GOSHEN, Ind. — Vendor management is moving out of homegrown spreadsheets and into an intranet-based compliance solution at Interra CU here, easing due diligence, file sharing and knowledge retention.
With the credit crisis, and the NCUA focusing greater attention on vendor management at credit unions, a manual approach to tracking vendors is a "somewhat inefficient model," said Rex Hochstedler, CFO at the $484-million CU.
One employee at Interra - the compliance officer - currently oversees vendor contracts, including renewal dates, contact information and documents, such as SAS 70 audit reports, said Hochstedler. "It's really up to one person to keep an eye on all of our vendors" - 250 and growing.
The officer stores all the contacts and renewal dates in Microsoft Excel spreadsheets on a local computer. An employee from each relevant business unit keeps track in a separate copy. Associated hard-copy documents are shelved in the compliance office and with the relevant business unit. Thus, vendor data and documents are sectioned off across the CU and are not easily accessible to other employees who may need them.
"And when you have staff turnover, you've got to make sure the vendor information passes to the next person," Hochstedler continued. "Sometimes that doesn't happen."
True, Interra could put the Excel spreadsheet on the corporate portal in order to more easily share data, but assigning access to certain parts of the spreadsheet based on permissions would have been impossible, he said.
This fall, Interra will keep track of vendors using the new Vendor Management application from West Lafayette, Ind.-based Passageways, which provides corporate portals to 175 CUs. Vendor Management is a centralized, searchable database that is organized in an "intuitive" fashion, said Hochstedler.
"One of the big advantages of Vendor Management is that it will give any individual throughout the CU access to certain aspects of vendor data," based on permissions, Hochstedler said.
Due diligence for requests for proposal and annual reviews will be easier, he said. Vendor Management provides a due diligence checklist, and the CU can also make notes for follow-up within the application. "If you leave any due diligence item open, the application shows you a warning. It's a nice tickler system."
Vendor documents will be close at hand, as well. Interra can scan all related vendor documents and upload them in encrypted format to the Vendor Management application, where the staff can view them.
Advance alerts on contract renewal dates are automatically e-mailed to the employee responsible for the respective vendor. Specific contractual obligations, such as the need to give 30-day notice on terminations, are included.
Mission-critical vendors, such as core processing or cash supply, can receive higher priority in the system, thanks to a risk categorization feature. "Assigning a risk category will fine-tune how we're monitoring our vendors and will be very helpful in showing regulators how we're tracking higher-risk vendors," explained Hochstedler.
Although Interra seriously considered two other vendor management platforms, the Passageways offering presented the best solution, in part because Vendor Management has the same look and feel as the CU's Passageways portal, he added.
"Vendor Management will sit on our Passageways portal and be accessible through the portal, said Hochstedler. "All staff are comfortable with the portal, and the 25 users of Vendor Management will be automatically signed into Vendor Management when they sign onto the portal."
Ten credit unions are using Vendor Management, which can also be deployed as a stand-alone module, according to Passageways.
