Issues in the Current System

  • Feeble man, not the firm: Task of reviewing vendor contracts often assigned to those who sound familiar with technicalities of the particular operation in the question, not to those who are concerned with contractual terms.
  • Focusing more on cost metrics:¬†Vendor contracts often executed by bank management with little or no consideration given to contractual terms.
  • Verbal Contracts: Vendors are often trusted implicitly, although the wording of contracts may vary significantly from provisions discussed orally (onward contracts contain terms which render previous oral discussions irrelevant).
  • Defining SLA: Improper due diligence i.e. acknowledging what your organization actually need. Directly endeavoring on how to address service or product failures.
  • High consultancy cost: Also SMEs lacking vendor governance are not willing to spend money on the third-party consultancy organizations, unable to perform efficiently.
  • Embedded trust on Third-Parties: The agency providing consultancy may get biased, which can damage the offering party terribly.

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