Conventional wisdom says that supplier risk management teams are under-staffed and overworked. As companies track more data to meet stricter compliance regimes, the volume and complexity of supplier risk assessment work grows, and with it, the need for analysts.
But is the lack of analysts really the problem, or is outdated risk assessment process holding your team back?
Why Supplier Risk Assessments Are Inefficient
Too much manual work
A lot of tedious, low-level work goes into the risk assessment process before the analyst gets to use their expertise. A supplier risk assessment can pull from dozens of data sources, requiring manual aggregation. The effort may be hampered by further data siloing, inconsistent records, or human error in data entry and standardization. In practice, tracking down, aggregating, and double-checking all the data can take weeks.
Reporting on data is another pain point in the third-party risk management (TPRM) process. The analyst must manually review the data, pull out the most salient factors, and create an executive report that’s simple and high-level enough for stakeholders to digest, but deep enough to cover all relevant information. Only then can they actually analyze the data and make decisions about the supplier.
Lack of repeatability
Manual vendor risk assessments are very difficult to standardize. Different analysts may select, format, and compile information differently. That divergence only increases with the reporting process, as each analyst emphasizes different data based on their priorities and process.
Even if every analyst is doing top-notch work, this can cause issues. Without a repeatable process, it’s harder to compare vendors head-to-head, or consistently track the same vendor over time. This makes it harder to defend your supplier risk management decisions in audits and contract reviews. It also limits the usefulness of your reports over time, since you can’t reliably compare vendors, or reports on the same vendor over time.
Manual risk assessment doesn’t scale
Regulatory burdens, cybersecurity risks, and other risk categories are growing quickly, as is your supplier roster. And the manual approach just doesn’t scale. When you were dealing with a dozen suppliers or so, a handful of data sources, and some very simple regulatory requirements, it didn’t matter that much that your manual risk assessment process was inefficient; the total volume was low, there was not too much data to wrap your head around, and at most you had a few critical suppliers to keep a close eye on.
But as the numbers balloon, the difficulty and time commitment of reporting increases geometrically. Minor inefficiencies in collecting data and drafting reports become major obstacles to supplier risk management. And adding a few more analysts won’t solve the problem.
How to Scale Supplier Risk Management
The core problem isn’t a headcount problem, but a data problem. AI-powered, automated risk assessment frees your team from the low-level data aggregation work that consumes most of their time, empowering them to do much more of the work they’re best at: risk analysis, strategic decision-making, and mitigation.
Data aggregation and identity resolution
With a supplier intelligence platform like Craft, your analysts can skip the tedious work of stitching together vendor identities, dependencies, and FOCI risk. Our data fabric draws from hundreds of sources, providing a complete view of each supplier or prospective vendor virtually instantly.
Validated, standardized intelligence ready for decision-making
Craft’s AI-powered risk analysis provides complete risk reports with a single click. Reports cover all major risk categories, with an executive summary and section summaries to convey the most important information effortlessly. That lets your risk analysis team make decisions quickly, and makes it easy to get all stakeholders on the same page.
The standardized reporting format also simplifies supplier reviews, empowering you to directly compare current and previous performance. That means consistent reviews every time, across your whole data analysis team.
Contact Craft to see how much more your data analysts can do without the busy work.