Vendor relationships can be an amazing benefit for your credit union; they can help improve member experience, be a pillar of your internal infrastructure or aid in the development of new offerings or solutions. In the absence of a crystal ball, vendors also pile up as you cobble together a set of solutions that you hope will be the right fit for your institution for an extended period. Over time, your credit may find itself with more vendors than needed.
As contracts come up for renewal, take a moment to consider each vendor and determine if they’re still providing a needed service to your credit union.
Conducting a Vendor Audit
Conducting a regular audit on your credit union’s vendors to ensure each is being used to its full potential and that each is still worth the cost can help your credit union save money and reduce redundancies.
When reviewing your credit union’s vendors, ask yourself the following:
- Is this product or service still needed?
- Could we perform this service in-house? Should we? Does my team have excess capacity to take this on? Should we hire?
- Does one of our other vendors offer this same service? At a better cost? Do I have a good relationship with the other vendor?
- What is my ROI? Is the cost we incur equal to the value of the service we receive?
- Is the service this vendor provides still relevant, or was it something we needed five years ago?
Not every vendor will need to be cut or replaced, of course, but it is always a good idea to review your existing vendor list. Especially as budgets start to tighten, reviewing and reducing vendors may provide your credit union with some additional financial breathing room.
What Vendors Should Your Credit Union Cut?
Technology has greatly evolved in the last five years; a more advanced option may now be available to replace a service that was once mission critical for your credit union. Consider your vendors and the services they provide. Are there new technologically advanced options to solve those issues? Are they cheaper or more efficient?
In some cases, the issue the service was originally meant to address may no longer be present. If it was purchased for a department that no longer exists or at the behest of an employee who has since moved on to a new position or company, that service may no longer be relevant.
Conduct a review of existing vendors and ensure they are being utilized to their fullest. If the service is still necessary, talk to employees about finding new and innovative ways to use the service to ensure that your credit union is receiving maximum return. Be honest with yourself…maybe the credit union needs to LEAN IN and commit to the partnerships you value the most. You can do that by asking the vendor to show you areas where they could add value to your organization.
Between inflation and reordered budgets, your credit union may find that certain vendors cause more financial strain than they did when first acquired. Carefully review your credit union’s budget and the costs associated with various vendors to determine where some can be cut. Speak with your vendor before terminating the contract. Ask for a less expensive option or a cost break. The cost of early termination should also be considered – compare the cost of terminating the contract early against riding it out to the end of the term. If your credit union is considering replacing the vendor altogether, ask the potential new vendor if they buy out existing contracts.
Check to see if your current vendors can work with your credit union to develop budget-friendly solutions. Many vendors offer only out-of-the-box solutions, but some may be able to work with your credit union to create custom solutions that are tailored to your credit union’s needs and budgets.
Your credit union may be utilizing multiple vendors that provide the same services. Review what services your vendors provide and see if there are areas for consolidation. See which ones offer the most cost savings and the most robust services. Ask yourself which vendor partner is going to GROW with you. Innovation with consistently high service is KEY. Trellance, for example, now offers Analytics, Cloud and Talent services. If your credit union is already using Trellance’s Data Warehouse, you could also utilize their Talent team to build custom dashboards or the Cloud team can help prepare your credit union for continuity events. If your credit union needs more robust data analysis capabilities, you could add Trellance’s Data Lake to your existing Data Warehouse, allowing your credit union to incorporate data beyond internal source systems. Because Trellance’s offerings are robust and diverse, there is no limit to what they can help your credit union accomplish.
Vendors help credit unions create a better member experience, create operational efficiencies and compete with the ever-changing field of opponents. They are a vital part of the credit union industry, but they can also be a drain on credit unions when too many are employed, there is a lack of vendor management controls in place or when a credit union renews a contract with a vendor that is no longer necessary. Make sure your credit union is actively reviewing each vendor as their contract comes up for renewal.
Shanna James is a Senior National Sales Executive at Trellance.