Question

Discuss how leveraging outside vendors on projects can assist in risk management.

Answer 1

Leveraging the outside or external vendors will assist in the risk management of projects in the following ways.

Access to Expertise and Resources

The startups and even the established organizations may not have resources and expertise towards solving all kinds of risks. Vendors and consultants are more specialized in this regard and their engagement and leveraging will be devoid of credibility challenges. Resources may be especially important as timelines will have to be shortened, and an absence of internal resources for risk management will impact the speed-to-market adversely. Vendors also have a broad perspective and would have handled the complexities while working with similar organizations before.

Organizational Culture

Because of the cost-effectiveness required to operate in modern business scenarios, no organization wants to invest in human capital, resources, finances, and time without proper evaluation. Many of the organization nowadays focus only on their core areas while other functions are outsourced. When the organizational culture supports outsourcing, external vendor involvement, and leveraging can be a viable and fruitful option that matches well with the established culture. Third-parties handling sensitive data have expertise in exposing non-compliance, breach, reputational damage, and financial penalties among other kinds of risks. When outsourcing is a long-term approach, the costs related to assessment and duplication are also lowered.

Umbrella Goals

Leveraging the outside vendors like the consultants ensures that specific problems are worked upon. The consultant gets to work on an unambiguous umbrella goal, and the progress for reducing risk outcomes and removing the problem can be better measured, tracked, and celebrated.

Creating Multiple Empowered Contacts And Reducing Of Lags And Delays

It is easier and convenient to have the other empowered contacts for the external and outside vendors so that communication does not turn to be a bottleneck. Outside vendors can also be connected to other people of the project team and business organization to ensure that progress is monitored and risks identified are work upon without any lags and delays. In this case, there will be a reduced need to engage the project manager for all the discussions and other empowered contacts and employees will also be able to do the needful thereby reducing the burden.

More Perspectives for Broadening the Dialogue

All initiatives towards risk management will be more potent and the issues will be solved with a greater probability of success when multiple outside perspectives are called for.

A scalable and centralized process and program createfd or creating and managing vendor risk maybe one of the most important and fruitful thing that businesses can do to grow fast and in an secure manner. The well-devised and well implemented risk assessment plans involving external vendors provide more information on the due diligence activities. It will also involve all the ongoing risk mitigation and management activities, which might be overlooked in other circumstances.