Question

Assignment: Recovery Vendor (RV) is a leader in their field for recovering outstanding assets for their clients. RV is new to recovering assets for your organization, and you have been tasked to monitor their performance, and report your findings to the Vendor Management leadership team. You are new to the role with limited background regarding RV, or trends with asset recovery. You decide to provide a high-level performance analysis based on what you know regarding the company and make recommendations to the Vendor Management leadership team regarding whether the program is successful and/or whether strategy changes should be implemented and what those strategies could be. You know that RV was hired in Jan 2017 to compete against another, "legacy" agency. Additionally, RV was hired because the legacy vendor's performance had decreased in the past several years, and in the past year the agency has not met the minimum recovery rate that your company expected. Each week, both agencies receive a list of recoverable assets from your organization, and the organization reviews the return rate of these assets as a measure of performance. Using your analytical skills and creativity, developa high-level performance analysis that can be presented to your Vendor Management leadership team regarding CAR. Additionally, share any recommendations or strategy changes you would make based on your analysis. Assigned Assets Recovered Recovery Client Asset Rate Recovery (CAR) Assets Legacy Vendor Assigned Recovered Recovery Rate Assets Assets 4026 431 10.71% Jan-18 125 12.20% 4.89% Feb-18 1025 236 Jan-17 4823 3542 387 10.93% 145 3.50% Mar-18 Feb-17 4145 2018 Total 1053 9.72% 10834 205 6.32% Mar-17 3245 6.93% 321 Apr-17 4632 5.13% 212 May-17 4130 4.04% 95 2354 Jun-17 86 5.47% 1573 Jul-17 Legacy Vendor Assigned Recovered Recovery 4.70% 67 1425 Aug-17 Assets Assets Rate 3.35% 45 1342 Sep-17 4213 245 5.82% Jan-18 98 3.25% Oct-17 3014 3042 257 8.45% Feb-18 205 4.21% 4870 Nov-17 3987 240 6.02% Mar-18 5.37% 245 4560 Dec-17 2017 2018 Total 13869 872 6.29% 548 4.40% Total 12444

Answer 1

Based on the information given in the question, we need to carry out performance analysis of both "Recovery Vendor" (proposed/ new vendor) and "Legacy Vendor" (existing vendor) and justify the grounds for selection of new vendor.

As per the data given, the existing vendor is contributing very marginally for recovery of outstanding assets/ dues for the company. The vendor is able to recover only up to 4.40% of total assets assigned to it on average during the year 2017. Also for the first quarter (Jan-Mar) of 2018, the vendor's average performance is far below than the recovery rate of new vendor i.e. Recovery Vendor which has recovery rate of 9.72% for the first quarter, including the peaking recovery of 12.20% for Feb-2018.

Based on the above facts and data presented, it can be justified that "Recovery Vendor" should be suggested for asset recovery to Vendor Management leadership team based on following points and assumptions:

• Since the difference between recovery rates of existing vendor and new vendor is very significant, it would lead to more inflow of cash flows due to higher recovery and that additional amount of amount can be put to meet to the benefits of the organization.
• However, suggestion to select "Recovery Vendor" as new vendor should also be backed by analyzing the cost (commision/ fees etc.) to be borne by company for new vendor. If the cost of new vendor is more than the difference in recovery rate with existing vendor, then, one should not suggest for selection of new vendor.

Final conclusion: Based on the information given above in the question and explainations above, we can conclude that new vendor "Recovery Vendor" should be suggested to Vendor Management leadership team for consideration and selection.