Change Management WalkMe TeamUpdated June 17, 2021

How to Create and Use a Vendor Offboarding Checklist

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How to Create and Use a Vendor Offboarding Checklist

Your vendor offboarding checklist should include all of the key action steps to take when ending a vendor contract.

In this post, we’ll look at what vendor offboarding is, why it is important, and what to include in your vendor offboarding checklist.

What Is Vendor Offboarding?

Vendor offboarding is the final stage in the vendor life cycle management process.

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During this stage, the relationship and all contractual obligations are finalized.

It is important to take a structured approach to this process, since residual risks, liabilities, or obligations can cause unwanted problems if left unchecked. 

While every vendor relationship is unique, each stage in the vendor life cycle can be boiled down to a few common activities, including offboarding procedures.

A vendor offboarding checklist can streamline workflows and ensure that no important action items are forgotten.

Every offboarding checklist should be customized to your own circumstances, but below we’ll cover a few of the  most important items to include.

A Vendor Offboarding Checklist

Here are a few items to add to your vendor offboarding checklist:

Understand and fulfill contractual obligations

Contractual obligations are the central axle of any vendor relationship, so it is critical to ensure that those obligations have been completely fulfilled. 

These can include, but are not limited to:

  • Payment
  • Warranties
  • Support procedures
  • Liability
  • Deliverables

In certain other types of offboarding, such as employee offboarding, certain steps can be skipped without incurring much risk. 

Vendor relationships, on the other hand, are more complicated and generally carry a great deal more risk, including compliance, legal, and financial risks. Therefore, it is of critical importance to ensure that all checklist items are fulfilled.

Close security loops

Security loops should also be closed, if only as a matter of procedure. While intentional security breaches are unlikely, the need for trust should be eliminated from security procedures. 

Following a zero-trust model – one that puts security first in every interaction – should be followed throughout the vendor management life cycle.

This means removing access to, for instance:

  • Physical buildings
  • Property
  • Equipment
  • IT accounts

Any equipment in the vendor’s possession should also be returned, since it too can represent a potential security threat down the line.

Update internal systems

Relevant data should be updated, including:

  • Contact information
  • Procurement software system data
  • Vendor profiles in software systems
  • Vendor evaluations

Following these steps can be useful for accurately inventorying your vendor relationships. At the same time, it can help to minimize the risks that might occur as a result of incorrectly maintained information.

Notify relevant stakeholders

All relevant parties within the organization should be notified of changes to the vendor relationship. 

Effectively communicating those changes can, like the other steps listed here, reduce inefficiencies, errors, and risks that could result from the use of obsolete information.

How to Create and Use a Vendor Offboarding Checklist

Here is a step-by-step process to follow when designing an offboarding checklist to include in your vendor management life cycle:

1. Outline the must-have action items for your offboarding process

Every offboarding process will be slightly different and differences will depend on several things, such as the type of vendor, the type of goods or services, and the contract itself.

A small vendor, for instance, will be far simpler to offboard than a vendor with a long-term, complex contract.

Creating master checklists, then customizing those for each specific vendor or category of vendor, can simplify checklist creation.

2. Add this checklist to your complete vendor life cycle checklist

Vendor life cycle management begins with onboarding, continues through relationship management, and ends with offboarding.

As we have seen, having a checklist for the offboarding process can greatly simplify offboarding, reduce risk, and so forth. 

The same holds true, however, for the entire life cycle. Having a master checklist for the entire process can assist with business process standardization and risk management.

Offboarding checklists, therefore, should be included in the vendor management checklist – and if you don’t have one, you may want to think about creating one.

3. Include the checklist in the proper apps

Procurement software and vendor management software are often used within the field of supply chain management

While each of these software apps is different, they often contain all the features needed to manage procurement, vendor relationships, inventory, payments, and more.

Yet not all of them contain the best features for creating and using checklists.

Project management apps, for instance, often include to-do lists and templates that can be followed by teams.

Digital adoption platforms (DAPs) offer another way to streamline the offboarding process – they make it easy to create and even automate workflows associated with any business process, including vendor offboarding.

4. Review the process and adjust over time

The vendor offboarding process will likely not change too frequently over time. However, it is important to update it if the checklist turns out to be missing something. When that is the case, the master checklist, its instances, walkthroughs, and other relevant material should all be updated as needed.

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