It is important to do business with the right vendors if you want you want to stay on the right side of the law while ensuring that the business’ needs are met.
With hundreds of suppliers offering relevant products and services, the vendor selection process can appear strenuous and time consuming. However, if done the correct way and in line with the business’ best interests, the supplier selection process can be achieved with ease and peace of mind. Rudi Kruger, GM LexisNexis Risk Solutions, which offers screening solution ProcureCheck, says that vendor selection can be successful by having a handle on the following.
* Business requirement – The vendor selection team must have a clear idea of what it is the business needs from the prospective supplier. This can be determined by analysing the company’s needs versus wants and conducting an evaluation of what needs improvement and how the particular new service or product will serve the company’s best interest. “Once this is determined, the product or service should be clearly defined on paper so that everyone involved, including prospective suppliers, is completely aware of your requirements,” says Kruger. “It is also important to determine what requirements a vendor has to meet before they are asked to submit proposals.”
* Marketplace evaluation – Research the quality of available suppliers and then determine which of these you want to approach with proposal requests. “It’s a waste of time to request a proposal from a supplier who does not fit the bill but this can only be determined upon closer inspection. Ideally, you should shortlist a maximum of five suppliers to request proposals from,” says Kruger.
* Proposal request – Once the business requirements are determined and an evaluation of the supplier marketplace is complete, the next step is to request proposals from suitable vendors. Ensure that the proposal request contains a clear structure with points so that the vendor is able to provide relevant and accurate responses. “Compile a template with questions which can be sent to all vendors so that responses are in a unified structure and can be referenced with ease when comparing vendors during the evaluation process,” Kruger advises. “Remember to allocate adequate time for the vendors to respond and clearly indicate your deadline for responses.”
* Evaluations – Compile an evaluation scorecard against the requirements you set out. “Once responses have been received, the scorecard will enable you to measure the vendors based on their results against your criteria as well as vendors against each other,” said Kruger. “This step is also the perfect opportunity to screen the suppliers. Screening them will enable you to determine potential conflict of interest scenarios, hidden or undisclosed risk factors or other opportunities for possible fraudulent activities.” While background screening can take a lot of time and efforts, tools like ProcureCheck is available to assist with screening at the click of a finger. The online solution also enables users to determine the associated risks such as business status, director status and directors linked to public entities, which is significant information to have before a vendor is selected.
* Vendor selection – The results from the evaluation and company screening will essentially provide all the information you need to make an informed decision. In deciding, consider the vendor’s reliability to deliver, quality of service or product and willingness to be flexible.
* Ongoing monitoring – “Once-off evaluation and screening is not a sure-fire way to protect your business from unscrupulous activities. Vendors, as well as employees should be monitored on an ongoing basis,” says Kruger. ProcureCheck helps with this. The solution is an intelligent and intuitive workflow solution that understands, identifies and prevents conflicts of interest. When entrenched in the day-to-day operations of your organisation, LexisNexis ProcureCheck will work to analyse both your vendors and employees and their relationships with each other, safeguarding your business against fraud.
Key features of ProcureCheck include:
* Provides automated irregularity alert reports;
* Provides vendor and staff reports (useful for King III committees);
* Build and manage your own internal non-preferred list of vendors and employees;
* Allows clients to import vendor and staff lists;
* Vendor vetting (on an adhoc or batch basis);
* Detailed conflict of interest report;
* Identify conflicts of interest through powerful cross-referencing of information; and
* Visual representation of data, gives you the ability to see the bigger picture.