Before diving into how to find the best vendor management software for credit unions, it’s important to have a firm grasp of just exactly what such software is. Of course, before getting into the software itself it’s important to understand a thing or two about credit unions. Although different from banks in a number of ways, the ways in which credit unions make their money is virtually identical. Credit unions take the money that people put into their accounts with them and invest that money into various companies and institutions. Then when those companies and institutions turn a profit, thanks in no small part to the investment from the credit union, they turn around and pay the credit union a dividend for their assistance. Credit unions make money when the companies and institutions they invest in make money. It’s really that simple.
The thing about investing in third parties and then waiting for a dividend, however, is that you’re inherently taking on a risky investment. Although the credit union feels confident that their investment is a good one, there’s always the outside chance that the company is going to lose money and thus the credit union will lose money as well. Credit unions are taking on the risk that their third-party vendors are taking on, but they’re not the ones actually running the vendor’s business. The vendor is doing that. Thus, there’s a degree of control missing from the ways in which credit unions make their money.
This is where vendor management software comes in. Credit unions buy vendor management software from firms like Ncontracts, and then the software collects and compiles all sorts of interesting data about the various third parties that the credit union is working with. This is how the credit union takes back some control in this relationship. Via the software they’re able to collect all sorts of interesting data about their various vendors, and then they can use that data to figure out where the vendor stands, how much money the vendor is going to make, and in turn how money they can expect to make. They can use the data to see if any of their vendors are having problems, and if they are the credit union can mitigate that risk by scaling back their investment or stepping in with even more assistance if that’s what they deem necessary.
As you can see, this enterprise risk management software is very valuable to the credit union, but it’s only as valuable as it is effective. In other words, credit unions have to do their best to find a software that’s effective. This means buying a software that’s been around for a while and has proven it’s efficacy, as well as buying it from a firm that’s going to help the credit union learn how to use it. They not only need a software that’s effective, but they need a software that’s going to be relatively easy for them to use. These are the things that credit unions should be thinking about when they’re looking for a vendor management software.