The public health crisis presented by the coronavirus is an unfortunate and very real test of governments and community organizations around the world. Global enterprises with complex provider ecosystems also are being tested by the spread of the virus. Companies are urgently asking themselves how resilient their third-party suppliers are in a state of crisis.
The following steps will help you build resiliency in your supplier ecosystem.
- Know who your critical suppliers are. You may have thousands of suppliers, each with a different degree of potential impact to your business continuity. Your response in a time of uncertainty relies on knowing these degrees of impact to your business and tiering suppliers accordingly. You must quickly analyze delivery locations and be able to connect with the right supplier contacts. Look again at your tiered suppliers today and make sure the critical ones are noted as such. Suppliers that you once rated as less critical in the past may rise to the top of the list in light of the pandemic. Make these calculations so you can act in an informed way.
- Proactively monitor and be aware. Sign up for daily alerts about what is happening across your suppliers and any risks in locations where you or your suppliers execute delivery. Whether it is virus outbreaks in China, fires in California or political unrest in India, early warning enables you to proactively mitigate risks to delivery. Enterprises need to stay up to date on operational, compliance and legal events related to their suppliers and the macroeconomic, geo-political, infrastructure and people-related changes at their delivery locations.
- Assess supplier business continuity plans today. Business continuity is an organization’s ability to deliver products and services at acceptable predefined levels following a disruptive incident and is the essential plan for minimizing operational, financial and regulatory impacts. Safeguarding business continuity happens across the engagement lifecycle, from transition to steady state, at the onset of an event and post event. Business continuity plans should include sub clauses to ensure a robust contingency mechanism. Deliverables and obligations tracking provides easy access to supplier business continuity plans (BCP) plans for validation.
- Validate ongoing supplier compliance. Ask your suppliers to immediately provide evidence that they are adhering to their business continuity actions. It is imperative to trust your third parties, but with so many suppliers in your environment – and with potential business impact so high – verification is your fiduciary responsibility.
- Rapidly institute change based on your learnings. Get on your critical suppliers’ calendar immediately to identify with them any necessary policy or procedural changes. Policies and procedures often are instantiated in your contracts, so conduct a quick analysis of whether they are in writing, and formally update expectations to support the sustainability of these changes.
- Monitor service delivery performance. Regardless of whether continuity plans have been invoked, service delivery performance should remain constant. There may be appropriate cause for exceptions to service level performance, but delivery continuity may be more imperative than ever. Consider review of the contract terms with your legal department and the provider to understand which terms may be applicable in the case of a global pandemic.
- Reflect and improve the resiliency of your third-party ecosystem. Working with a complex global supply chain can introduce significant risk to your business continuity. Evaluate challenges and incorporate changes to policies and procedures, update and harmonize your contracts as needed now, take steps to quickly modernize your technology, and improve your ability to work collaboratively with suppliers.
When it comes to your provider portfolio, time is of the essence. Managing the complexity can be overwhelming. The latest updates to the ISG GovernX third-party management platform can help you mitigate the immediate risk of the coronavirus pandemic and build resiliency in your third-party relationships for the long term.
About the author
Lois Coatney
What she does at ISG
Lois Coatney has been the ideal guiding advocate for her Fortune 500 clients, whom she has consistently helped get the most value out of their service providers and supply bases. That’s because, for more than two decades, Lois was the service provider. Today, as ISG’s President of Americas Sales, she is central to driving the firm’s revenue and growth.
Past achievements for clients
Throughout her career, Lois has consulted clients on their operating models and organizational designs so that they can work most effectively internally. She’s pivoted that experience to her approach to her current role, which goes much further than looking at the numbers and bottom line. She examines what ISG’s strengths are and considers how the firm can put its best foot forward to sell its services. Pairing that with a deep understanding of clients’ needs and of ISG’s function in the market, Lois makes decisions on how the firm can enhance those same offerings. She also views her work as a worthwhile means to strengthen ISG’s client relationships, which she contributes to by mentoring ISG account executives.
Lois’s expertise in contracting, experience in supplier management and willingness to travel across the globe to create something new and modern have enabled her to:
Lois Coatney has been the ideal guiding advocate for her Fortune 500 clients, whom she has consistently helped get the most value out of their service providers and supply bases. That’s because, for more than two decades, Lois was the service provider. Today, as ISG’s President of Americas Sales, she is central to driving the firm’s revenue and growth.
Past achievements for clients
Throughout her career, Lois has consulted clients on their operating models and organizational designs so that they can work most effectively internally. She’s pivoted that experience to her approach to her current role, which goes much further than looking at the numbers and bottom line. She examines what ISG’s strengths are and considers how the firm can put its best foot forward to sell its services. Pairing that with a deep understanding of clients’ needs and of ISG’s function in the market, Lois makes decisions on how the firm can enhance those same offerings. She also views her work as a worthwhile means to strengthen ISG’s client relationships, which she contributes to by mentoring ISG account executives.
Lois’s expertise in contracting, experience in supplier management and willingness to travel across the globe to create something new and modern have enabled her to:
- Lead and roll out ISG GovernX®, a tool that directly helps clients and their businesses manage third-party risk, solve governance and service integration challenges, and drive optimal performance of their sources.
- Help a large governmental client migrate their $2.2 Billion annual IT spend to a consumption-based procurement model.
