In highly regulated industries, there are seemingly endless regulatory and compliance requirements and activities, and they often are inseparable from the underlying risk management activities themselves, including those for third parties.
Since the 2008 financial crisis, the U.S. has arguably become the most complex and costly jurisdiction for regulatory compliance. An article published by World Economic Forum on enterprise risk management points out that banks are “less experienced with non-traditional threats such as cyber risk, strategic risk, operational risk, regulatory risk and legal risk. Making matters trickier, these risks aren’t easily quantified.” The authors also note that “the growth in such risks is virtually unprecedented in the history of banking. This puts a premium on firms’ abilities to make connections and to recognize the complex whole is far greater than the sum of its parts.”
The financial services sector leads the pack in terms of the amount of regulation it is subject to, including the compliance challenges, regulations and laws in near and far-flung jurisdictions, as well as the cost and complexity of compliance, risk management and governance practices. This sector is not alone is the endless struggle to balance costs and compliance. Healthcare, oil and gas, and the tech sector are also struggling with the cost and complexity to managing sector-specific risks and compliance.
2020 will be a big year for many reasons: it’s not only the start of a new decade, but the upcoming presidential election will have enormous impacts on businesses and economies across the world no matter who occupies the White House. As the world’s supply chains brace for more uncertainty and try to read the presidential candidates’ tea leaves, the best thing that you can do is prepare yourself to stay ahead of the competition.
SIG University Offers New Intelligent Automation Certification
Kick off the new year with a professional certification from SIG University! Now offering four certifications, SIG University has partnered with Virtual Operations to provide advanced training on Intelligent Process Automation. Ready to take your expertise to the next level with cutting-edge training? Check out the four certification programs offered below, classes begin January 20.
2019 was an amazing year for sourcing. We witnessed greatness as the Future of Sourcing Awards showcased some of the most innovative projects, individuals and teamwork the sourcing industry has seen. The pages ofFuture of Sourcing, SIG's sourcing and procurement thought leadership publication, gave great insight into trends and best practices of the year as well. Below are the top articles of 2019 from Future of Sourcing that you don't want to miss. I hope these give you inspiration and motivation to innovate processes and implement change inside your organization in 2020.
How Digital Technology Will Transform Talent Acquisition
Today, intelligent automation and machine learning are boosting productivity and optimizing a wide range of back-office operations. How are these emerging technologies changing the way we find talent? Helen Castor gives us some insight.
Jai Chinnakonda, co-founder of a provider technology start-up, enrolled in SIG University's Certified Third Party Risk Management Professional (C3PRMP) program to learn how he can better serve his clients by gaining a more thorough understanding of third-party risk management best practices.
In the C3PRMP program, students focus on best and emerging practices to identify, assess, manage and control third-party risk throughout the lifecycle of relationships, and learn how to align risk fundamentals and frameworks with risk culture to develop the essential tools and controls for effective governance.
The digital age is seeing an increased dependence on third-party service providers of varying sizes – including start-ups – to meet the challenges of technological innovation, cost, demand for service excellence and heightened competition.
Organizations are often locked in a love-hate relationship with their vendors as they struggle to meet expectations, sometimes both ways. In today’s digital journey, no organization can thrive on its own. To create true value for your organization and help meet business objectives, your organization will need to build a lasting relationship with your third parties. Organizations will need to adopt the art and science of engagement.
The business ecosystem is experiencing a fundamental shift. Organizations are moving away from purely cost-savings partnerships to value-generating risk-sharing partnership models. As the third-party ecosystem grows, the ability to manage and govern third parties is becoming more critical to success.
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Complimentary Location Market Report
Everest Group provides SIG buy-side members with a complimentary location report on Poland. The report helps sourcing practitioners stay ahead of competition in understanding key market dynamics and the related opportunities presented by this location.
Tap into a wealth of benchmark data to identify which procurement software provider best meets your organization’s specific technology needs with Spend Matters' SolutionMap Accelerator. SIG buy-side members receive a 20% discount.
As we settle into the holidays and celebrate with family and friends, we also look to a new decade. Absent a downturn economy, it’s hard for some to understand the importance of a strong procurement and sourcing organization. But we are so much more than just a cost-savings industry. While we are seen as an overhead, we really are the engine that keeps the company on course.
Rather than looking back at all the gains our industry has achieved this year, here are my thoughts on some of the exciting trends that I believe will pick up momentum in the next year.
1. Elevating the Role of Strategic Sourcing
Without strategic sourcing, we would not be able to improve cost, quality and service levels while guarding against third-party risk. Without the strength of our negotiations, contract development, business insights and supplier relationship management, we would fail on safeguarding our supply chains against human trafficking, conflict minerals and child labor.
I’m seeing more interest in third-party risk management from boards and company executives, and in my conversations with them, it’s clear that more resources will be devoted to supporting sustainability initiatives and the ability to act on business insights.
Martin Stark delves into the idea that companies wanting to meet the "social conscience" expectations of their customers must now focus their efforts on developing the capabilities of the circular economy.
While enrolled in SIG University's Certified Supplier Management Professional (CSMP) program, Omar Khweiss was able to contribute his expertise to help his distributed team grow, face up to challenges, tackle problems, find solutions, plan work and deliver results.
The CSMP program exposes students to leading-edge training on contract administration, compliance, risk mitigation, performance, governance operating models, talent management support, transformation and more to help companies put effective governance programs in place.
During a recent visit to my company’s headquarters, I met some of my fellow senior buyers for a team project that we are embarking upon together. We all come from various regions of North America and this was our first time working together. Coincidentally, the meeting took place during my last week of SIG University’s Certified Supplier Management Professional program. I took the initiative to implement Dr. Bruce Tuckman’s group development process discussed in Module 7 to help the team dynamic evolve. As prescribed, I utilized the forming, storming, norming and performing stages from his theory to take full advantage of this prime opportunity to all share collectively in real time.
Stage 1 - Forming
We started off with the initial stage of forming. On day one, we asked our manager why we were selected to be a part of this team as well as what was expected of us. Our manager presented his vision for the team but also gave us the sense that we’d work independently since we all hold seniority within the procurement division of our company.
What’s keeping you up at night? CPOs today are under continued pressure to reduce costs and find new sources of value – and of course, manage risk.
At the same time, CPOs want to become more strategic advisors to the business. We’ve found the perfect opportunity to help you achieve those goals and more.
As a CPO, you probably manage millions of dollars’ worth of spend on services. Think of all the money your company spends on consultancies, IT services providers, marketing agencies, law firms, accounting firms, facilities management companies and more. These services providers operate across the enterprise, perform vital work and deliver enormous value.
You manage the contracts and rates for these services, but beyond that, how much attention do you pay to that spend? Do you know whether these services providers are delivering high-quality work? Do they hit deadlines? Is your business getting good value for money?
Most of us are guilty of under-managing services providers. That’s one of the key findings from a groundbreaking new research study published by SAP Fieldglass in collaboration with Oxford Economics, titled Services Procurement Insights 2019: The Big Reveal.
Growing economic uncertainty, geopolitical unrest, and emerging cyber threats mean that security and risk management are now critical boardroom priorities. If that weren’t enough, businesses today are not only accountable for the factors that impact them directly, but they’re also responsible for those that impact their suppliers.
Take the recent Quest Diagnostics data breach as an example. Despite Quest’s strong internal cybersecurity infrastructure, the sensitive information of 11.9 million patients was hacked through a third-party billing vendor with subpar security standards. The lesson is clear: a company is only as safe as its weakest vendor.
Many organizations continue to manage suppliers, contracts, and procurement processes manually or with outdated, clunky technology that is too complicated for efficient use. These haphazard systems are, unfortunately, perfect harbors for risk, but there is tremendous opportunity here. According to a recent McKinsey & Company report, 56% of source-to-pay tasks could be “fully or largely automated using currently available technologies.”
While automation isn’t a cure-all, it does have the potential to drastically decrease overall risk. How? By reducing the “human factor” in supplier management and allowing sourcing employees to focus on more critical projects. In addition to putting risk mitigation at the forefront, automating supplier-related processes benefits businesses in these four key ways:
Chris Crane, Co-Founder, Product, Scout RFP, a Workday company