Leverage Vendors to Execute on Strategy in 2017

2017 text design on creative business success strategy
Laura Lynch Photo
Products & Services Manager

3 minutes

Strong credit union and supplier relationships is important for success and growth

The New Year is here, and your credit union’s strategic plan is in place. Now it’s time to execute in an environment that offers never-before-seen challenges. One element of that execution will include managing vendor relationships.

“Every year no matter how hard we work and how well we do, we always face an industry that’s going to force us to up our game and get better and get stronger,” said Steve Williams, principal at CUES Supplier member and strategic partner Cornerstone Advisors, Scottsdale, Ariz.

“Radical uncertainty” is what Williams saw coming for the financial industry when he spoke to CUES members in the webinar “Results-Based Strategic Planning.”

“We’re in a macro economic environment that’s never been navigated before,” Williams said. “In the history of central banking, the hundred years of the Federal Reserve, we’ve never had this type of economic environment. And we are approximately seven years and three months since our last recession ended; our next five-year planning cycle of planning probably includes a recession of some type.”

Add to that big banks are closing the gap on service. There are 55 million active mobile banking users between Bank of America, Chase and Wells Fargo. “When consumers get activated with mobile banking, more than any other self-service channel in the past, their satisfaction goes up. So ironically, while the big banks used to be horrible at scaling bureaucracy, they’re actually pretty darn good at scaling software,” Williams said.

Credit unions typically exceed banks in service, but Williams sees the theme remain: “As more consumers use digital banking, their distaste for large banks is reduced.”

So how do credit unions keep improving, keep winning on service and scale software? They make key vendors a part of their strategy.

Credit unions, in large part, do not develop their own technology. They rely on vendors. So to the extent that “every company is a technology company,” as Forbes magazine said, credit unions must rely on vendors to grow.

 Williams said, “We think one of the most strategic things going forward is the concept of vendor performance management.” He sees a credit union taking 10-15 key partners—those they utilize to deliver technology, member experience and services such as payments—and managing those relationships on a more strategic level.

Instead of viewing vendor management as a dictate from the National Credit Union Administration ( to remain compliant, strategic vendor performance management involves cost management, risk management and benefit management.

“Our opinion is for too long, this [vendor management] has been relegated too much from a risk side down in compliance and ERM; from a cost side, maybe too much in finance; from a benefits side, maybe too much in IT. This is an executive-level thing that we have to look at our partners as a key component of our strategic plan,” Williams said.

A good test to see where a credit union lands on the spectrum of vendor management: What is the partner health report that a credit union’s executives have on hand? Doing well on that test, says Williams, looks like a dashboard showing the vendor’s performance on cost, risk and benefits. The dashboard would easily show termination dates, as well as deadlines to submit notification if a contract is terminated.

Leveraging vendors at a strategic level will help elevate the credit union game in 2017 and beyond.

Laura Lynch is CUES' products & services manager.

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