When it comes to better managing internal and external supplier information, most companies would admit that they've underinvested in the insight and tools necessary to achieve the results that are possible. Whether it's peering into supplier financial and operational performance or drilling down into supplier performance and quality by plant or retail location, few organizations have true insight into what's going on in their supply base. Quite often, I get asked about what types of providers can help solve this challenge. Recently, as I gave the answer some more thought than I usually do -- rather than just rattling off a shortlist of vendors and content providers -- I thought about how it might be useful to create a logical segmentation of the types of providers that can help. So in this post -- and a number of follow-up posts in the coming weeks -- I thought I'd offer up this segmentation and provide a bit more detail on where individual vendors can fit into the supplier content picture.
Let's first start by tackling a logical segmentation of the supplier content and information market. Even though this is probably not a MECE (mutually exclusive, clearly exhaustive) structure, I'd argue that there are probably three logical buckets of providers that we can create -- obviously with some overlap tossed into the mix. These are: core supplier content providers, supplier content/information management platforms, and analytical solutions to make sense of all of the information. In many cases, while a single provider might claim to have offerings in all three areas, they often excel in only or two. Hence, I believe that most companies would be well served to consider a roll-your-own approach when it comes to building a higher level supplier content and information management architecture.
Core supplier content providers focus on delivering third-party information for use in a variety of areas. This type of content might include basic data enrichment, diversity information, supplier credential tracking (e.g., certifications, insurance, and so on). It might also include more specific information verified either by onsite audits or online tools designed to certify whether or not suppliers meet a certain standard (e.g., what sigma level they are operating at or how lean they actually are). While there are numerous vendors to consider in this bucket, many that I've come to know on the pure content side include D&B, Austin Tetra (Equifax), CVM Solutions, Vendormate and numerous others (many of which I'll be profiling and introducing in a subsequent post). On the audit and tool side of supplier content, Emptoris leaps out as one provider with a specific set of tools designed to qualify and assess supplier capabilities based on highly detailed surveys and expert, pre-defined processes (they gained this through acquiring Valuedge a couple of years back).
Supplier content/information management platforms are separate from content sources, although they certainly rely on them to provide and feed information. They offer a central repository for managing internal and external supplier information, processes and workflows associated with qualifying suppliers, conducting, making sourcing decisions, conducting transactions and managing contracts. This is perhaps the most undeveloped and immature market at this point, although a few vendors are emerging that aim to tackle this area head on. These include Aravo and Ketera, not to mention others with strengths in adjacent Spend Management areas including CVM. I would also expect Ariba, SAP, Oracle and other broad platform providers to begin to create logical extensions to their offerings to tackle this opportunity as well.
The last bucket of supplier content and information management providers comprise analytical solutions to help companies prioritize and make sense of all of the information which is becoming available. Here, there are no clear leaders yet, even though there are certainly a number of spend analysis players who would like to think of their offerings as extensions into this sector (not to mention the supplier information platform providers who layer on an analytics layer). Still, at this point, I would suggest that companies are better off evaluating analytical tools based on the specific processes and areas they want to examine (e.g., supply risk, invoice compliance, etc.) A few to consider include SAS, BIQ, Oracle, and D&B, specifically in the area of supply risk.
Stay tuned as I dig into each of these three areas in more detail in the coming weeks, offering additional information and vendors to look at and consider. Also, if you are a provider and you think your offering falls into one of these buckets and we're not already talking, please let me know so I can be sure to include you.
- Jason Busch