How to Conduct Vendor Risk Assessment Successfully?

Risk exposure is indiscriminate. Irrespective of the size of your firm, your business may face severe fines, penalties, or regulatory red tape – especially if you fail to understand and comply with the applicable rules and regulations. This makes it indispensable for you to track your company’s risk exposure levels and conduct a comprehensive vendor risk assessment.

The best practices mentioned below will help you realize the role of vendor risk assessment in vendor vetting and ongoing monitoring processes. And will act as a vendor risk assessment checklist which you can depend on to gain a better understanding of the risk posed by each vendor relationship.

At SpendEdge, we understand that an effective vendor risk assessment requires a deal of expertise and systematic approach. And to help you ease the process, we have listed three critical steps that can minimize your risk exposure while working with vendors.

Assessing vendors can be a tumultuous task for companies. Request a free demo and know how our experts can help you improve the vendor risk assessment process for your company.

What are the Best Practices for Successful Vendor Risk Assessments?

Catalog Vendors

Although assessing vendors and maintaining ongoing records seems like an obvious task, not many companies practice this. A majority of them have a disorganized approach when it comes to hiring third parties or vendors.  In fact, some even lack the purchasing strategy that is crucial for vendor risk assessment.

On the contrary, best-in-class companies develop a catalog of all their vendors and suppliers promulgating the information about services they provide and domains they serve within the organization. To know more about the best practices for cataloging vendors, request for more information.

Gauge Inherent Risks

Develop vendor profiles during the selection process by questioning the business unit engaging with them. This will help you to analyze the importance of a vendor’s products or services to the company and provide vital insights about the information they will be handling. In addition, the vendor profile determines strategies that you need to devise to mitigate risks associated with vendors.

Categorizing vendors on the basis of the industry that you are working, facilitates vendor risk assessment. For example, companies in the healthcare sector can categorize their vendors on the basis of insurance, lab services, and a medical equipment provider.

Interested in categorizing vendors based on the risk they can pose for the organization?

Request a free proposal and access our complete portfolio of vendor risk assessment solutions.

Conduct On-site Audits

Each relationship should be risk rated depending on the vendor’s practices. This may require you to conduct an on-site audit since it can provide an in-depth evaluation of vendors’ activities. On-site audit depends on the parameters of the vendor risk assessment process.

Sites can provide a great deal of information to you but meeting the client-facing staff can help you flesh out potential risk issues. Moreover, it can provide you a better understanding of the organization and the security measures.

Wondering how a vendor risk assessment process can help you identify and mitigate risks? Get in touch with our experts today!


4 Ts of a Risk Management Strategy

A risk management strategy is designed to help businesses develop a structured and coherent approach to identify, assess, and manage risks. It can be developed and implemented by projects and organizations irrespective of their scale of operations. Considering that risk is a prevalent element in a supply chain, it is imperative for modern organizations to chart out appropriate strategies to resist or mitigate such occurrences. to Prudent supply chain professionals must be equipped with the right risk management strategy in order to avoid supply chain complexities. The skill required to build an ideal risk management strategy is not developed overnight: it is gradually learned through exposure to different circumstances and issues. In this blog, SpendEdge’s industry experts have curated ‘4Ts’ of choosing an effective risk management strategy for business:

Treat the risk

Several complacencies and negative issue related to the supply chain can leave a company more exposed to threats. Though an effective risk management strategy can reduce such risks to an acceptable level by building control mechanisms into relationships or operational activities. However, it is critical that the risk management strategy adopted is proportionate to the risk and are cost effective. Having a service level agreement is a great mechanism to ensure that the supplier’s performance is kept in check. Furthermore, this can also help identify areas that require corrective measures.request proposal

Transfer the risk

All the risk that a company may encounter cannot always be mitigated completely. But is possible to transfer some risk to another body or organization through insurance, contractual arrangements, outsourcing or partnerships. The catch here is that some risks such as the risk to reputation cannot be transferred.

Tolerate the risk

As mentioned earlier, risks cannot be fully mitigated. Eventually, all risks have to be accepted as they form part of, or are inherent in, the activity under scrutiny. In the case of such instances, it is vital for organizations to tread carefully. There are some risks which for which the management has no control over and some for which any management actions would be prohibitive in terms of resources. While formulating a risk management strategy, these risks must be identified, clearly understood and acknowledged, and a contingency plan established for dealing with the effects that will arise if the risk is realized.

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Terminate the risk

In some rare cases, it is possible that a particular risk can neither be controlled nor be transferred to another entity. In this case, the only way out is to eliminate the risk by putting an end to all or part of a particular activity. The management must be highly cautious while formulating their risk management strategy here. Though an identified risk may be too much to absorb, companies must not stifle innovation.

Gain more insights on building an ideal risk management strategy for your business

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5 Key Steps to Workplace Risk Assessment That You Must Follow

A risk assessment process plays a very important role iContact USn protecting your business and your employees, as well as complying with the law. The risk assessment process helps you focus on the risks that have the potential to cause real harm. There are many instances in which straightforward measures can help control risks such as ensuring the cleaning of spillages so that people do not slip or drawers of the cupboards are kept closed to ensure people do not trip. Risk assessment tools can help ensure the proper assessment of risks at a workplace by adopting cheap and effective measures to ensure your workforce, which is your asset, is protected. We at SpendEdge, with the help of our experts, have devised five important steps to risk assessment that you must follow.

Answers to the questions

Five Steps to Get Risk Assessment on Track

risk assessmentWhat is risk assessment? 

Risk assessment refers to a systematic process that involves a series of steps for evaluating the potential risks that could affect a business’s operations. A well-defined risk assessment process helps in identifying hazards that could have a negative impact on an organization’s ability to conduct business. Furthermore, it also provides measures, processes, and controls to reduce the impact of these risks to business operations.          Contact US

Key steps in risk assessment

Undertaking a risk assessment process can allow an organization to obtain a holistic view of the risks it faces, consequently allowing the management to identify these risks and capitalize on opportunities. Furthermore, risk assessment allows management to assess the company’s risks and controls and devote resources where needed. Here are the key steps in the risk assessment process:

Identify the risk

Risks affect a company’s ability to successfully compete within the industry, survive in the market, and maintain its financial strength and goodwill and also the overall quality of its products, services, and people. The first step enterprises must do is identify all the potential risks that could affect the smooth functioning of their business.

Create a risk library

A risk library acts as a framework for the risk assessment process. It is a repository that summarizes those risks to which the company is exposed. This facilitates discussions of risks and their definitions, and it promotes both consistency and a culture of risk awareness. A risk library can be broken down into four categories- insurance risk, market risk, operational risk, and strategic risk.

Assess risk potential and impactrequest proposal

Assessing the likelihood of risk and the consequent financial impact and can help the management in determining whether the company is operating within its stated risk appetite and should accept, reject or reduce risk. The evaluation of each risk can be on either be quantitative or qualitative depending on the availability of information or the confidence in the approach.

Formulate and implement risk mitigation strategies

It is a good practice for companies to identify the risk owners in their organization. Risk owners are the most appropriate people to monitor and manage the risks. They are also responsible for assessing risks and identifying associated controls. In order to effectively mitigate risk, organizations must work with risk owners and identify current controls that are in place to mitigate and/or reduce risk.

Review and update the strategies

The market conditions can be highly dynamic, which makes it important for businesses to undertake risk assessment at fixed intervals, review their strategies with respect to the present conditions, and make the necessary changes in strategies. This step is also aimed at keeping track of the adherence to the strategies that were formulated earlier.

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