Procurement and internal audits stand out as two of the most critical aspects of the risk management process for businesses. Careful analysis of the emerging risk management trends and the resurfacing of old trends show multiple verticals of business being impacted directly. The partnership between the two in the setting up and execution of third-party risk management within the organization, specifically in regulated environments can have multiple rewards.
With associated stereotypes of being seen as impediments by clients and business owners, procedures and processes are often overlooked for faster business delivery, thereby exposing the organization to financial, operational, compliance and reputational risks.
The uphill task facing these two functions is to build trust and engagement, so the value positioning and benefits for business stakeholders are effectively communicated. With meaningful engagement right from the early stages, procurement and internal audit functions can make business unit processes easier.
Today’s business environment demands that a procurement professional be multi-faceted. To effectively assess risk exposure, the risk at the supplier level needs to be understood. This is further understood by looking at the specifics of the industry verticals and the types of products and services procured. Internal audits are responsible for ensuring that effective controls are in place, processes are followed diligently, and reporting is effective. The auditor needs to have a thorough understanding of all things procurement.
When procurement can provide a 360-degree view to the stakeholders on what affects them from a risk standpoint, it will help them to demonstrate their value position more effectively.