Despite investments by financial services firms in supplier selection and implementation, a survey has revealed a lack of commitment to ongoing management and oversight.
According to the Supplier Optimisation Survey conducted by Knadel Solutions, despite increasing regulatory scrutiny, 27% of respondents fully agreed that all key supplier risks are identified, escalated and mitigated. Furthermore, over half of the surveyed firms lack essential tools or software for effective supplier oversight, while only 30% have comprehensive visibility of supplier costs.
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Amid economic challenges, regulatory pressures and heightened client expectations, supplier managers face heightened scrutiny to ensure providers deliver top-tier performance while maintaining cost efficiencies. However, according to the researchers, many lack the necessary tools and resources to effectively manage suppliers, jeopardising the expectations set on contract signing day.
Robert Hupe, practice head at Knadel Solutions, commented: “Financial services firms invest significant sums in selecting the supplier solutions they believe will enable their ambitions. However, without a robust supplier governance operating model, this
investment is unlikely to achieve its anticipated returns”.
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Paul Miller, Knadel Solutions chairman, added: “The visible and invisible level of spend with suppliers is rising rapidly and outstripping the internal cost of operations. Third parties are pivotal in the operating models of these firms, and failing to manage them properly not only creates risk but inhibits a firm’s ability to achieve its strategy.”
Organisations acknowledge suppliers’ crucial role in fostering growth, cutting costs and managing risks. However, the study emphasised the need to rectify deficiencies in supplier management practices for firms by demanding ‘the right service, at the right price for the right risk’ from their suppliers.
