The Relationship Manager is the first line of organizational defense, tasked with ownership of relationships and risks. The overall accountability of these risks, the performance and the cost management for the supplier through the life of the relationship are also key focus points.
I will discuss how the Relationship Manager (RM) functions as the nucleus of Third-Party Risk Management (TPRM) activities for a supplier with the following points.
Provides Information for Reviews and Decides on Risk Acceptance for a Third Party
It is understood that the liability of our third parties is ultimately ours. This means that the liability of the third parties of our third parties (i.e., our subcontractors) also becomes ours. An effective framework in which risk is indicated and mitigated is essential for our suppliers and subcontractors.
In such a framework, exit strategies and termination processes are set in place for cases in which the risk cannot be mitigated or when a contract needs to be terminated. These are defined by the Relationship Manager, who provides information on the supplier and finds out if there are subcontractors involved. Responses provided will trigger due diligence risk areas for information from the supplier.
Once the relationship is fully defined and risks are highlighted, it is the responsibility of the Relationship Manager to determine whether or not to accept the risk and contract with the supplier.
What is a simple definition of intelligent automation?
Canda Rozier: I think intelligent automation is a fully holistic approach for business transformation that lets companies start to analyze data, provide analytics on the data and deliver digital solutions to optimize business processes and tasks. I think one of the things that has really struck me as I've learned more about and become engaged with intelligent automation is that it's as important to understand what it's not as to understand what it is.
A lot of intelligent automation projects fail or don’t provide results – why?
Lawrence Kane: It's not a panacea, and it really needs to be implemented systemically because it's a program. It shouldn't be a one-off, because you have to look at your tools and processes and how the enterprise creates value and understand where are the places that you want to go and automate. Where are the places you want to stop doing things, where are the areas that you need to change doing something, right?
Third-party risk management in the financial industry requires careful consideration when developing an operating model. It is essential to consider the regions and regulations that govern. In most of the banking industry, your internal risk culture allows you to easily implement a third-party risk program that methodically measures inherent risk, provides time to assess third party controls and negotiates contracts that enforce controls and mitigates residual risk.
Internal vs. Third-Party
The internal risk culture changes once you enter the world of capital markets where decisions are made quickly, risk is a way of life and patience is a rare quality. Now add the risk of a trade execution platform failing during a stock market dive and counterparties not having the ability to trade for several hours. The outage would be noticed and gain publicity, potentially causing Regulators to investigate. Should this occur and the necessary due diligence steps that would have highlighted this vulnerability were skipped, the repercussions could be costly. Your firm's reputation would be at stake and you most likely will face regulatory scrutiny that could result in fines. Striking a balance between satisfying your firm's need to generate revenue and mitigate third-party risk is an interesting challenge. If your operating model is too slow and cumbersome, your business will most likely attempt to circumvent the process. Careful consideration needs to be taken when aligning your control assessments to the true inherent risk.
SIG University Certified Sourcing Professional (CSP) program graduate Diane Bradley discusses how CSP modules on vendor relations and category management improved her vendor management and negotiation skills.
I would like to start my essay by saying "thank you." BNY Mellon has invested in its employees and is providing us with this training. I feel that is something that should be recognized, and I do appreciate the opportunity to expand my knowledge, which will ultimately increase my value with the bank. With that said, the SIG University training has provided me with a lot of valuable information and has also given me guidance, which I have started applying in my day-to-day activities
I feel the units focusing on vendor relations have been extremely helpful. As I continue to negotiate more and more contracts, I have reminded myself to go into the call with my goals established and I have them written down in bullet points, so they are easy to refer to while on calls. I have also made sure to have internal calls with the stakeholders prior to reaching out to the vendor. So when the call is conducted, I am confident that we are on the same page and present a consistent and concise dialogue. I feel this preparation has given me confidence, and I strongly feel that it is represented in the call. I am also very focused on the partnership that we are building with our vendors. I realize I am an essential aspect of the partnership. My dealings with the vendor will make a significant impact on the success or failure of the relationship.
SIG University Certified Sourcing Professional (CSP) program graduate Angelica Gardner discusses how CSP modules on internal spend analysis and contract negotiation planning improved her approach to identifying cost efficiencies as a procurement buyer.
As everyone is aware, the COVID-19 pandemic has affected a large portion of the economy’s growth ability, especially in the automotive industry, with declining sales of more than 40%. Companies are having to develop strategic ways to cut costs and provide cost-saving solutions. As a buyer in the manufacturing plant, my responsibility is to identify these cost efficiencies.
To accomplish this task, SIG University's CSP program helped me recognize two areas to improve: internal spend analysis and contract negotiation planning. These areas are complementary skills that have helped me improve my approach these types of situations in the future as a procurement buyer.
INTERNAL SPEND ANALYSIS
As a new procurement agent, having followed industry market trends, company earnings and announcing changes within the organization has given me a leg up in my negotiation strategies. Assessing the environment is vital to understanding business requirements, the company’s vision and our department’s functional goals during this critical time.
In one particular situation, management did not agree with a supplier’s new budget proposal and wanted to reduce cost by an overall savings of $86,000. The lesson teaches us to gather as much data required and perform a spend analysis to determine leverage. After completing a spend analysis from the previous year, we discovered the total spend was consistent with what was done in the past.
Certified Professional Accountants (CPAs) who are looking to earn Continuing Professional Education (CPE) credits to maintain their licenses can improve their knowledge in third-party risk management by enrolling in SIG University’s Certified Third Party Risk Management Professional (C3PRMP) program.
SIG was recently approved by the National Association of State Boards of Accountancy (NASBA) on the National Registry of CPE Sponsors. CPAs and equivalent designations who enroll in the CPE-track of SIG University’s Certified Third Party Risk Management Professional (C3PRMP) program can receive 66 CPE credits and graduate with a strong knowledge base of third-party risk management best practices that can be implemented immediately.
CPAs are in possession of highly sensitive client data that cybercriminals and other bad actors could exploit. This program touches on all areas of operational risk, including cyber, business resilience, financial, technology and reputational risk. Anyone who is serious about investing in their team and protecting the wider enterprise will benefit from the program’s focus on governance and oversight best practices, controls and board reporting with a view from the top.
Outlined here is information about the upcoming changes and benefits of your C3PRMP designation, as well as a profile of our students.
What is different about SIG University’s C3PRMP program in 2020?
In January, the duration of SIG University's C3PRMP program was extended from eight weeks to 10 weeks. Multiple-choice review questions at the end of each module will test all students’ knowledge and require a minimum passing score of 80%.
Members of the Global Association of Risk Professionals (GARP) will continue to earn 20 Continuing Professional Development (CPD) credits, GARP’s highest award for a continuing professional development program.
I recently went back to read an article that I bookmarked a while back on the predictions for 2020. Forget self-driving cars and flying cars; Popular Mechanics magazine predicted in 1951 that every family in the 21st century would have at least one helicopter in their garage. They also predicted in 1957 that every road and street would be “replaced by a network of pneumatic tubes,” and your car would only need enough power to get from your home to the newest tube.
Dave Evans, the chief futurist for Cisco Visual Networking, actually predicted in 2012 that he'd be out of a job by this time because, as he forecasted, everyone would be able to predict the future themselves.
Automating Everyday Tasks
I wasn’t alive when Popular Mechanics made its predictions, but I was alive for the statement by Dave Evans. What I know for sure is that while his prediction for companies to make data-informed decisions is slowly coming to fruition, we are far off from a world without futurists. What amazes me is that most automation predictions were in the form of self-driving cars rather than taking place in everyday life.
SIG University Certified Sourcing Professional (CSP)program student Kimberly Morelli works at Driven Brands. She shares how essential components such as soft skills and change management can be and how she is implementing newly polished tools and best practices to tackle organizational challenges.
In the CSP program, students focus on the hard and soft skills of sourcing, including strategic sourcing and outsourcing methodologies, as well as best practices in negotiations.
My enrollment in the CSP Program from SIG University has proven to be timely and I am excited at the opportunity to have lessons that can be readily applied to our procurement organization. I also was heartened to find emphasis by SIG on positive supplier relationships versus an adversarial stance as used to be popular. The procurement team I am on has been in a state of transformation over the past few years, shifting from transactional buying to category management with a specific focus on increasing our sourcing processes. I found the CSP program to have laid a strong framework that is applicable to my organization, both in procurement and business areas.
SIG University Certified Intelligent Automation Professional (CIAP) Program graduate Mike Morsch has led an RPA and IA journey before. He discusses the steps a company must address to ensure a successful Intelligent Automation journey to produce the best long term and sustainable outcomes.
In the CIAP program, students gain knowledge of automation technologies, learn how to identify the correct opportunities to build, run and sustain a successful automation program, and will understand the true potential of IPA technologies when adopted correctly.
I found the CIAP certification training to be an excellent baseline for anybody looking to embark on an intelligent automation (IA) journey. Senior leaders looking to sponsor a program really need to think through how they can best start the program to ensure both leadership and associates understand the focus of the program. It is easy to get caught up in “cost savings” and getting fast and visible results to justify a program. While quick wins are always a good way to show the value of any initiative, the long term benefits available in taking a broader view will pay the most dividends on investment over time. In thinking about my own experience and the lessons learned in the CIAP program, I would suggest to anyone considering IA the following areas of focus to create the best program.