Building Resiliency in Your Supplier Ecosystem in the Time of Coronavirus


The public health crisis presented by the coronavirus is an unfortunate and very real test of governments and community organizations around the world. Global enterprises with complex provider ecosystems also are being tested by the spread of the virus. Companies are urgently asking themselves how resilient their third-party suppliers are in a state of crisis.

The following steps will help you build resiliency in your supplier ecosystem.

  1. Know who your critical suppliers are. You may have thousands of suppliers, each with a different degree of potential impact to your business continuity. Your response in a time of uncertainty relies on knowing these degrees of impact to your business and tiering suppliers accordingly. You must quickly analyze delivery locations and be able to connect with the right supplier contacts. Look again at your tiered suppliers today and make sure the critical ones are noted as such. Suppliers that you once rated as less critical in the past may rise to the top of the list in light of the pandemic. Make these calculations so you can act in an informed way.
  2. Proactively monitor and be aware. Sign up for daily alerts about what is happening across your suppliers and any risks in locations where you or your suppliers execute delivery. Whether it is virus outbreaks in China, fires in California or political unrest in India, early warning enables you to proactively mitigate risks to delivery. Enterprises need to stay up to date on operational, compliance and legal events related to their suppliers and the macroeconomic, geo-political, infrastructure and people-related changes at their delivery locations.
  3. Assess supplier business continuity plans today. Business continuity is an organization’s ability to deliver products and services at acceptable predefined levels following a disruptive incident and is the essential plan for minimizing operational, financial and regulatory impacts. Safeguarding business continuity happens across the engagement lifecycle, from transition to steady state, at the onset of an event and post event. Business continuity plans should include sub clauses to ensure a robust contingency mechanism. Deliverables and obligations tracking provides easy access to supplier business continuity plans (BCP) plans for validation.
  4. Validate ongoing supplier compliance. Ask your suppliers to immediately provide evidence that they are adhering to their business continuity actions. It is imperative to trust your third parties, but with so many suppliers in your environment – and with potential business impact so high – verification is your fiduciary responsibility.
  5. Rapidly institute change based on your learnings. Get on your critical suppliers’ calendar immediately to identify with them any necessary policy or procedural changes. Policies and procedures often are instantiated in your contracts, so conduct a quick analysis of whether they are in writing, and formally update expectations to support the sustainability of these changes. 
  6. Monitor service delivery performance. Regardless of whether continuity plans have been invoked, service delivery performance should remain constant. There may be appropriate cause for exceptions to service level performance, but delivery continuity may be more imperative than ever. Consider review of the contract terms with your legal department and the provider to understand which terms may be applicable in the case of a global pandemic.
  7. Reflect and improve the resiliency of your third-party ecosystem. Working with a complex global supply chain can introduce significant risk to your business continuity. Evaluate challenges and incorporate changes to policies and procedures, update and harmonize your contracts as needed now, take steps to quickly modernize your technology, and improve your ability to work collaboratively with suppliers.

When it comes to your provider portfolio, time is of the essence. Managing the complexity can be overwhelming. The latest updates to the ISG GovernX third-party management platform can help you mitigate the immediate risk of the coronavirus pandemic and build resiliency in your third-party relationships for the long term.

About the author

Lois is a recognized expert in the field of Service Management and Governance. As Partner and President, ISG GovernX®, she drives innovation and industry leading practices in the area of service integration, operational effectiveness and operating model transformation. She brings more than 25 years of experience in IT operations transformation to her work with such ISG clients as Abbott, CNA, Exelon, Loblaw, Monsanto, Pitney Bowes and United Technologies.