Leading global sourcing advisory and benchmarking firm, Alsbridge, Inc., today released a new Report on “Federal Reserve Board Tsunami – Vendor Management Risk Mitigation,” outlining the potential risks posed by financial institutions on the U.S. and global economies. Furthermore, the report advises on how all parties must position themselves to respond to a Federal Reserve Board Discovery Review.
The observations and recommendations shared by Alsbridge Inc., in this report are focused on preparing the reader to fully appreciate the risks involved in forming a multi-sourcing strategy, the Federal Reserve Board’s likely direction in conducting initial Discovery Reviews and how to prepare for and perform well in a Discovery Review.
One of the cornerstones of the Dodd-Frank Act is its requirement that financial institutions identify and mitigate “systemic risk”—the risk that results from the interconnectedness of major financial institutions with multiple sourcing providers. Therefore financial institutions are under the obligation to ensure they have deployed vendor management practices designed to support effective risk management in a multi-sourcing strategy and to optimize service outcomes.
Vendor Management is the set of processes, tools, policies, and organization structures affecting the way a sourcing relationship is directed, administered or controlled. The developments in recent years have highlighted the need for a vendor management operating framework that fully addresses the four pillars of vendor management:
- Relationship Management,
- Performance Management,
- Financial Management, and
- Contract Management.
These four pillars are broken into sixteen operating dimension that provide a framework for comparing your vendor management practices against those factors the Federal Reserve Board will likely be reviewing as part of a Discovery Review.
Having the proper structure, tools, processes and skill and competent resources in place not only reduces operational risk, but can produce significant financial returns on a multi-sourcing strategy.
The concepts discussed in this paper, if applied, can bring to your organization, the confidence that it is aligned with recognized industry best practices and is well prepared to face a Federal Reserve Board Discovery Review.
You can read the complete report Federal Reserve Board Tsunami – Vendor Management Risk Mitigation
About Alsbridge Inc.
Alsbridge provides world class sourcing advisory and benchmarking services for the CIO, CFO and CPO. We’ve helped hundreds of companies reduce costs and get more value from their vendors. Our experienced consultants leverage proprietary tools and information databases to identify and engage the optimal vendors for your situation, negotiate best practice terms at fair market prices, and improve the way you work with your vendors. Alsbridge clients utilize the most cost effective and value added sources globally for IT infrastructure services, hardware and maintenance, network services, software and maintenance, application support and development, business processes and cloud services. Alsbridge was ranked the #1 outsourcing advisor in the world by the International Association of Outsourcing Professionals (IAOP) based on the value delivered to clients. This commitment to delivering value to our clients has made Alsbridge a distinguished member of the 2010 Inc. 500 fastest growing privately held companies in America.