Growing businesses often experience the management of increased third-party
compliance risk as a daunting, complex and costly undertaking, but I don’t believe it has to be that way. Solutions exist that go a long way towards matching the systems Fortune 500 companies have in place, without exorbitant spending. I recently contributed an article to CEP Magazine that outlines how to recognize when it’s time to upgrade your strategy and where to begin. In part:
“In the earlier part of their growth story, most companies essentially wing it when it comes to managing the compliance risks inherent in their third-party vendors and agents. Their compliance processes tend to be inconsistent and diffuse, lacking tools that give their leadership true visibility into the landscape of risks faced by the company.
And that can work just fine … until it doesn’t. When a company’s revenue grows past about $50 million, the increasing complexity of its third-party universe starts to make that sort of ad-hoc system unsustainable. It’s this critical mid-market period that is the most challenging for companies. Those with revenue above $1 billion mostly have systematic compliance solutions in place, while the third-party ecosystems of companies under $50 million generally haven’t reached the critical size or complexity.
A common knee-jerk reaction is to write a fat check to a law firm that offers consultancy services on managing compliance risk. But the truth is that getting a handle on your third parties doesn’t have to be as difficult or expensive as most businesses assume. It can be handled in a way that won’t interrupt operations and will allow you to sleep at night without worrying about breaking the budget.”
READ THE FULL ARTICLE – Knowing when your firm should take action against third-party risk.