Enhance Third-Party Due Diligence

When an organization connects with a third-party, performance evaluation is must to ensure about its compliance with various internal and regulatory requirements. Staying competitive demands an organization to not only expand their third-party network but also validate the sustainability of the network. Conducting business with a high-risk or non-compliant third-party can tarnish the image of the organization and put into various problems like penalties and heavy fines.

An organization is hugely benefited with outsourcing but also face the challenges to manage the vast networking of third-parties. Performance management and compliance monitoring are must to follow. Below are some insights on strengthening third-party due diligence.

Centralize and Assimilate Third-Party Information
Large third-party network often leads to mismanagement of important information. Data loss chance can be bigger because of lack of visibility. Many organizations fail to learn that other businesses are working with the same third-party. So, it is highly necessary to have a consolidated third-party information system. Collect all important details like financial status, association, business details, contracts, certifications, roles and responsibilities, background checks etc… Centralizing the information improves the accessibility.

Onboard & Screening the Business Relationship
Every organization should conduct screening of their partner before entering into a contract. It minimizes risks associated with such association. The screening process should be well-defined to get the input of criticality. The screening helps to know business continuity, dependency, finance and legal related issues if any. Under due-diligence, it is must to monitor the risk-based segmentation.

Validate from External Sources
Thorough due-diligence is considered when assessment is made not only internally but also externally. Organizations can validate their third-party by checking the credit ratings, adverse media and sanction lists. This is called complete assessment.

Taking Help of Technology
Effective due-diligence needs an in-depth understanding. Organizations can maintain a transparent relationship which can be evaluated easily with the help of technology. A robust technology will automate transparent relationship and help to get quick intelligence.

Organizations now can conduct third-party due diligence by taking help from professional company security service providers. These agencies are expert in conducting due diligence on several aspects. Though, HR teams of all organizations are responsible to conduct basic due diligence by using an executive making a few phone calls. For detailed and comprehensive inquiry by maintaining complete secrecy, it is must to hire a professional due diligence service provider. The information they collected is accurate most of the time.