The choice of vendor is a strategic decision, in many cases designed to cater for long-term supply of products and services. There are numerous risks that flow from poor decision making at the selection stage of the procurement cycle.
This data set of Procurisk probes the risks that may exist in your choice and use of vendors. The alignment of business interests with choice of vendor requires the exercise of 'due diligence' across technical, commercial and financial considerations. Superficiality of decision making will present high risk in that no foundation of informed knowledge will exist. A scrutiny of the due diligence that is undertaken is highly relevant in todays economic situation.
There are many examples of poor choices being made, including selection of strategic suppliers who lack the resources and skills to make the deliverables. It is not unknown for some vendors, following contract award, to be advertising for staff and making hasty sub-contracting decisions.
The failure to manage vendor risks can, ultimately, impact on the reputation of an organisation, adversely impact on the bottom line and incur excessive expenditure managing non-performing vendors.