Every business that started small will agree that when the scale was small, buying in raw materials was manageable, although not as cheap unit-wise.
This makes sense, as certain costs, like shipping, reduce the overheads with bulk orders as they are spread over larger volumes. However, procurement dynamics change significantly as scale and growth are introduced.
As your operational needs expand, the simple, direct supplier relationships that once defined your input process quickly become insufficient. Instead of relying on a handful of known vendors, a multi-tiered global supply chain is often established.
This necessary move, while offering massive cost efficiencies and access to specialized materials, introduces significant complexity and risk. The simple handshake and spreadsheet approach that once sufficed was challenged by a new complexity.
Suddenly, your small team is not just tracking delivery dates; they are managing contracts across borders, navigating varying regulatory environments, and ensuring ethical sourcing standards are met.
Yes, that’s a lot. And here’s the acute pain point: too many third parties, not enough resources.
Procurement teams quickly find themselves buried under a backlog of unassessed vendors, creating unmanaged risk and delaying growth. This is where third-party due diligence becomes not just a compliance requirement, but a crisis to solve.
The Evolution of Due Diligence
Traditionally, the process for checking out new suppliers or partners was usually a manual job. Documents were sent back and forth, data was checked across tons of different systems, and approvals were looked for one after the other.
This old way took up a lot of time and was easily messed up by mistakes, which really slowed down how fast contracts could be finalized and kept growth from happening quickly. With all the new regulations and global supply chains, a much better and faster way was needed to deal with all the complexity—and to eliminate the third-party due diligence backlog that stalls procurement teams.
Automation as the Backlog Solution
The push toward automation in procurement is driven not just by efficiency, but by the urgent need to clear bottlenecks. By using tools like cloud platforms, AI, and ML, the whole process of checking out third parties can be made much smoother and faster, helping organizations reduce post-contract risk assessments and systematically eliminate backlogs.
- Initial Screening and Data Collection: Standardized digital forms and APIs can automatically gather necessary documents and data points from potential partners, cutting down manual effort.
- Automated Risk Scoring: AI programs quickly check data against global watchlists, sanctions lists, adverse media, and regulatory databases. This gives an immediate risk score, so teams can focus on the truly high-risk cases that need expert review.
- Workflow Management: Automated workflows ensure that as soon as a due diligence check is finished, the right people are notified immediately to approve it. This clears bottlenecks and keeps the backlog from growing. Regular check-ups on current vendors can also be scheduled automatically, ensuring compliance is maintained without adding to the pile.
The Benefits of Automation
By automating third-party checks, organizations can eliminate the due diligence backlog that slows down procurement. The time taken for cycles is cut down, often from weeks to just hours or a few days. Procurement teams are freed from repetitive paperwork, allowing them to focus on strategic sourcing and negotiation.
The result is not just efficiency—it’s the ability to onboard vendors faster, reduce risk exposure, and keep growth moving without delay. It’s peace of mind for business managers, knowing that vendor risk is under control and the backlog is no longer a barrier to progress.
