Due Diligence and Ongoing Monitoring

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  • 1.  Performance Metrics for Vendor Financial Stability

    This message was posted by a user wishing to remain anonymous
    Posted 04-28-2023 06:57 AM
    This message was posted by a user wishing to remain anonymous

    Hi,

    Could you kindly suggest some Vendor Financial Stability Metrics for Private Companies ? and proposed frequency for that metric ? 

    We are trying to established metrics that would trigger at the threat of vendor Insolvency.

    All suggestions welcome. 
    Thanks




  • 2.  RE: Performance Metrics for Vendor Financial Stability

    Posted 05-01-2023 06:03 AM
    Our initial inherent risk question to determine if a vendor is high, moderate, or low risk in the financial risk area are:
    Related to a financial risk, which of these statements below apply to this vendor?
    a. This is a commodity vendor = low risk, no further questions needed
    b. This it not a publicly traded company = moderate risk
    c. This vendor's annual revenue is less than $100M = moderate risk
    d. This vendor has been in business less than 5 years = high risk
    e. 25% or more of this vendor's business is with us = high risk
    If a vendor scores high risk or moderate risk in this risk area (along with 9 others), then we would gather and review due diligence documents, etc. to determine if the residual risk and our risk response.
    Thank you,
    Christi Osburn
    Christi Osburn
    Vendor Management Program Manager




    Original Message


  • 3.  RE: Performance Metrics for Vendor Financial Stability

    Posted 05-01-2023 11:17 AM

    Thank you for sharing the information.  Has the vendor viability risk considerations been challenged by any regulatory body? Are you considering any changes based on feedback and or improvement efforts to the risk and appropriateness of due diligence for financials?  One last question, do you have a financial risk domain SME who vets all things financial?


    Original Message


  • 4.  RE: Performance Metrics for Vendor Financial Stability

    This message was posted by a user wishing to remain anonymous
    Posted 05-02-2023 07:07 AM
    This message was posted by a user wishing to remain anonymous

    Christi, that is excellent information. I had not considered rating the vendor for financial risk in the first instance, before worrying about the following up monitoring requirements/ frequency. At least this approach should make my target pool a bit smaller / more focused.  Thank you 


    Original Message