As many of you have probably gathered from my posts, I'm a big fan of Spend Management innovation. And as I've explicitly called out in previous posts, I believe that innovation is a sign of a thriving market that is far from maturity.
This post will be the first of a series this fall that discusses Spend Management innovation for innovation's sake by examining vendors that are doing something different and pushing the market forward in new ways. From a full disclosure standpoint, you should be aware that some of the vendors that I will discuss in these posts will be clients of the advisory firm that I run. Others will not. Regardless, my aim is not to evaluate vendors -- I'll leave that to the analysts and the traditional media -- but to call attention to ideas that I think prove that Spend Management is a market and movement that is still in its early years (with breakthrough ideas and innovation happening everyday).
In this first post, I'll begin by discussing two vendors, Open Ratings and Austin Tetra. Both providers are pushing the Spend Management information envelope by enabling organizations to make better Spend Management decisions. Open Ratings focus is supply risk management, while Austin Tetra targets data enrichment for supplier -- and now customer -- information.
The power of both providers is their ability to help organizations make better decisions through third party information and intelligence. In the case of Open Ratings, organizations can better forecast and predict supplier performance and supply market disruptions due to both financial and operational causes. According to their marketing material, Open Ratings can also help companies to identify new sources of supply while also providing insight into actual supplier stability and performance before -- or after -- an organization makes a contract award decision. Given the rise of supply risk in recent years (as a side-note, I’m very much looking forward to Aberdeen Group’s new study on the subject which will be published this fall), Open Ratings would appear to be in the right place at the right time with a unique and differentiated offering (which no one, as far as I can tell, has even tried to copy).
Austin Tetra also brings significant innovation to the table as well. By providing data enrichment services, supplier information, and other information-driven capabilities, Austin Tetra enables organizations to better meet regulatory requirements and implement supplier diversity initiatives, while also helping organizations with traditional Spend Management programs including strategic sourcing and supplier rationalization. According to their website, Austin Tetra is also moving down the path of risk management.
Both Open Ratings and Austin Tetra are on the vanguard of the still nascent Spend Management information market. Others like D&B are trying to break into the game as well. The fact that both are succeeding in the market (along with the growth of D&B's supply management business) suggests that procurement and supply chain organizations are willing to embrace Spend Management information innovation, even in its early going. And it's a further sign that Spend Management innovation continues to increase everyday.