Automating Vendor Compliances
Vendor Management process can not only be expensive (both in terms of resources and cost) but also expose the entire organization to unprecedented levels of risks, if left unchecked. According to a study by The Hackett Group, “It costs roughly $700-$1,400 in internal costs (i.e., labor, outsourcing, technology and related overhead) to source each supplier, set it up in internal systems, transact with it and manage the relationship on an ongoing basis. Even beyond money, dealing with paperwork manually, fixing errors and discrepancies, and communicating with suppliers over inquiries costs companies about 6500 hours a year.” Each supplier added to the supply chain can result in numerous compliance risks. Are they utilizing corrupt practices somewhere down the line like forced labor, poor work conditions, or even human trafficking? Without an efficient process in place alongside the skill and man-hours to verify each of your suppliers compliance standards as well as consistent checks to ensure their standards are regularly updated and maintained, businesses run the risk of severe ethical and reputational harm to the business.
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Challenge
A large Real Estate Development company spends countless hours going through multiple processes and steps to onboard hundreds of vendors every year. The business challenge is significant with various development projects (malls, commercial and residential buildings and clusters) going on simultaneously and each project with multiple global vendors onboarded too. The operations team has to go through all the vendor provided documents and evidence, which then have to be verified against the compliance register. Manually flipping through the pages in each of these sources is not only time consuming but also error prone. With each of the manual steps in the entire process, onboarding a vendor based on compliance checks is a daunting activity for the client. As a result, the organization experiences significant delays in the vendor onboarding process leaving aside the reporting and gap analysis, which further creates a never ending cycle of follow ups and communication involving procurement, legal, vendor team etc.
Solution
The solution to automate the process was built combining multiple modules from the SageX platform. By adopting the combination of both Automation & AI based methodologies to process, consume, train and fine-tune a responsive digital assistance process, the solution empowered the client to manage the entire vendor compliance and reporting process seamlessly where:
- Required data was automatically extracted from different policies, process documentations and other evidences
- Workflow automation enabled the verification of compliance adherences together with audit references from the source data
- Automated vendor scorecard activated the process downstream with gaps identified and addressed
AI presented the client with opportunities to recalibrate how they search and consume this information within their own business - allowing them to manage the information flow within their organization with a high degree of effectiveness to create a greater value. We @ SageX gave that control to the business to build a true “data culture” which enabled them to meet both their objectives - complying with the regulations and building more efficient vendor risk management practices.
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