Vendors under risk management microscope in downturn

Peter Dinham
Sunday, 02 August 2009 14:25

Business IT - Technology

According to Araneta vendors have become more mindful of fee structures and engagement margins, and, he maintains, “banks justifiably have to be on their guard for vendors drastically cutting staff levels as well as those showing declines in service-level agreement (SLA) compliance and performance.

“Furthermore, as the IT department is pressed to justify technology spending, the vendor management office is compelled to spend more effort on vendor due diligence, monitoring, and scrutiny of SLAs.”

Araneta says he applauds moves by several vendors to significantly improve corporate governance and transparency, and concludes that “disclosures made by vendors to current and potential clients have become more detailed to include other client references, new wins, and other metrics for performance and delivery.

“Overall, the practice and standards of corporate governance have improved,” Arenta says, but adds that it remains to be seen, however, “whether changes are for the long-term or just coterminous with the weak economic climate."