3. Risk Management

The five risks that accompany vendor relationships involve finance, operations, strategy, compliance and geography. To manage that effectively, a company must determine who owns each of the five risks, and then assign an internal “owner” to gather the necessary information regarding risk and manage it.

Due diligence is also part of risk management, which is why Weinstein also suggested that midsize enterprises check solution providers’ authorizations and certifications ahead of time. He also suggested that companies source as much spending as possible from one provider, and ensure that a contract clearly spells out the various aspects of a relationship, including account and performance management for both sides.